We’ve had many people asking us how they can take advantage of the CRAZILY LOW interest rates that are now being offered. We’d like to shed a bit of light on this. Yes, thanks to COVID-19, our economy is trending downward and the RBA has reduced the cash rate to an unprecedented 0.25%. Many lenders are now offering never-before-seen, rock-bottom interest rates for new loans. For example:
- CBA – from 30 March – 1,2 & 3 year fixed rate, owner occupier – 2.29% p.a.
- ANZ – 2 year fixed rate, owner occupier – 2.19% p.a.
- ING – 3 year fixed rate, owner occupier – 2.49%
So there are a few things you could do to access these interest rates, or at least bring your current home loan interest rate down a bit:
- Refinance your current home loan/s and/or
- Purchase a property and get a home loan and/or
- Negotiate with your current home loan lender to reduce your loan interest rate/s.
Refinance your current home loan
If you already have a home loan and you are on a variable interest rate, then you could look at refinancing with a lender offering a more competitive rate that you are currently on. If you are currently locked into a fixed rate home loan, then there will probably be an exit fee. We suggest asking your current lender what that exit fee would be first. The exit fee may mean it isn’t worth the money you would save on a lower interest rate. However, there are some large refinance rebates of up to $4,000 being paid to you by some lenders. This can cover all the costs even if you are charged a fixed rate exit fee.
Other things that may affect whether you can refinance including your current income and liabilities. If your situation has changed substantially since your current home loan approval, this may change the amounts that lenders may loan you. Sometimes this can be positive and enable you to get some cash out without even increasing your repayments.
Finding a lender with a low rate is easy. But finding a lender with a low rate that will approve the refinance of your loan can be a whole other ball game. That is where a broker comes in. We are across what each lender needs and wants and prefers. Once we find out about your current position, we can let you know which lender and interest rates you could successfully apply for. We only proceed with applications that have been carefully checked and we are confident will be successful.
Purchase a property and get a home loan
If you are looking at property to buy, well now is a great time to get a home loan and take advantage of the low interest rates. As we mentioned above, the key is finding a lender with a low rate that will actually approve your loan application. If you do this yourself, you will basically be pulling straws and HOPING you draw the long one. If you work with a broker, one that takes the time to ensure all the i’s are dotted and the t’s are crossed, you will have the best chance of successfully getting your home loan, at the best interest rate for your situation.
Negotiate with your current lender to reduce your loan interest rate/s
Now if you are not in a position to refinance or buy property, but you already have a home loan, then this is the option for you. Lenders are negotiating with current clients all the time. They have whole departments dedicated to this task. All you need to do is ring your lender and let them know you are thinking of refinancing with another lender who has lower interest rates than what you are currently on. Be forearmed with example rates of competitors that are similar kind of banks as your lender.
If you’ve had a good track record of repayments they will most likely offer you a rate reduction. If they don’t, or if you are not satisfied with the rate reduction you could go so far as to submit a ‘Discharge Form’. Talk to us if you need help finding one. Most lenders will be on the phone with you very quickly offering a lower interest rate once they receive a Discharge Request Form.
Being in the right position has a lot to do with getting the low interest rates
There are many factors that lenders look at and of course those who are the lowest risk are the ones offered the lowest interest rates. So what are the factors that they look at and how can you get yourself into the best position possible? You can plan ahead to improve your situation. You may actually be surprised about what you need to do.
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