With the RBA cash rate still at a record 0.25% as at 1st September 2020, lenders are now offering variable interest rates at very competitive levels. Some lenders are even offering generous “cash backs” for existing borrowers to get them to switch lenders.
In recent media publications, some variable interest rates are under 2% presently. Lenders are now tiering their interest rates according to the loan size and loan-to-security ratio (LVR) For example, if an applicant borrows up to 60% of the value of the property, the interest rate would be different to that of a borrower seeking a loan of 80% or higher.
Lenders will now also price competitively if the borrower makes principal-and-interest repayments as opposed to interest- only. Recently Fixed Interest Rates for a 4-year and 5-year term have increased as lenders are anticipating that official interest rates set by the Reserve Bank will be higher by this time frame. Whilst funds are now at low interest rates, the finance application is still subject to the lender’s stringent credit criteria.
If you are considering refinancing or purchasing a new property for investment or owner-occupied purposes, contact Paul today to discuss your options.