Australia’s largest banks have secretly been offering banks-beating mortgages to diminish a borrower exodus.
Australia’s record $18.2 billion in homeowner refinancing in June was up 6 per cent compared with the previous month.
More than $380 billion in mortgage money was shifted to much more affordable lenders as lending rates escalated from the pandemic and increased home-loan competition.
Banks have lately been offering behind-closed-door discounts of as much as 2.41 percentage points off their advertised interest rates to protect their home mortgage portfolios from the competition.
Our central bank has raised interest rates by 175 basis points. Money markets are predicting six more ahead.
Fixed rates, which have already skyrocketed, will soon see your loan repayments increase with variable rates that are likely to see the investment catch up. The only thing to remember is that money markets forecast that rates will drop in the middle of next year.
The lock-in ship has sailed, so lenders are choosing to compete like never before over variable rates.
How can you obtain an instant one percentage point discount?
Although you can get a discount on interest by switching to another financial institution, borrowers are reporting that simply by calling their lender, they’re saving interest rates of 100 basis points.
How to secure an up to 2.41% percent discount.
One way would be to threaten to leave. You can line up a new lender and make sure your existing lender knows about it. This requires calling your current lender’s mortgage discharge department or completing an online form.
Retention staff members are compelled to agree to your new loan terms due to the risk of revenue loss. View it as all the more reason to hold on.
And if the rates start to fall, keep your payments flexible, so they fall with them.
If you would like to learn more speak to one of our brokers today.
