The global pandemic coronavirus has caused a major disruption to the economy, bringing Australia to another recession after almost three decades. This has forced major home lenders to cut home loan rates to an all-time low of 0.25%, and even allow their clients to delay their mortgage payments for as far as six months under the new plans.
The latest data from the Reserve Bank of Australia showed that in January, 3.60% per annum was the average interest rate that was paid by Australians for outstanding loans. New loans, on the other hand, had an average payment of 3.21% per annum in the same month. For your loyalty, this shows almost half a percentage point penalty.
To aid stricken businesses to survive the economic crisis brought about by the pandemic, Australian Banking Association Treasurer Josh Frydenberg said that loan repayments will be deferred for up to six months. He added that Australian banks are now playing their part, and this move is a “game-changer” at that.
Now is the best time to find ways to minimize your mortgage. As the crisis hits the Australian company, existing borrowers are encouraged to take advantage of refinancing, while new home buyers may avail of now bigger discounts on mortgage interest rates. Here are some ways you can take advantage of a reduced mortgage rate if you are an existing home borrower, or find the best mortgage deal for new home lenders.
OUTSTANDING HOME BORROWERS
As the economy feels the pinch of the worldwide crisis, banks are freezing mortgage repayments. This “financial holiday” is the best time to look up ways on how to have your interest rates reduced.
Pick up the phone and give your lender a call. You’ll have an edge if you are a loyal customer, and you may have your request granted if you have a good repayment background. Refinancing your home loan is another option as it helps you save a lot of money, making you repay your loan much faster.
If you are experiencing serious financial difficulty, your lender may become lenient and offer hardship provisions to help you. Just make sure to call your bank or financial institution as soon as possible.
NEW HOME LENDERS
Comparing several listings from online comparison websites can help you find the best mortgage deal for you. Check out RateCity, Finder, or Compare the Market as going online can save you a ton of time.
You can also opt for on-bank lenders that offer lower interest rates. Succeeding the recent mortgage rate cut, it is very possible to find a deal with middle-to-low 2’s.