With lending criteria tightened, leaving a smaller pool of property investors shopping for home loans, major lenders including the big 4 banks are now vying for investor market share.
As a result, some are now providing very attractive discounts to win the business of new investor customers with strong financial profiles.
‘Mortgage rates remain low and there is strong competition for borrowers of high credit quality,’ RBA Governor Philip Lowe said earlier this month.
Mortgage comparison website, RateCity, recently announced Australia’s largest lender, Commonwealth Bank, had been increasing the discount on some of its lowest home loan rates.
HSBC, and Westpac were all also lowering their rates in an effort to acquire new customers.
“Ask and you shall receive”
A recent mystery shopping exercise into home loans by mortgage comparison website, Mozo, revealed that getting a better mortgage deal ‘may be as simple as asking for it.’
When pressed, lenders such as CBA and ANZ offered a discount which would result in savings of up to 0.95% – a much higher discount compared to last year’s 0.13% offering by major lenders.
According to Mozo, investors who were able to negotiate discounts with the banks could save $9,500 every year on a $1,000,000 interest only loan.
First home buyers could save up to $2,001 per year on a $300,000 loan and refinancers could snag discounts equating to $3,145 in savings each year on a $500,000 loan.
In addition to discounted rates, banks were also willing to provide other incentives such as cash back and frequent flyer points.
“This is a great example of the unique opportunities available right now for investors who are in a position to buy and can secure finance. Lenders are competing for the business; it truly is a buyers’ market,” said Ironfish Head of Property, William Mitchell.
Ironfish property investment services
When was the last time you looked into refinancing your loans? With mortgage rates low and discounts on offer, now is the time to consider your financing options!
Make some time to chat with your mortgage broker. Or feel free to talk to one of our experienced investment strategists, who would be happy to recommend a broker to you.