Cabramatta - Canley Heights - Hoxton Park - Green Valley
R&H
You are viewing an article that is not currently active

Is it time to shop around for a better home loan interest rate?

June 9, 2022

With the Reserve Bank of Australia hiking the cash rate, there has never been a better time for homeowners to secure a competitive interest rate.

It is always advisable to shop around with the assistance of a finance specialists, and at the moment there are very low basic variable rates with cash rebates available worth considering.

The good news is that if you are on a variable interest rate you can probably still save up to 1% by changing lenders and receive a $3,000 rebate in the process. This is a handy boost for any mortgage holder and can really help your finances.

For all borrowers, and especially if you are on a low fixed rate, now is a time to reflect and do some work on your finances.

Pay close attention to your living costs and look for ways you can streamline your budget.

It is even worth increasing your monthly repayment to reflect a 3% interest rate. This way, if your fixed interest loan of 2% ends in the next year, you will be prepared for higher loan repayments.

If you are currently paying your mortgage on a monthly basis, now might be the time to consider changing to fortnightly or weekly payments to get ahead while interest rates are still very low.

Lenders offering carrots to attract your mortgage business

While it seems, most lenders will pass on the full 50 basis points, many banks’ variable funding costs remain low, so they are using their cheaper basic variable rates to attract new business when the fixed interest rates are uneconomical.

Moreover, mortgage holders who have an offset account linked to their home loan are paying higher interest rates.

While an offset is an automated way to make best use of any spare cash a basic variable with a redraw and no offset might help reduce your loan repayments because at the end of the day it’s all about the lowest rate in combination with a focus on your finances

The advantage for first homebuyers is that property experts are forecasting that the double-digit price growth that has taken place during the past 12 months will ease as the markets return to normal transmission, which means people looking to get their foot on the property ladder will potentially find better value.

If you would like help securing a better home loan rate or advice on your current loan, please call Craig Betalli, Our Broker Financial Services Senior Finance Specialist, on 0413 510 003 or 1300 796 793.