Take some control back, with the current mortgage interest rate war!
After what must feel like 'forever' for many people, there's finally some positive news within the lending space.
If you're looking to secure a mortgage or refix your current home loan, you now have choices. Banks are struggling to achieve their home loan targets, given the slowing economy and a lower number of houses for sale.
The knock-on effect of this is a mortgage interest rate war, which gives you the chance to be more in control!
The OCR’s recent jump to 4.75% clearly signals the Reserve Bank’s monetary policy and their desire for higher interest rates to help bring inflation under control. This is one reason why the ‘price wars’ and lower interest rates are not being widely publicised. Instead, these deals are taking place behind closed doors so to speak, and are often only shared with mortgage brokers.
Banks are being selective in who they tell. They don’t want to get into a situation where they are inundated with people applying for loans at the lower rate (which would see them writing off business at a loss and get them offside with the Reserve Bank!).
What are the deals?
Well, the deals can differ per bank and are often for very short timeframes, one recently was as short as two days. The interest rates that make up these deals can be significantly less than what the banks are advertising. Banks are basically experimenting with different deals to see what will work best. It may include lower rates (e.g. 4.99% for 1 year, 5.99% for 18 months or 24months), less deposit (e.g. 10%) or inclusion of a cash back offer.
How to take advantage of the deals
The first thing to do, if you haven’t already, is engage with a mortgage broker and establish a relationship with your broker. Here at Rapson Loans & Finance, we have a team of professional and approachable mortgage brokers, so you’ll be sure to find someone you gel with! Also, if you work alongside one of our mortgage brokers we’ll take the time to understand your personal circumstances and financial situation. And rather than take the first interest rate that’s offered, we’ll negotiate the best deal for you. Given our longevity in the industry (over 50 years) and our relationships with all the major banks, we’re in the best situation to get the optimal solution for you. In addition, if you’re an existing client of the bank, we can sometimes secure retention rates for you too.
Income is also important, it’s always important; but in the current price war, being able to show you have secure, regular, consistent income and can service your mortgage is key.
It’s difficult to know how long this price war will last. So, if you’re looking to make a move, now might be a good time to explore your options!