As a homeowner, have you taken advantage of the low RBA rate?
With the Reserve Bank of Australia (RBA) keeping the official cash rate at a record low of two per cent, where it has been since May 2015, owner occupiers need to take advantage of these unprecedented low rates and refinance their home loan NOW!
According to Core Logic’s September Report, as of June 2015 $6 billion of lending has been refinanced, meaning there is quite a few people jumping at this opportunity to reduce their repayments. Have you?
There really has never been a better time to refinance. Since July 2014, lenders have written more investor loans ($13.5 billion) than owner occupier, but due to the recent regulatory changes enforced by APRA, this has to change, and for some lenders, fast!
Let us explain.
The banks have two types of mortgage debt – investor debt and owner occupier debt, of which they need to keep balanced at a certain ratio for two reasons. One is to assist in maintaining the integrity and safety of the Australian Finance Sector and the second, which has been brought in since the ARPA changes, is to cool the investment market down.
Therefore, in order to rebalance the ratios of debt, lenders are more eager than ever to get your owner occupier business through reduced interest rates and fees.
What’s the best way to refinance? Engage a mortgage broker. Because who has time to find the bank most hungry for your business?
Mortgage Brokers have access to top tier service arrangements with more than 35 lenders and are positioned to deliver the best possible lending solutions for each client. They have the software to compare the best interest rates, the relationships with the lenders to negotiate rates down further and arrange a quick settlement in addition to having intimate knowledge of the industry.
But not all mortgage brokers are the same, it’s important to ask the following before engaging a broker:
- What lenders do you have on your panel? If their panel is less than 20 lenders then they are only comparing half the market place
- Who are your top 10 lenders, some brokers get comfortable and stick to the banks which pay them the highest commission or the lenders they feel comfortable using… this behaviour isn’t in your favour!
- Do they provide multiple options for lending solutions? This ensures greater transparency
- Are they charging you a fee in addition to the payment the bank will pay the broker for introducing you to them?
- Are they wanting you to commit to a trail reimbursement or claw back agreement if they don’t receive full payment from the lender?
Check out this example:
If you have a mortgage of $400,000 that you are repaying at 4.5 per cent, over 30 years (principal & interest), you will approximately pay $2,026 per month.
If you refinance that $400,000 at 4.09%, you can reduce your repayments by $104 per month to $,1930 over 30 years, which will put more than $1,200 back in your pocket each year or more significantly potentially save you, $34,456 over the term of the loan.
This potential $1000+ saving per annum can all be achieved through a mortgage broker. In simple terms, there is no cost to you to use a mortgage broker’s services, you only stand to save.
Call us today, we’re happy to sit down and discuss your financial status and work out where we can help you save money.
(07) 3105 2060 or [email protected]
Please note, the example above is a generic statement which doesn’t take into account individual lenders additional fees and charges, we recommend having your personal circumstances reviewed by a broker to ensure a more specific solution/ review