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The mortgage marketplace has turned highly competitive in the past few years. As a result, most banks are offering deals and discounts to new customers to expand their customer base. However, the cheaper rates for new customers are fuelled by the pockets of existing home borrowers. Yes, lenders are increasing fees or raising rates for existing borrowers to fund cheaper rates for new borrowers!

 
Is your interest rate burning a hole in your wallet?
 

Are you losing your hard earned money to expand your lender’s coffers? You may never know unless you check your home loan regularly, at least every two years, according to experts!


Rod’s case study

Rod is saving $400 each month on his investment loan by switching to a new lender. He was previously paying a rate of 4.85 percent per annum, which was too much, he felt. Rod decided to save his hard-earned money by negotiating a better deal with his financial institution or switching to one that offered him a more competitive deal.

Assisted by Richard, a HashChing partner broker, Rod switched to a rate of 3.99 percent with another bank and his annual package fee also reduced to $120 from $375, saving him an additional $255 each year. [Learn more about Rod’s experience with HashChing here]

Like Rod, even you can take control of your finances by reviewing your home loan rate regularly to see how it stacks up against the ongoing rate in the market.

According to research, more than 40 percent of borrowers have been hit by unexpected rate hikes in the last couple of years. Yet, many borrowers remain hesitant about switching to cheaper alternatives, paying rates above 4 percent when the current benchmark rate is 3.70 percent per annum for principal and interest borrowers.


How much have your interest rates crept up?

Recently, ME Bank announced its decision to increase its standard variable rate for existing owner-occupiers with a principal and interest loan by 6 basis points. The bank also increased the rates for existing interest-only borrowers by 16 basis points. The bank claimed the increased rates to be a result of increased regulatory and compliance costs and mounting overseas funding costs.

The announcement by ME Bank follows in the footsteps of several interest rate hikes by major and non-major banks over the past two years, despite the cash rate being kept on hold by the RBA.

Would you be surprised if we tell you that the rates for interest-only property investors with the big four banks have increased by 54 basis points since the beginning of 2017?


A mortgage broker can help you save money on your home loan

As you are aware, banks are adopting stricter lending criteria, demanding more details about income and expenditure from borrowers, making the home loan application process a tad more tedious. For example, Westpac has increased the categories in its application form from six to 13 for prospective borrowers!

In addition, increased regulatory requirements and higher overseas funding costs are pushing several banks to announce out-of-cycle rate hikes.

However, the good news is that there are still lenders in the market offering competitive home loan deals if you only know where to look!

If you happen to be one of those savvy borrowers seeking a better rate on your home loan, a mortgage broker can introduce you to competitive home loan deals and guide you across your financial journey deftly.

A mortgage broker acts as a conduit between home buyers and various financial institutions, apprising the prospective buyers of the best rates and offers in the market. Mortgage brokers also take on an advisory role in assessing the financial condition of their customers and helping them ascertain the level of debt they can service comfortably. The best part is that mortgage brokers work closely with several banks, which means they are aware of the requirements of particular banks. Thus, a mortgage broker can fill your application correctly, ensuring all your documents are in order, increasing your chances of approval significantly.

At HashChing, we have created a network of Australia’s ace brokers online. To ensure transparency, each mortgage broker on HashChing must maintain a minimum user rating of 4/5 to continue receiving leads. HashChing broker partners are FREE and you can view their full profile on the platform, complete with a photograph and reviews from real users.

Through our website, you can not only view and compare competitive home loan deals but also find specialist mortgage brokers for your requirement. To get started, post your query online or fill up this contact form so that we can put a mortgage broker in touch with you.

 

By Vidhu Bajaj,
HashChing Content Writer

 

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HashChing is helping Australians by providing access to the pre-negotiated home loan deals. Obligation free consultation with one of our partner brokers might save you time, hassle and money.

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