Borrow
Take advantage of record-low interest rate, brokers advise
A mortgage is a household’s biggest expense, yet many households simply set and forget their interest rate, which is costing them thousands, two advisers have explained.
Take advantage of record-low interest rate, brokers advise
A mortgage is a household’s biggest expense, yet many households simply set and forget their interest rate, which is costing them thousands, two advisers have explained.
In conversation with nestegg, uno Home Loans CEO Anthony Justice discussed how consumers should be looking to strengthen their position during the COVID-19 pandemic by paying less on their mortgage.
“The first thing is work out whether you have a good loan or not. Work out whether you are on competitive rates for your circumstances,” Mr Justice said.
“Be aware, and the second thing, take action. If you don’t ask, you don’t get. If you can’t renegotiate with your lender and are able to refinance, now is a good time to do so.”
The broker highlighted anyone who is looking to improve their net position by reducing expenses should look at their mortgage.
“If you’re trying to shore yourself up for this crisis, however it unfolds, having your biggest expense as low as you can get is a very good thing to be focused on,” Mr Justice said.
Former mortgage broker Ross Le Quesne agreed with Mr Justice, explaining short-term changes can have a big impact on the long-term gains for property investors.
Five years ago, rates were around 7 per cent, with an average rate over time being around the same mark. Mr Le Quesne explained that today, however, a good mortgage broker can get owner-occupiers nearly 5 percentage points less.
Mr Le Quesne also highlighted the opportunity that record-low interest rates are creating for investors due to the expenses incurred on interest rates.
“The biggest expense in any investment portfolio is the interest by far. Many clients are sitting on interest rates with 4 in front of them,” he said.
“If you can get down onto the high 2s on an interest-only product, if you have 1 per cent on a million-dollar property portfolio, that is massive money.
“For clients with $3 [million] or $4 million portfolio, we’re talking a [$30,000] to $40,000 going back in your pocket.
“That’s why it is important to look into your rates, as it is your biggest expense,” Mr Le Quesne said.
Pay if you can
While it is estimated that up to one in 10 Australians are currently taking a mortgage holiday, Mr Justice also advised mortgage-holders to be wary of the longer-term implications.
“We’ve seen a very high number of people going on a repayment holiday. The big thing to watch out for as a consumer is, it might be a repayment holiday, but the interest is still accumulating and re-added to the capital along the way.”
“It is a good short-term fix, but ultimately over the life of the loan, it is actually increasing the cost,” Mr Justice concluded.
RELATED ARTICLES
About the author
About the author
Loans
Mortgage stress is easing — but the credit cycle’s next winners will be data‑led
New Roy Morgan data shows the share of borrowers at risk has fallen to the lowest point since early 2023. That’s a welcome inflection after two years of rate rises—but the absolute number of at‑risk ...Read more
Loans
Beyond the mortgage: SME lending is where growth, margin and loyalty are shifting
SME credit is moving from branch desks to APIs, from collateral to cashflow, and from monoline lenders to embedded platforms. For banks, fintechs and brokers, this is not a side-bet—it’s where ...Read more
Loans
Debunking credit myths leads to big wins with transparent hardship design
New research from Arca’s CreditSmart initiative surfaces a stubborn problem: Australians under financial strain are avoiding hardship support because they fear lasting damage to their creditRead more
Loans
No-deposit home loans in Australia: The growth gambit that tests risk discipline
A new no-deposit mortgage has landed in Australia, promising to crack the hardest nut in housing—fronting a deposit—while raising old questions about risk and capital. For lenders, the product doubles ...Read more
Loans
Rate relief ignites a mortgage scramble — and a technology arms race
Australia’s rate easing has flipped mortgage demand from ‘defend and retain’ to ‘originate and grow’. Refinance waves and a rekindled purchase market are colliding with digitisation, broker dominance ...Read more
Loans
Trust is the moat: How brokers can win in an AI-accelerated, commoditised mortgage market
In an evolving mortgage landscape where algorithms are levelling the playing field, Australian mortgage brokers are finding that trust, rather than price or speed, is becoming their most valuable ...Read more
Loans
CreditSmart revolutionises hardship support and lenders risk missing out
Australians under cost‑of‑living pressure are sidestepping hardship help because they fear a permanent stain on their credit file. Arca’s CreditSmart initiative has thrust this misconception into the ...Read more
Loans
Australia’s 40‑year mortgage moment: affordability optics, lifetime cost, and the new risk calculus
Forty‑year home loans are shifting from niche to feature in Australia, led by challenger banks and mutuals courting first‑home buyers. The headline promise—lower monthly repayments—masks a material ...Read more
Loans
Mortgage stress is easing — but the credit cycle’s next winners will be data‑led
New Roy Morgan data shows the share of borrowers at risk has fallen to the lowest point since early 2023. That’s a welcome inflection after two years of rate rises—but the absolute number of at‑risk ...Read more
Loans
Beyond the mortgage: SME lending is where growth, margin and loyalty are shifting
SME credit is moving from branch desks to APIs, from collateral to cashflow, and from monoline lenders to embedded platforms. For banks, fintechs and brokers, this is not a side-bet—it’s where ...Read more
Loans
Debunking credit myths leads to big wins with transparent hardship design
New research from Arca’s CreditSmart initiative surfaces a stubborn problem: Australians under financial strain are avoiding hardship support because they fear lasting damage to their creditRead more
Loans
No-deposit home loans in Australia: The growth gambit that tests risk discipline
A new no-deposit mortgage has landed in Australia, promising to crack the hardest nut in housing—fronting a deposit—while raising old questions about risk and capital. For lenders, the product doubles ...Read more
Loans
Rate relief ignites a mortgage scramble — and a technology arms race
Australia’s rate easing has flipped mortgage demand from ‘defend and retain’ to ‘originate and grow’. Refinance waves and a rekindled purchase market are colliding with digitisation, broker dominance ...Read more
Loans
Trust is the moat: How brokers can win in an AI-accelerated, commoditised mortgage market
In an evolving mortgage landscape where algorithms are levelling the playing field, Australian mortgage brokers are finding that trust, rather than price or speed, is becoming their most valuable ...Read more
Loans
CreditSmart revolutionises hardship support and lenders risk missing out
Australians under cost‑of‑living pressure are sidestepping hardship help because they fear a permanent stain on their credit file. Arca’s CreditSmart initiative has thrust this misconception into the ...Read more
Loans
Australia’s 40‑year mortgage moment: affordability optics, lifetime cost, and the new risk calculus
Forty‑year home loans are shifting from niche to feature in Australia, led by challenger banks and mutuals courting first‑home buyers. The headline promise—lower monthly repayments—masks a material ...Read more
