February 10, 2017
The first few weeks of the year may be the best time for borrowers to take out a mortgage and to refinance. This is because, traditionally, after the holidays is when lending institutions tend to be on a sort of holiday’ of their own.
It’s not that the banks are actually taking a break. What happens is that staffing levels tend to be the lowest at the start of the year. For practical reasons, lenders wait to roll-out their rate changes.
Banks operate much like large bureaucracies. One individual or even one group does not make the decision to make a major change. If you are in the mortgage market, it pays to take this timing into consideration. You could save a lot of money by acting earlier in the year, rather than waiting for potential increases to come into play.
This also means that the lower rates you see right now could go up soon.
So far, the list of banks that have moved their rate deals is short. It includes major lenders like National Australia Bank, Virgin Money, and Suncorp. ANZ just recently announced an increase on their fixed-rate deals for both owner-occupied loans and for property investments for some loan products.
Dargan, says that right now is a great time to take advantage of the deals that are floating around and to beat the possible rises that may be just around the bend.
You should not necessarily expect lenders to hold off and wait until the next time the Reserve Bank of Australia meets, later in February, expert are suggesting more lenders will raise their rates out of cycle with the RBA.
Experts anticipate that the Reserve Bank of Australia will not change the cash rate anyway, keeping it at 1.5 percent. So, even without an increase in the cash rate, the home mortgage lender you are eyeing may raise its rates in the near future.
If you are in the market to refinance or to buy a home, it may be a great time to look around, compare rates, and see what kind of options you have available to you. However, do not expect the rates that you see today to be around in March.
In ANZ’s most recent rate hike, their biggest increase was 0.4 percent. This was for three-year fixed investment loans. More increases are expected from the big four banks in the coming weeks. While borrowers will still find a lot of competition in the Australian mortgage market, especially with non-bank lenders, this is slowly changing as tighter regulations are pushing banks to take steps to increase their own capital.
There is still time to catch the banks in their post-holiday slumber. Be sure to compare rates and deals and find out what rate you qualify for, knowing that whilst some banks have already started increasing their rates on home loans, many others have not.
Written by Refinancing.com.au
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