With interest rates at record low levels, the number of homeowners refinancing skyrocketed to an all-time high in July. Today we’ll run you through why so many people are refinancing, and why you should consider doing so too.
We’re currently seeing more people refinance their home loans than ever before, and the latest ABS figures out this week prove we’re not imagining things.
Refinanced home loans reached an all-time high of $17.2 billion in July, which is a 6% increase on June.
It’s also more than double the value that was refinanced exactly two years prior in July 2019.
So why are homeowners refinancing in record numbers?
For starters, the RBA cash rate is at an all-time low of 0.1% following six rate cuts in three years.
As such, competition amongst lenders is fierce, with many offering record-low home loan rates in a bid to win over as many customers as possible.
In fact, RateCity reports the number of variable rates under 2% on its database has jumped from 28 to 46 in just two months.
Borrowers are also opting to lock in their interest rate too, says the ABS, following reports that lenders have started increasing the rates on 3-5 year fixed-rate loans.
“Borrowers are seeking out lower interest rates, particularly for fixed-rate loans, and cashback deals across a large number of major and non-major lenders,” says ABS head of Finance and Wealth, Katherine Keenan.
COVID-19 is likely increasing the number of homeowners refinancing, too.
With many households and businesses around the country doing it tough right now, one simple way to reduce your monthly mortgage repayments is by refinancing.
How we help you refinance the right way
Now, fixed-rate loans and cashback deals might look super appealing at first glance, but they might not always be the best fit for your situation.
And that’s why it helps to have someone like us in your corner.
We can help you go through the fine print, fees and limitations that might exist within these loan options.
We can also help you determine whether a fixed, variable or split loan is better suited to your needs.
The other thing we’re great at is negotiating with your lender.
Your current lender won’t automatically give you their lowest rate going. You’ve got to ask them for it.
And you’ve also got to make it clear that if they don’t reduce your interest rate, you’re willing to find another lender who will.
This can be both intimidating, not to mention time-consuming and frustrating if they don’t want to play ball.
But lucky for you, we can do the leg-work for you.
So if you haven’t refinanced in the past few years, get in touch with us today and we could help you save thousands of dollars in interest repayments on your mortgage.