Interest rates are at an all-time low. Make the most of the market without even leaving your house.
1. Fixed rates from 2.19% – time to refinance
Save money while you try to save your sanity. Refinancing makes sense right now because it can be done via video with your broker and it’s one of those jobs people put off when they’re too busy with (normal) life. For example, a customer’s mortgage payments could be reduced by $2,532 per annum ($211 per month) where they have a $400,000 loan and a current rate of 3.19%.*
2. Pay off your mortgage faster
Tip: refinance to reduce your interest rate, but instead of repaying less, continue to repay the same amount, and do it on a weekly basis you’ll pay off your mortgage a lot faster.
For example: if you refinance to reduce your repayment amount by 1%, but continue to repay the same amount and on a weekly basis you’ll save $100,000 in interest and pay off your mortgage 5 years earlier.*
3. Investing: demand for rentals is high, supply is low, record low interest rates
Perth’s median rental is $360 per week. Vacancy rates are 2.2% – in 2017 they were 7.3%, which shows the number of rental properties on the market is relatively low. And Melbourne too has a low vacancy rate at 2.3% and a median rental amount for houses of $480 per week (REIWA, REIV March 20).
For example, with an interest rate of 2.88%, on a home loan of $350,000, your repayment would be $343 per week over 30 years^. Plus an investment property could create a positive income stream, potential tax benefits and potential capital growth.
How to stay in touch with a Resolve Mortgage Broker
Finance interviews can be conducted via video using Microsoft Teams, FaceTime and other video platforms. Our paperless application process means the finance application can be managed without the need for face-to-face meetings.
Contact us today.
All calculations are a hypothetical scenarios, and do not take your personal circumstances into account. All calculations by Resolve Financial Solutions Pty Ltd ACL 385487 using MoneySmart calculators; for calculator disclaimer and assumptions go to moneysmart.gov.au/home-loans/mortgage-calculator.
*Results compare 30 year terms, principal & interest, owner occupied facilities and assume the rates quoted remain unchanged for the term of your loan. If the interest rate changes over time, you need to be aware that the interest saved and period to pay of your home loan may change. Assumptions: $400,000 loan amount owing, initial interest rate of 3.19%, repayment frequency monthly. Zero fees. Repayment is $1,728/month and $225,565 interest payable. The reduced rate of 2.19% (available from our panel of lenders at 2/4/20, terms and conditions apply) is repaid monthly. Repayments of $1,517/month. If your home loan is refinanced to the lower rate, but you continue to make the higher repayment ($1,728/month) for 30 years, the overpayment of $211 per month will reduce your loan term to 25.2 years, and interest payable will be $120,263.
^ Assumptions: $350,000 investment loan, interest rate of 2.88%, repayment frequency weekly. Fees of $395/year. Loan terms: 30 years, principal & interest paid, owner occupier. Assumes the rates quoted remain unchanged for the term of your loan. If the interest rate changes over time, you need to be aware that the repayment amount will change.