How can I make the most of the low interest rates if I already have a home loan?

shutterstock_231839440Interest rates are a hot topic in the property home loan market at the moment with interest rates at an all-time low. In May 2015, the Reserve Bank announced that it would cut cash rates to a record-low of 2 per cent. Banks and other types of lenders naturally followed suit. Yes, this has happened in the past, but what is particularly different about this market is that there have been huge changes in the investor lending market and tough requirements were brought in late 2015 which have effected everyone with owner occupied home loans and investment home loans.

Now that things have settled down, there has never been a better time to review your home loan. Lenders are pricing home loans very differently at the moment and there are a few things they are assessing to determine a lower or higher interest rate.

  1. Equity position – technically the more equity you have, the lower your interest rate will be, however there are still a few options where this wouldn’t impact your interest rate.
  1. Repayment type – depending on whether you have decided to repay interest only or principal repayments, this will have an impact on the interest rate.
  1. Purpose of the loan – if you have an owner occupied home loan you will have access to a cheaper interest rate than if you have an investment loan.

These three factors are key contributors to accessing your potential for a lower interest rate and the lender will take all of these aspects into account. Do you understand where your home loan stands?

Where to from here?

If you haven’t reviewed your home loan in the past 2 years, then you must sit down with a broker and review your home loan. There are some great opportunities out there at the moment and unless you speak to a broker that deals with more than one lender, you will have a real issue finding the most suitable loan.

At Launch Finance we will be able to look at your current financial position and check your current home loan details to see what you could be eligible for. We look to your current lender to reduce your current rate and then compare to what you can get elsewhere. If the savings are beneficial to you, then you can look at applying for a new home loan to get your rate down. Give us a call today to book your appointment and look forward to lower interest rates ahead.