In recent times, there have been significant shifts in the lending landscape, especially for investors looking to refinance their loans.
These changes have opened up new opportunities for investors to reduce their repayments and lower the cost of their debts. With banks becoming more flexible and offering better terms, investors can now take advantage of refinancing rebates and access lower assessment rates on their debts.
On a recent episode of The Property Nerds, InvestorKit head of research, Arjun Paliwal, spoke with Redom Syed, director at Confidence Finance, to unpack how one of the key changes that have taken place over the past 12 months is related to assessment interest rates for investors.
The duo noted that over the past year, investors have faced challenges due to changes in borrowing power and higher assessment rates, sometimes reaching 3 per cent. However, in the last month or two, several major banks and smaller institutions have started offering investors the chance to refinance their existing loans to their institutions, benefiting from lower assessment rates and more favourable terms.
They indicated that this development is particularly beneficial for investors as it allows them to target their debt portfolios more effectively and make their repayments more affordable. By switching from one lender to another, investors can significantly reduce their financial burden and create opportunities for long-term financial stability.
The new-found willingness of banks to offer refinancing options may come as a surprise to many, but it reflects a blend of Australia’s historically robust lending laws and some elements of common sense in the current market. Australia’s tough lending laws, which assess borrowers at higher interest rates (up to 9 per cent or 10 per cent), have played a crucial role in protecting the economy from the impact of interest rate fluctuations.
Still, the pair noted that the introduction of lower assessment rates provides borrowers with a more realistic view of their financial situation and the likelihood of facing higher interest rate cycles.
For those looking to take advantage of these refinancing opportunities, seeking professional advice from mortgage brokers can prove invaluable. Mortgage brokers have expertise in navigating the unique policies and guidelines set forth by different lenders. They can help investors understand their eligibility for refinancing, identify potential rate reductions and guide them through the process seamlessly.
Mr Syed emphasised the importance of investors taking the time to review their finances and explore their options when it comes to refinancing.
This is of particular importance for investors working with non-bank lenders.
The director stressed that it becomes even more crucial to ask specific questions about qualifying for rate reduction processes, as refinancers could see significant benefits from making a change.
In conclusion, the recent shift in assessment rates and the new-found willingness of banks to offer refinancing options present an excellent opportunity for investors to improve their financial situations.
By refinancing their existing loans to lenders with lower assessment rates, investors can reduce their repayments and pave the way for a more stable and prosperous financial future.
