Borrowing gets tougher

The residential finance landscape is now more complicated then ever. 2015 saw APRA enforce higher capital requirements on banks aimed at curbing investor lending.

Banks now offer different interest rates, depending on whether loans are interest only and / or investment loans. In addition, banks have,

• brought in lending caps on high risk postcodes,
• reduced loan to value ratios and
• brought in restrictions on lending to foreign buyers.

The ability to service a loan, should interest rates rise, is a major concern for regulators. As a result, there is now greater scrutiny over living expenses from lenders and brokers. This also comes off the back of recent reports of liar loans having surfaced in the media. Borrowers must take the time to create a reliable personal budget, which details their living expenses.

Luckily, not all banks are the same, meaning what does not work for one lender, might work for another. Further, banks policies and interest rates are being reviewed constantly, meaning what worked with a lender last week, may not work with them this week, and vice-versa.

This is where we come in because we,

• have access to a broad range of lenders,
• remain up to date with lenders differing policies and
• monitor changes in interest rates across these lenders.

Quick tip

Refinancing an existing mortgage can be a real pain. To alleviate this, why not try negotiating a better rate with your current lender. Scott Pape in “The Barefoot Investor” details his strategy which he recommends to assist with negotiating a better rate from your bank.

If you haven’t heard of the Barefoot Investor already, check out, barefootinvestor.com. If you’d like a free copy of this book, you are in luck! We are giving away a free copy for the first 10 people who contact us and request it! What are you waiting for… request your free copy now.

Refinance and save big $$$

A client recently came to us who was paying in excess of a 4.5% interest rate on his home loan. Historically, that’s quite low, but based on the current market, it was way too high…

They agreed to refinance their home loan and convert to principal and interest repayments. They will save almost $4,000 in their first year and payout their mortgage almost 5 years earlier, saving them over $100,000 interest over the life of the loan.

Check out our Mortgage Switching Calculator, on our Mortgage Calculators page to see how much you could save by switching to a better rate.

If you think its time we reviewed your loan, feel free to contact us now.