Interest rate announcement – July 2016

Today the Reserve Bank of Australia met to review the official cash rate. After cutting rates in May, the RBA has decided to leave rates on hold at 1.75% again this month. We expect that most lenders will leave their rates unchanged, in line with the Reserve Bank’s decision.

Over the past 5 years, home loan interest rates have become much more competitive. This is partly because there are now a greater number of lenders offering simpler products to prospective buyers. In addition, a more competitive market has caused the big banks to offer more attractively priced loans to borrowers.

Over the last 12 months, lenders have also started to differentiate loan rates based on a number of factors including:

  • Type of property (i.e. investment or home),
  • Repayment method (i.e. interest only or principal and interest),
  • Loan to Value Ratio (LVR)

These subtle differences can create more opportunity to find a better rate for each individual borrower. This is why it’s crucial to have someone who knows the loans market inside out on your side when arranging your loan. At Harvest, we have extensive experience helping our clients secure the best loan for them.

How often should I review my loan?

We recommend reviewing your property loan at least every 3 years to ensure that your rate remains competitive. We can provide you with a free property loan health check. Simply email a copy of your latest home loan statement to [email protected]

In the current market, we often find that it is possible to reduce a client’s home loan rate by between 0.5% and 1.0% p.a. by refinancing their existing loan. On a loan of $500,000, this translates to an interest saving of between $2,500 and $5,000 p.a. Alternatively, by maintaining your existing repayments, a similar interest rate reduction can shorten your loan term by between 3 and 6 years.

Are there any costs associated with moving lenders?

When switching lenders, there are usually some small one-off costs. This can include a discharge fee with your existing lender (usually around $300), an application fee (of up to $250) and some government mortgage registration charges. If part of your loan is fixed there may also be a fee to break the fixed rate – speak with your lender to confirm if any break costs or other fees apply, just to be sure.

Although there are some one-off fees that apply, they are likely to be far outweighed by the long term repayment saving achieved by lowering your interest rate through a loan refinance

To start saving today, contact us for a free property loan health check.

Our Current Best Interest Rates

The best home loan rates we currently have available:

  • Variable rate of 3.81% pa
  • 1 year fixed rate of 3.89% pa
  • 2 year fixed rate of 3.69% pa
  • 3 year fixed rate of 3.79% pa