Meredith Williams
12th October 2022
It’s easy to get caught up in the doom and gloom of the COVID-19 crisis. But for those who are looking to save money on their home loan, invest in a property, or even buy their first home – there are good reasons to act now.
Book in a quick call with our customer care team.
1 – Refinance
With interest rates at record lows, there are big savings to be made on your home mortgage.
If you’re in a position where you can refinance you may be able to get a lower rate and to take advantage of generous cash back offers of $2000 to $4000 from lenders, which may be more than enough to cover the cost of refinancing.
UNO home loans adviser Paul Sealey has calculated the sorts of savings that are possible using the below example as an illustration.
Someone with a loan of 600,000 with 28 years left to pay at an interest rate of 3.5% is making monthly repayments of $2,820.
If they refinanced their rate to 2.8% then their monthly repayments would drop to $2,578, and they would save $75,780 in interest over the life of the loan.
Alternatively, if they refinanced to the lower rate but kept their repayments the same, they would pay off their loan in 25 years and save $116,000 in interest.
The actual rate that you are able to secure will depend on your circumstances.
2 – Renegotiate
You might prefer not to gather the paperwork and deal with the loan discharging that comes with refinancing to a new lender.
Alternatively, your income might have dropped and refinancing might not be a viable option.
In which case, renegotiating with your current lender could be a good option. While savings might not be as large, a lender will often reduce your interest rate when challenged to do so. This is something UNO helps customers with all the time, speaking directly with a customer’s lender on their behalf.
“You could get the interest rate savings without having to go through the whole process of a refinance,” says Sealey.
Furthermore, the option of refinancing might still be available down the track when your circumstances change.
UNO offers this renegotiation service for free.
3 – Get ready for an investment property
The housing market has largely come to a standstill, but if you’ve been thinking about buying an investment property, this could be the time to make sure you’re ready for when the property sector gets going again.
With some analysts forecasting falls in property prices, if an investment purchase is right for you, you may be able to acquire an investment property at a lower price than before.
As and when we can all start safely going to open houses, you could at least get pre-approval for your investment loan so you’re ready for when they do. Most lenders’ loan approvals last for three months and you can apply to extend for another three month period.
Additionally, lenders are now adapting and are making it easier for borrowers to prove their identities from home, rather than having to visit their lender.
It’s a good idea to consult a mortgage broker, who can help collate the necessary documents.
You should also contact your financial advisor, who will be able to help you understand how the investment will work for you and the most tax-effective way to structure the purchase.
If you take action now, you could set yourself up to execute your investment strategy.
We do understand that there are also a lot of people who have lost their jobs and livelihoods while others have seen the value of their assets and investments shrink or even disappear.
If this is you, we have some articles that can help you understand your options in our Newsroom which we recommend you check out.
There is a lot of helpful information to understand what options are available to you and to help you make the best financial decisions for your situation. It’s easy to get caught up in the doom and gloom of the COVID-19 crisis. But for those who are looking to save money on their home loan, invest in a property, or even buy their first home – there are good reasons to act now.
1 – Refinance
With interest rates at record lows, there are big savings to be made on your home mortgage.
If you’re in a position where you can refinance you may be able to get a lower rate and to take advantage of generous cash back offers of $2000 to $4000 from lenders, which may be more than enough to cover the cost of refinancing.
UNO home loans adviser Paul Sealey has calculated the sorts of savings that are possible using the below example as an illustration.
Someone with a loan of 600,000 with 28 years left to pay at an interest rate of 3.5% is making monthly repayments of $2,820.
If they refinanced their rate to 2.8% then their monthly repayments would drop to $2,578, and they would save $75,780 in interest over the life of the loan.
Alternatively, if they refinanced to the lower rate but kept their repayments the same, they would pay off their loan in 25 years and save $116,000 in interest.
The actual rate that you are able to secure will depend on your circumstances.
2 – Renegotiate
You might prefer not to gather the paperwork and deal with the loan discharging that comes with refinancing to a new lender.
Alternatively, your income might have dropped and refinancing might not be a viable option.
In which case, renegotiating with your current lender could be a good option. While savings might not be as large, a lender will often reduce your interest rate when challenged to do so. This is something UNO helps customers with all the time, speaking directly with a customer’s lender on their behalf.
“You could get the interest rate savings without having to go through the whole process of a refinance,” says Sealey.
Furthermore, the option of refinancing might still be available down the track when your circumstances change.
UNO offers this renegotiation service for free.
3 – Get ready for an investment property
The housing market has largely come to a standstill, but if you’ve been thinking about buying an investment property, this could be the time to make sure you’re ready for when the property sector gets going again.
With some analysts forecasting falls in property prices, if an investment purchase is right for you, you may be able to acquire an investment property at a lower price than before.
As and when we can all start safely going to open houses, you could at least get pre-approval for your investment loan so you’re ready for when they do. Most lenders’ loan approvals last for three months and you can apply to extend for another three month period.
Additionally, lenders are now adapting and are making it easier for borrowers to prove their identities from home, rather than having to visit their lender.
It’s a good idea to consult a mortgage broker, who can help collate the necessary documents.
You should also contact your financial advisor, who will be able to help you understand how the investment will work for you and the most tax-effective way to structure the purchase.
If you take action now, you could set yourself up to execute your investment strategy.
We do understand that there are also a lot of people who have lost their jobs and livelihoods while others have seen the value of their assets and investments shrink or even disappear.
If this is you, we have some articles that can help you understand your options in our Newsroom which we recommend you check out.
Book in a quick call with our customer care team.
There is a lot of helpful information to understand what options are available to you and to help you make the best financial decisions for your situation.
This information in this article is general only and does not take into account your individual circumstances. It should not be relied upon to make any financial decisions. UNO can’t make a recommendation until we complete an assessment of your requirements and objectives and your financial position. Interest rates, and other product information included in this article, are subject to change at any time at the complete discretion of each lender.
