According to the Australian Bureau of Statistics the dollar value of refinances of Australian home loans exceeded 15 Billion in May 2020. That’s up 26% on the April position. It does of course include both investment and owner occupied home lending . There are some interesting points to note as to why this increased refinance activity is occurring:-
Economic conditions both domestically & internationally are set for low growth in the future reflected in low lending interest rates.
Banks are offering some very competitive fixed rates between say 2.20% and 2.60% (1-5 years terms)
Household budgets have been squeezed due to uncertainty around jobs and the economy brought about by Covid. On a 350k loan, a drop in interest rate from 3.50% to 2.80% over 20 years equates to a saving of $25 per week.
Theprobability that existing home values will fall over the next 6 to 12 months meaning householders are thinking before that occurs, it might be better to look at the refinance now.
Investment home lending has a large component of expiring interest only and fixed interest only loans which are maturing and require review.
In summary it’s never been a better time to review your home lending , whether that’s investment or owner occupied .
Contact Michael by email michael@compassadvice.com.au or phone 02 6583 2211.