What's happening with interest rates?

Today we are talking to Katrina Rowlands, a director of Mortgage Success, a highly successful local Illawarra mortgage broker.  

Katrina, the reserve bank has reduced interest rates a total 1.25% of the last 12 months. What has been the impact for borrowers?

The impact has been much it is easier to borrow. They have much larger choices with regard to package options now, so some of the banks have changed their product range quite considerably, including giving choices of basic products with less frills and benefits but possibly in some cases lower prices. They've also allowed to fix straight options to be very very competitive and staying sustainable and competitive at the moment and the package products have also had some reductions in fees, charges, as well as interest rate reductions have also grown on the package deals. So the impact has certainly been the way the banks assess the loan, allows a little bit more to be borrowed by the borrowers in the current market and it allows a much more competitive pricing with regard to choice of products which makes it a very  very good time to consider buying at the moment.

Katrina, do you think it's a good time to borrow to buy a property?

I think it's a great time in as much as it's not as harsh a cycle. So, the beauty of that is the borrowers have time to put a little bit more attention into their choice around and the loan they take. They're not as rushed into making faster decisions, so it means it can make better choices with better options and pursue a real competitive benefit with taken a little bit longer to make a decision. It's also a nicer time, in my view, in the market as they have the time to really pursue the property choices. Getting their reports, gaining any additional advice, having family take time to look at the property a second time and just really make it a nice process, which makes it a much nicer entire transaction.

And, for those people who already have a loan, what should they be doing?

I think it's definitely a time to consider what their bank is offering to them. Not just in the price of the product but also in the benefits, the package details, the options maybe that are available to them as additional benefits under new products. So, it maybe upgrading their current product with their existing bank so it may not mean a huge difference but just really understanding what their offerings are and if the current market is making a better offer. So that also does leads to a comparison to other lenders. Some of the lenders that are really coming to the market extremely strongly and returned to the market strongly are those that are not quite as well known as some of the major names. Definitely great players in the market, so it's a great time to consider those products that maybe weren't available a few years ago that now are. And to reconsider the competitiveness of the big majors in anticipation of what the other market is doing. So, a great time to consider prices, fee structures, package, benefits. A really good time to compete what was against what can now be in a product for you.

Thank you for watching this video. Another in a series to help you with your property decisions. My name is Perry Beebe and we'll talk again soon.

 

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