After 12 months of seemingly unending rate rises by the RBA, interest rates finally appear to be reaching their peak and the market is stabilising. This period of turmoil and volatility in interest rates saw banks scrambling to retain existing customers and aggressively compete to bring in new business. However, the days of generous and lucrative cash back offers are over, as most cash back offers have been withdrawn. Any remaining offers are due to expire soon. Lenders have instead changed course and are now seeking to compete and attract new business through a new special refinance offer.
New Frontier – Special Refinance Offer
The special refinance offer sees lenders reduce their serviceability requirements, making it easier for borrowers to qualify for lending. Westpac were the first to introduce such an offer, taking the lead in this new space in the market, with many of the other biggest lenders following suit so as not to be outcompeted. The special refinance offers reduced the assessment rate from 3% to 1% for the refinance of existing lending. This presents opportunities to borrowers to qualify for a refinance where they may not have been eligible 6 months prior. This offer is suitable to borrowers stuck with uncompetitive rates from their current lenders, now providing them with an option to secure more competitive and affordable rates on their home loans. The refinance option can even allow borrowers to renew their interest-only period, significantly reducing their monthly repayments and easing the burden on cash flow. Achieving competitive pricing is more important than ever, with interest repayments having skyrocketed and rapid increases in the cost of living.
The special refinance options arrive at a favourable time for many borrowers as their ultra-low fixed-rate loans are due to expire, and they are facing the reality of rolling over onto a high variable rate with substantial jumps in their monthly repayments. Many borrowers in this position are likely to find themselves forced onto an uncompetitive variable rate and unable to refinance under a standard credit assessment. These special refinance offers are only expected to gain further traction, as they offer borrowers a way out of their current lending predicament.
To find out whether you qualify for this special refinance offer, or to have your current loans re-priced, contact your inSynergy Investment Finance Broker or Property Wealth Planner to arrange a chat.