In a short span of two months, the Reserve Bank of Australia (RBA) has increased the cash rate from a record-low of 0.10% to 0.85%. Most lenders have quickly followed suit and passed on the rate increase to their customers.
The RBA has warned that more interest rate hikes are on the horizon, which might be leaving you feeling a little uneasy and anxious about your financial situation. However, there are steps you can take to make yourself feel more in control, including refinancing your mortgage or asking your current lender for a better rate.
Why review or refinance now?
Tens of thousands of mortgage holders around the country took these measures in May so you could find a better option by asking and checking the market. In fact, the latest refinancing insights from PEXA show that refinancing increased by more than 20% in May in each of Australia’s four most populous states. Here is a quick breakdown of what that looks like.
- NSW: 10,838 refinances. That’s up 20.8% in April and up 15.6% year on year.
- VIC: 11,500 refinances. May up 26.7% on April, and up 23.3% year on year.
- QLD: 6,699 refinances. May up 21.8% on April, and up 49.6% year on year
- WA: 3,244 refinances. May up 25% on April, and up 46.1% year on year
It’s proof that lenders need to attract and retain borrowers now more than ever and competition is fierce!
Even though mortgage rates are rising, it’s still possible to find a good deal. Especially if you have equity and a history of making your payments on time. If that sounds like you: you’re a good customer. And lenders want good customers.
How a mortgage broker can help you have more control
At its core, a mortgage broker’s loyalty lies with the borrower and not with any one particular lender. This means that if the mortgage broker believes the borrower can find a better deal elsewhere, they will advise and help them to refinance. There is always the option of asking the current lender to review the interest rate, even if the borrower is not looking to refinance with another lender. However, if the current lender is not willing to work with the borrower, then refinancing with another lender is always an option. Either way, your broker wants you to get the best possible deal.
If you would like to explore your options, please do not hesitate to contact us. We would be more than happy to assist you with information and mortgage loan options so you can take control of the uncontrollable interest rate rises.
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