This week’s decision by the Reserve Bank to once again leave official interest rates on hold, as they have been since August 2016, will no doubt be viewed as good news by home owners, and those who want to become home owners.
What many people don’t realise, however, is that whilst official interest rates remain steady, there has still been quite a lot of movement in the home loan rates being offered by the lenders. Even more surprising for some people is the fact that, whilst increases in home loan rates often get quite a bit of publicity in the media, quite a few lenders have been moving their home loan rates downward without any media coverage at all.
Home loan rates have been falling
According to an analysis by one of the online mortgage comparison services, they have recorded reductions in the home loan rates being offered by as many as twenty-three different lenders since the start of July alone!
Why lenders are cutting home loan rates
One of the Directors of Mozo, an independent mortgage comparison site, was quoted last week as saying, “While Spring is traditionally peak season for buying and selling, there is an unusually high level of competition in the home loan market this year. The rate cutting frenzy is being fuelled by lender competition for ‘higher quality’ mortgage customers – particularly owner occupiers paying principal and interest repayments.”
All of these reductions in home loan rates can be seen as confirmation that lenders are positioning themselves for the busy spring season. Data has indicated that whilst the average reduction in interest rates is around 0.15 percent, some lenders have reduced their rates by more than double that, whilst Westpac recently cut some of their loans by as much as 0.85 percent, as well as waiving fees on some products.
Shopping around for your home loan
The most important tip for anyone who is planning on taking out a new home loan, whether for a new purchase or refinancing an existing loan, is to seek our experienced independent advice before committing to any home loan. In our experience, a good mortgage broker will not only know where to find you the best value in interest rates, (often at rates that are not publicly advertised), but they can also help you get a loan with the features that best meet your specific needs. It is important to find a loan that best fits your aims and priorities, including fee structures, flexibility on extra repayments, fixed terms and more.
Of course, finding the right home loan rate is just one of the issues you may need to consider when moving house. If you’d like one simple way to avoid many of the other potential issues that can cause set-backs when you sell, be sure to get your copy of our FREE booklet, Fatal Real Estate Traps Exposed, while you’re here.