Big changes are shaking up the home loan market. Your Aussie Broker can explain what’s happening and what it could mean for your home buying plans.
Recent developments are re-shaping the home loan market, and the news is looking good for home buyers. We bring you up to speed on four key changes you need to know about.
1. Interest rates are falling
After keeping the cash rate on hold for almost three years, the Reserve Bank of Australia (RBA) lowered the official cash rate in June. Not all banks have passed on the full 0.25% rate cut and some lenders could be pocketing part of the savings for themselves. Regardless, lower interest rates could mean your new home is more achievable, so now’s a great time to check back in with your Aussie Broker.
2. Your borrowing power may be on the rise
Great news for first home buyers, upgraders and investors: Your borrowing power may be about to increase.
Bank regulator APRA is reviewing the assessment rate lenders use to check home loan eligibility. Put simply, it means your borrowing power may increase, and it could be the uptick you need to fund your dream home.
This really is breaking news, so it’s worth a call to your Aussie Broker to know whether you should be revisiting your home loan plans. Remember, our home loan advice costs you nothing.
3. The First Home Loan Deposit Scheme is coming up
First home owners are on track for a fresh helping hand with the Federal Government’s election announcement of a new First Home Loan Deposit Scheme.
Here’s what we know so far.
The Scheme lets first home buyers purchase a place of their own with a deposit of just 5% while saving up to $10,000 in Lenders Mortgage Insurance.
Some conditions apply. To be eligible, first home buyers need to earn less than $125,000 annually ($200,000 for a couple).
The Scheme rolls into action from 1 January 2020, so there’s still time to prepare. However, it’s only available to 10,000 first home buyers annually. So it’s first in, best dressed.
Talk to your Aussie Broker today about the steps you need to take to prepare. That way you can be ready to apply for the Scheme when New Year’s Day 2020 rolls around.
4. Housing is more affordable
Number four on the list of game changers – and this affects all property buyers – is that housing is now much more affordable in many areas.
That means more opportunities to get extra bang for your buck.
In Sydney for instance, affordability has improved a whopping 12.4% over the last year. Buyers are also getting a better deal in Melbourne (affordability up 9.6%), Perth (+7.7%), Darwin (+5.9%) and Brisbane (+2.5%).
Holding out for prices to fall further could work against you. Data from CoreLogic suggests the worst of the downturn could be behind us. In Sydney, auction clearance rates recently topped the 60% mark for the first time in a year, while Melbourne clearance rates have held around 60% over three of the past six weeks to the end of May.
First home buyers are also making a welcome comeback, with 115,000 first home owners getting into the market in the last two years – the largest number since 2009/10.
The combination of a rate cut, less stringent lending criteria, a more affordable home market and new incentives all add up to one thing: It’s time to connect with your local Aussie Broker to see how you could benefit from the latest market shake up.
