This is a market of caution and uncertainty with a sprinkling of optimism – which is being reflected in our banks’ appetite to lend.
More than ever, now is a good time to ask for a better deal with your lender, as for most banks we are seeing support for providing better rates for existing clients.
Refinancing for better interest rates is harder, with extra tiers of credit requirements being assessed in the new-to-bank application process. As we have reported previously, further checks around employment hours and continued income remain a focus of the credit teams. Having said this, special own-home variable rates for low risk clients are now around 2.55% and 2-year fixed rates at 2.20%.
Another positive in the market is the release of an additional 10,000 places in the Federal Government’s First Home Loan Deposit Scheme. The first 10,000 places offered in January were all filled and interest in this second release is expected to be high. The First Home Loan Deposit Scheme provides the opportunity for first-time buyers to put down as little as a 5% deposit on a property through one of 25 approved lenders. The government then guarantees the difference between the deposit and 20% of the total value of the property, effectively enabling the buyer to avoid the Lender’s Mortgage Insurance premium. This scheme can be used in together with other state and federal first and new home buyer schemes.
If you would like to know more about the First Home Loan Deposit Scheme or discuss any aspect of your lending, please get in touch with the team at Infocus Lending Advisory.