As you would have seen in the news, the lending environments are evolving. This is mostly due to regulatory requirements to mitigate risk with the increasing property prices and over borrowing for home and investment property finance. There have been multiple changes over the last eighteen months and it’s more important than ever that lender selection is done in light with your mid to long term goals. In this blog post we go through the top 3 changes in lending and five reasons to refinance your property.
Top Three Changes in Lending Environments
1. High Assessment Rate: Most bank lenders are now assessing borrowers at 7.25% Principal & Interest (P&I) repayments. Whilst you may still be paying 3.xx% to 5.xx% interest rate, depending on the lender, the borrowings may will still be assessed at 7.25% P&I repayments for your existing and new borrowing
2. Owner Occupied vs. Investment Debt: Interest rates between owner occupied and investment debt are different. As logic says it, you pay a higher interest rate on investment borrowing. Only one bank lender on our panel is allowing owner occupied interest rates for equity extract for investment purposes (where borrowed against your home)
3. Interest Only versus Principal & Interest Repayments: Most banks now require you to borrow less than or equal to 80% Loan to Value Ratio (LVR) to allow Interest Only (IO) repayments on your loan. For borrowings over 80% LVR, you will be required to pay P&I
Five Reasons To Refinance Your Property
1. Re-finance to adjust current lending structures for future investment or to minimise risk
2. Re-finance to access more suitable loan features
3. Re-finance to access EQUITY for property investment or build / renovations
4. Re-finance to get a better deal
5. Re-finance for debt consolidation
What’s your reason? Read more to find out in detail the 5 reasons to refinance your property: http://bit.ly/2r00w6V
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