The Banks Are Looking To Get Your Business.

It’s amazing what my lenders are offering in order to secure your business. There has never been more competition for the chance to write your home loan than there is now. At the same time, lenders are finding that who they can write loans for has been reduced because of the reduction in borrowing power caused by increased interest rates.

This means there is more competition for less customers.

When supply outstrips demand, prices fall. In 2023, we saw lenders offering larger discounts off the standard variable rate and then pile on the bonuses.

Banks were throwing everything but the kitchen sink at borrowers to get them to refinance their home loan to them. This is a copycat industry so what one bank does all the other ones follow. Once one lender came up with the idea to offer a rebate or cashback offer to anyone who refinanced with them, a whole lot of them created one.

I won’t print specifics here (because these offers are subject to change without notice) but looking through my panel of lenders, there were plenty of lenders offering rebates of either $2,000 or $3,000. If certain criteria are met, one lender was offering up to $6,000 cashback.

In 2024, quite a lot has changed. The discounts offered by the lenders have reduced and there are now only a couple of lenders offering a refinance cashback. If you managed to refinance your loan in 2023 you are now in a great position since your rate is probably lower than what new customers are getting. So, for the moment, you probably have a good deal compared to the current offerings.

If Your Mortgage Is Over 2 Years Old…

For anyone who has not reviewed their home loan for more than 2 years, then there is a good chance that there is a better home loan available on the market today compared to your current loan.

The reason is that because of the competition banks are continuously looking to make a better offer to the market – however they don’t go and update their existing customers and give them a better deal. They think it is better to leave them on the old loan for as long as possible.

I’d describe it as a ‘lazy tax.’ The banks are effectively saying ‘if you are too lazy to stay on top of the market you can pay more.’ This is why I review my clients’ loans every 6-12 months. The simple truth is switching home loans can save you hundreds if not thousands of dollars per year in the form of lower repayments.

When you stack this up with the few remaining cashback offers, then anyone who refinances right now is likely to win twice. Cashback and a lower repayment going forward – saving money every month.

If you haven’t looked at your home loan for more than 2 years it might be time to get in touch to see what your savings could be. Call 1300 661 211 or equire online at https://www.mortgageworldaustralia.com.au/contact-us/ and we’ll make your refinancing as easy and painless as possible.