With a reduction in interest rates to an unprecedented low of 0.75 per cent, a new benchmark has emerged favouring homeowners.
Reviewing your existing mortgage could potentially save you thousands of dollars in interest repayments over the life of your loan, with some lenders offering competitive rates starting with a ‘2’. On top of this, banks have relaxed assessment rates making it easier to borrow money and subsequently increasing your borrowing power.
Consider this, if you are looking at buying a property or refinancing, based on a lowered
6 per cent serviceability rate (down from 7.52 per cent) could give a family of four with a household income of $109,688 a $77,000 potential increase in borrowing power on a $636,000 loan.
Likewise, single income borrowers on $83,455 could receive a $66,000 borrowing power increase on a $544,000 loan.
Of course, there are still lending protocols in place to ensure borrowers are still able to meet their repayment obligations.