Blog

July 01, 2020

Search Mortgages - Finance Update

Buyers taking advantage of early super access

Some buyers are using the $10,000 that they can access (per financial year) as a part of the early release of superannuation funds to put towards their home deposits, enabling them to avoid LMI or just qualify for a loan. 

Despite possible penalties, researchers have found that around 40% of those who took advantage of the early scheme were not substantially financially impacted by the COVID-19 outbreak.

 

What will happen when banks’ mortgage freeze ends?

There is a huge unknown what will happen to borrowers who have frozen mortgage repayments that are due to finish in September. Analysts realise the decision by the banks will create loans that will last longer and be more profitable for the banks, but only if Australians regain their earnings and can continue to pay off their loans and not fall into default.

Mortgage stress is on the rise (37.5% of homeowners under pressure as opposed to 32% before the crisis). Many economists believe the banks and government will do whatever it takes to keep individuals and companies solvent to avoid the potential of homeowners being forced to sell.

 

Mortgage rate war

Since the start of May, more than 330 fixed home loan rates have been cut, while almost 160 variable rates for new customers have dropped.  Banks are tussling for position and anyone with an interest rate above 3% is probably paying too much.

Just for example the major lenders have incredible rates.

Major Lenders

Variable loan

Advertised Rate

BankSA

Basic Home Loan

2.64%

NAB

Base Variable Rate

2.69%

ANZ

Simplicity Plus

2.72%

CBA

Extra Home Loan

2.79%

Westpac

Flexi First Option

2.79%

To see all the lowest rates available to potential Search Mortgages clients please visit our web site.