You may have seen on the news, and online, that it’s all about investors at the moment. In fact anybody with an interest-only loan has a bit of a target on their back because of regulatory changes in the market.
APRA (Australian Prudential Regulatory Authority), in it’s wisdom has encouraged all major lenders to keep a tight rein on investors and owner-occupiers who have interest-only as a component of the mortgages. This means that if you are in the group of people who have any sort of interest-only facility, then you may be being penalised on interest rate.
It is more important than ever to review your home and investment loans on a more regular basis to ensure that you are not getting caught up in the frenzy of activity surrounding the forced slowing down of investor loan applications and approvals. Seasoned investors and brand-new investors alike should be talking to a mortgage broker to ensure they are on the best possible deal that they could be. Similarly, (at the time of printing) you should be checking to see if your variable owner-occupied home loan is under 4%. If you aren’t paying rates from 3.8% to 4% for your home loan then you may be leaving money on the table. Particularly, those people with a fair bit of equity, like 20% or more.
Low rates at the moment means that if you haven’t looked at your home loan rate for a while then you might be starting off a higher base than everyone else and may be magnifying your losses.
For those of you who are thinking of buying your own home shortly then you should be placing more emphasis on searching for the ideal loan and tossing up between things like fixing your rate so as to be on top of future rate rises, or being in a more flexible position to take advantage of rapid market changes as they occur going forward. Which one is for you?
How do you find out what stable you should be in? If you can still get fixed rates under 5% and variable rates well under 5% then this is the point should be aiming for. A mortgage broker similar to us can help you locate and secure the best loan for the change in lending climate that could soon be upon us.
Interest rate isn’t everything! How are you are planning to run your lifestyle plays a big part in determining which lender, and which mortgage you ultimately end up choosing. Are you the type of person who likes to remain liquid, do renovations, move around a bit, buy and sell to make a little bit of cash? If so that may be fixing isn’t for you.
If you are the type of person who finds comfort in stability, knowing you are ahead of the market curve, want to use your money for other things apart from just paying down the mortgage, and are concerned with the economic environment might be going, then you may be a ‘fixer’. How do you know? A few simple questions answered honestly can allow you to choose the best path forward financially for your home loan future.
Before you buy, take the time to give us a call. If you have already bought, then take the time to give us a call to review what you currently have so that you can tweak it to allow for a better outcome.
Gone are the days of setting your home loan for 30 years, home loans, like everything else have a use by date. To check that your finances are still working for you properly call around this office on (07) 5474 4100, or email on [email protected].
Our no cost home loan service and advice is something we proudly offer to Laguna Real Estate clients.