This is becoming a frequent question we are getting asked and it does seem strange that lenders are increasing their home loan rates outside the Reserve Bank decision. “There are a couple of factors at play” explains Tracy Parish, owner of Mortgage Masters Australia – Local Mortgage Broker Newcastle and Maitland.
Bank funding costs are increasing, particularly wholesale funding. That’s the term funding that the banks get from international markets. “The cost of funding is increasing because there is a perception that there is greater risk in the world. Cost of funds, credit risk, price of risk are all related to perceptions of risk”, says Tracy.
The economy also has an impact on how the rest of the world sees us, so things like exports, imports, levels of unemployment, our dollar and many other factors all influence our economy.
The team at Mortgage Masters are encouraging ALL home loan customers to call their bank and demand a better deal on their home loan. We find that this sometimes works for clients, however, it is a much stronger message when delivered by an experienced Mortgage Broker. Tracy explains, “The banks really do need to sit up and listen to our request, they know we are in the driving seat when it comes to steering their clients to a better deal”.
Recently we challenged a client to call their bank regarding a new loan to buy an investment property and the loan amount was $600,000. The initial offer from their own bank was 4.70%p.a., however when Mortgage Masters contacted the same bank they were able to achieve a rate of 4.19%p.a. for the client. This represents a savings of $3,060p.a. for the customer, needless to say they were very happy!
We invite anyone with a mortgage to contact their lender for a better deal and if they still do not feel convinced that it is the best then call the team at Mortgage Masters on 0437 135 763 or visit our website to make an enquiry.
“Our service is at no cost – so what do you have to lose? Take the challenge!” Tracy said.