There has been ‘very little change’ in mortgage rates over the last year despite widespread belief to the contrary, according to comparison website Canstar.
Canstar says the market can still offer good options to borrowers, and though many had anticipated rising home loan rates and higher repayments, the reality is that the market has remained largely stable.
But there still remain a number of factors to consider when searching for a residential home loan, and potential borrowers should property assess their finances and consider any possible developments that might arise further down the line.
‘Don’t tie yourself into a longer-term fixed rate deal that you then have to pay a termination fee to get out of,” says Canstar. ‘Likewise, the great rates that are around today may not be around forever. Always make sure you have some ‘wiggle room’ financially and will be able to accommodate an increase in your home loan interest rate, or even a one-off emergency expense.’
Canstar says borrowers should also not rule out the idea of switching to another provider offering better incentives, and shouldn’t be afraid of negotiating for a better rate.
“After the relatively stable home loan environment in 2017, there has been a flurry of activity in 2018 as institutions once again look to attract mortgage business,” comments general manager Jose George.
“And while we’ve seen rate tweaks rather than show-stopping cuts, consumers looking at shorter-term fixed rate options have had the chance to do well. Since the start of the year, we’ve seen 12 cuts in the 12 to 18 month fixed rate market, as opposed to no changes at all to floating rates.”
George also commented on the increasingly significant role of banks in the lending space, saying that they’re now considered “innovators, and an essential support to financial empowerment.”
“Banks have become enablers, helping customers to make far more informed decisions around their finances,” he says. “Coupled with the up-to-the-minute account information that is now also the norm, customers have access to a far more holistic approach to planning their finances and budgets.”