Whether or not you should fix your loan’s interest rate or keep it variable is a decision you’ll need to make based on your current and predicted financial circumstances.
On the one hand, you may find a fixed-interest rate provides certainty in that you know what your repayments will be over a period. On the downside, you may not reap the benefits of interest rate cuts like you could with a variable-rate loan.
All in all, we’re in an ever-changing landscape. As such, you may like to compare interest rates, fees and features over on our comparison service, or chat to one of our brokers, so you’re confident you’re making a well-informed decision.
Last updated: 12/05/2020
If you talk to a broker, they can suggest how you could potentially reduce your monthly repayments, whether it’s by extending your loan term or moving to a lower interest rate, for example. Furthermore, your options will depend on your personal circumstances.
Times are tough, and our brokers are here to support you in reviewing your situation. To find out more about your options, request a call from one of our trusted brokers today.
Last updated: 12/05/2020
If you’re facing financial hardship and are struggling to repay your loan, contact your bank immediately and advise them of your circumstances. Banks have hardship programs in place to help assist you and offer different repayment options.
Otherwise, if you’re looking to reduce home loan costs, we can help. Simply request a call from one of our trusted brokers to discuss which options are available to you. Or, if you’d prefer to compare your loan against a number of others online, you can do so with our comparison service.
Last updated: 12/05/2020
Banks and financial institutions have financial hardship programs in place to help you if you’ve missed a repayment. These programs may look different between lenders, and may vary, depending on your circumstances. Your lender might defer your loan repayments, employ an interest-free period or waive fees and charges.
If you have missed a monthly repayment or suspect you will, contact your bank or financial institution immediately - don’t delay in getting help.
Please see How should I approach my bank when asking for help? It’s just below.
Last updated: 12/05/2020
Member banks of the Australian Banking Association (ABA) announced they would offer assistance to those suffering from COVID-19. The ABA has 22 members in Australia, including the big four.
This relief will vary, depending on your circumstances, but could include:
Depending on your bank, you may or may not be able to access a redraw facility during this time (i.e. access extra repayments you’ve made on your loan).
Your interest may also be capitalised, which means that all interest on your paused repayments will be added to your loan balance. For example, if you typically pay $1,000 in interest on your loan each month and pause your repayments for six months, $6,000 would be added to your loan.
Once your pause ends, you’ll also need to make up for these missed repayments over an agreed period. At this point, your lender will recalculate your loan balance and your loan term may be extended. Your repayment amount will either stay the same or be adjusted accordingly.
Keep in mind that due to this, you may pay more in interest over the life of your loan.
Finally, any Australian granted a six-month deferral on mortgage repayments will not have their credit rating affected – as long as they were up-to-date with repayments prior to COVID-19.
Last updated: 12/05/2020
For borrowers experiencing financial hardship, talk to your bank as soon as possible and be transparent about your circumstances.
Each bank has different mechanisms in place, which result in an application for a loan repayment freeze.
Last updated: 12/05/2020
The Reserve Bank of Australia (RBA) meets each month to (among other things) assess the cash rate for the country, to help control inflation and the cost of living. As the cash rate remains at a historic low, as of May 2020, it is unclear whether rates will be cut further.
Different measures have been put into motion, however, to mitigate further economic fallout of the pandemic.
For instance, the RBA announced a money-printing program for the first time to help prevent a COVID-19-driven recession.
On top of this, the RBA will buy Australian Government bonds as part of its first-ever quantitative easing program. It will also provide a three-year funding facility to provide cheap loans to Australian banks.
The Federal Government is working on new stimulus measures to try to prevent the COVID-19 outbreak shutting down large parts of the economy. More than half of the package, $11.5 billion, will hit Australia's economy in the next few months to prevent the economy falling into recession.
The package will include one-off cash payments of $750 to social security, veteran and other income support recipients and eligible concession cardholders; as well as billions of dollars to support the cash flow of businesses.
Last updated: 12/05/2020
You’re required to meet the conditions of your pre-approval for it to stand. So, if your approval was originally based on two incomes, you would need to go through the approval process again.
In these tough times, we’re here to help you understand your home loan options. You can request a call from one of our brokers to learn more about your next steps.
Last updated: 12/05/2020
When you apply for a loan, you’re still required to complete the usual application process. This means the lender will assess your financial capability to make your repayments.
With more and more Australians working from home, you may also find that any face-to-face application requirements could be delayed.
As such, it’s a good idea to talk through your options with a trusted broker to understand:
Our brokers take the legwork out of comparing your options and keeping you updated on the latest industry developments during this difficult time. To speak to one of our brokers, you can enquire on any of our home loans through our comparison service, or you can request a call.
Last updated: 12/05/2020
On 5 May 2020, the Reserve Bank of Australia (RBA) left the official cash rate at the historic low of 0.25%.
In a statement, Phillip Lowe, RBA Governor: Monetary Policy Decision, said, “The Board will not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2–3 per cent target band.”
Whether or not you should apply for a home loan now or later depends on your current and future financial situation. While the official cash rate set by the RBA does put downward pressure on home loan interest rates, making it an appealing time to consider such a move, lenders still need to approve you for the loan in the first place.
It’s essential that you remain as informed as possible about the current landscape and which options are available to you. Our partner brokers are ready to support and empower you to make a decision that’s right for you based on industry movements and your circumstances. Chat to one of our trusted brokers today.
Last updated: 12/05/2020
