With heavy discounting now available in the mortgage world, long gone are the days where home owners would take out a loan and stick with that lender for life, a mortgage broker has highlighted.
Rebecca Jarrett-Dalton, the founder of Two Red Shoes, has predicted 2020 to be the year for refinancing.
Her reasoning? Customers as now expecting more from their lenders in return for their business.
“The lenders who can’t offer the most competitive rate will find themselves quickly broken up with as the act of refinancing becomes a more acceptable means to secure the best deal in town,” she said.
The mortgage broker noted there are a number of “savvy savers” now in the market who are seizing the opportunity they have opened up for themselves through securing a “new, shiny low rate” but making the same repayments as they were originally.
“This is getting these guys ahead by allowing them to build a buffer in an offset account or chipping directly away at the principal,” she flagged.
“It isn’t hard to see why” a number of mortgagors are looking at refinancing, according to the broker.
“The current discounts being offered, particularly on fixed loan rates, are massive!” she exclaimed, highlighting how there are five-year fixed loan rates on offer for as low as 2.7 per cent.
With customers “all over it and locking themselves in”, Ms Jarrett-Dalton said: “The major banks are definitely the ones who are feeling the brunt of customers taking the opportunity to jump ship and find themselves a better deal.
“Small lenders are capitalising on this by staying competitive and flexible.”
She also said these small players “are also quite happy to sit back and watch the big banks come under scrutiny from the media and watch consumers become more and more agitated with the majors”.
“These guys know that while their presence might be limited, they will fight for your business and try to stay relevant in today’s culture by adapting to models such as sustainable lending,” the broker concluded.
About the author
Join the nestegg community
We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians
Your email address will be shared with nestegg and subject to our Privacy Policy
About the author
Join The Nest Egg community
We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians
Your email address will be shared with nestegg and subject to our Privacy Policy
Where can you get a mortgage rate under 2 per cent?
How will lenders raising rates affect you?
Almost 1 million mortgage-holders don’t check their rate; Are you one of them?
Deferrals skyrocket as COVID-19 sets in
Take advantage of record-low interest rate, brokers advise
‘Lethargy’ leads to higher interest rates: Here’s how to avoid it
most viewed
Investment insights
15 financial habits of wealthy people
Economy
8 factors set to impact the economy into 2021
Tax refund
3m Aussies ‘now on notice’: ATO uses COVID-19 data
Superannuation
Flexing in the new financial year: Super system to see changes
Listen to
What the heck is with robots and tech - ETFs explained
More podcasts
Find super’s sweet spot
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.