Before you decide on which lender will get your home loan business, compare what’s available out there.
Interest rate discounts, cash-back incentives and fee waivers are among the multitude of mortgage incentives flooding the market.
Industry experts say the mortgage industry is at its most-competitive level since the global financial crisis and Australians should expect to see many more attractive mortgage deals pop up this year to attract new business.
1300homeloan managing director John Kolenda said he expected increased competition in the mortgage market particularly for those looking to refinance.
“There’s very aggressive pricing and incentives whether they are application fee waivers or rebates, banks and lenders are trying to pick up more market share,” he said.
“It’s definitely the most competitive I’ve seen the market since pre-GFC and it’s likely to continue for the first half of this year.”
Interest rates have remained at historically low levels and the Reserve Bank of Australia has kept the cash rate on hold at 2.5 per cent since August.
Analysis by comparison website Finder found gift cards and cash back offers along with hefty interest rate reductions and fee waivers are among the dozens of incentives on offer.
The site’s spokeswoman, Michelle Hutchison, said this time of year was a quieter for both the property and mortgage markets but the range of attractive deals available had failed to subside.
To see so many lenders offering incentives particularly for refinancing it’s definitely a good time of year to refinance if you are an existing borrower,” she said.
“There’s definitely more competition to attract new customers and more people are refinancing.”
But she said customers should “think twice” before simply taking up a new mortgage product because of the incentive offered.
“People need to be careful with the incentives because a $250 gift card might not be the best value if the interest rate is higher than what you can get somewhere else,” Ms Hutchison said.
“Make sure the incentive is an added bonus to the deal that you apply for.”
Mortgage Choice spokeswoman Jessica Darnbrough said the new year was the perfect time for home loan customers to review their mortgages.
“I don’t think there could be a better time because we’ve seen the RBA suggest there is still room to move rates down if needed but they are looking pretty steady at the moment,” she said.
“If borrowers are considering renegotiating their loan now is a great time to do so with rates fairly stable and the lenders being very competitive.”
Original article published at www.news.com.au by Sophie Elsworth, News Limited Network 4/1/2014