As the cost of housing continues to rise, so too does the size of the average home loan.
As we creep into some seriously big borrowing dollars, for your next loan, it’s more important than ever to have the right loan for your unique situation. The right loan could mean huge savings in both money and time – think tens of thousands of dollars, and years off your payment period.
However, as the pressure to have the right loan is increasing with the cost of housing, it’s never been harder to compare the loans on offer.
Here’s why it’s so hard to compare and decipher home loans right now:
- The banks are not aligned with the RBA
- Loans are now fragmented
- There are big discounts, but no one is advertising them
- Wer're being thrown new offers all the time
The banks are not aligned with the RBA
It’s easier to compare apples with apples when, well, you’re comparing apples with apples. The banks used to adjust their rates in response to RBA changes and usually all at the same time. It was easy to compare rates when they were all changing at the same time and in response to the same thing. But recently the banks have decoupled their rate changes from the RBA and now each makes rate changes according to their own schedule, leaving rates difficult to compare.
Loans are now fragmented
Until recently, each bank typically had one standard rate for their variable loans. In 2016, concerned by runaway housing prices, the regulator intervened to dampen investor lending. The effect was to drive higher rates for investment and interest only loans. As a result, any individual lender today is likely to have at least four different reference rates: Owner occupied – Principle and Interest repayments or Interest Only; and Investment – Principle and Interest repayments or Interest Only. In other words, there’s quadruple the number of rates from each major lender, adding further to the confusion.
There are big discounts, but no one is advertising them
There are some good discounts on offer– but they’re usually not published. The only way the average home loan shopper would be able to compare them all is by speaking to every single bank.
Or they could just talk to their YBR Wealth Manager.
We’re being thrown new offers all the time
Add to this confusing situation a plethora of new offers each week, and it’s next to impossible for the every-day Australian to keep track.
Your broker plays a crucial role in getting it right in this complex home loan market.
When you’re ready for your next loan, give your Yellow Brick Road Wealth Manager a call. They will confidently steer you toward the best loan for your current situation.
It’s why they’re here.