Happy Monday!
Well that was a busy week in the world of money. The RBA’s rate cut didn’t really come as a surprise, the lenders not passing on the rate cut in full shouldn’t be surprise either. Only been a few passing on the full 25bps (basis points) with the majority going 13-15 bps.
What this means for borrowers is that if they haven’t given their home or business loans a health check then now is the time! The reality is that rates have not been this low since the 50’s BUT access to the credit is much more difficult than it was back then. Which is where I come in to help.
Only ING and few of the NEO (digital, online only banks) lenders have variable rates in the 2’s. Though given the NEO banks LVR (loan to value ratio) restrictions and PAYG (salaried employees) only options and ING’s servicing (ability to borrow) rate at 8% this amplifies the story around hard to access to credit.
Macquarie and Newcastle Permanent are the strongest and have reduced their rates to being very low 3’s at 3.09 and 3.19% respectively. I think as the market starts to correct itself after this cut, the fixed rate war will continue, with many of the lenders currently offering 2.99% 1,2 and 3yr fixed.
Outside of the rate war it certainly hasn’t improved lenders wait/assessment times. I am working with a couple of lenders that are operating much faster than the norm. Those being Heritage Bank and Citibank.
Heritage are a good boutique lender with some good policy, as well as consistently sharp rates. Citibank have always been very sharp in their higher borrowing band above $750k. Both have seen a file picked up with 48hrs and valuations completed, with a hopeful formal approval before a 10 business day period lapses.
As my real estate colleagues know this is key to getting an offer over the line.
I hope you all have a productive week out there. I am back on deck in Canberra from Wednesday flights permitting, let me know if you need me to assist those of you who need a home loan health check.
Justin
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