Risky business or perfect timing, is now the right time to purchase a property?
08 Apr 2020
In March we saw the Reserve Bank take the extraordinary step of cutting the official cash rate twice, bringing it a record low 0.25%.
This decision was made in response to the COVID-19 outbreak, with the Reserve Bank Board hoping shelter the economy from the fallout of the virus.
"The primary response to the virus is to manage the health of the population, but other arms of policy, including monetary and fiscal policy, play an important role in reducing the economic and financial disruption resulting from the virus,” said RBA Governor, Philip Lowe.
Banks and other home loan lenders soon followed by making adjustments to their fixed rate offers, with some even cutting rates to below 2%.
But will this move work in the favour of hopeful borrowers looking to purchase a property during a pandemic? Mozo Home Loan Expert, Steve Jovcevski say yes… if you qualify.
“If you have a stable income and your job is secure, it is absolutely a great time to buy for the first time in years. If prices drop in the future and you come across someone who’s really desperate to sell, you could snag a serious bargain,” he said.
Banks adjusting lending criteria for high risk borrowers
Despite cutting fixed rates, many lenders have reportedly tightened the ropes on their lending practises for borrowers looking to purchase property or refinance.
For instance, applicants with jobs deemed riskier, such as those in hospitality, tourism or Aussies who are in casual or self-employed work may find it harder to get the backing of a bank during this unprecedented time.
Online lender, Athena announced on its website that it would be pausing home loan applications until further notice while homeowners looking to refinance their existing mortgage may face a longer waiting time due to high demand and may only be able to borrow up to 70% of the property’s value.
What does all this mean for buyers?
With the current social distancing measures in place, buyers may be finding it tougher to nail down their dream property with private inspections and online bidding now becoming the new norm.
According to recent figures by CoreLogic, 45% of auctions were withdrawn from sale last weekend, with 84% of auctions being sold before the event.
On the other hand, he encouraged eligible homeowners to take advantage of the current low interest rate environment by trying to refinance to a better deal.
“If you are thinking about refinancing, your first step should be talking to the lender. Properties at the moment are being valued using past data, which can make lenders a little uneasy, so talking to the lender about having a valuation may be the way to go,” says Jovcevksi.
“Another option is to ensure you’ve built up a decent amount of equity in your property before you apply,” said Jovcevksi.
So if you’re ready to find out how much you could be saving on your home loan, head on over to our refinancing comparison tool!
Compare refinance home loans
Rates updated daily. Advertiser disclosure.
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Mozo experts choice awards won:
- Offset Home Loan - 2021
- Low Cost Home Loan - 2021
1.85% p.a.variable for 24 months and then 2.25% p.a.
2.21% p.a.
$1234
Product details Close details
Mozo experts choice awards won:
- Offset Home Loan - 2021
- Low Cost Home Loan - 2021
Smart Booster Home Loan
2 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR
1.85% p.a.variable for 24 months and then 2.25% p.a.
2.21% p.a.
New super low introductory rate home loan for two years. Min 20% deposit. No monthly or ongoing fees. Fast settlement times. Mozo award-winning online lender. Friendly, local Australian based team.
Smart Booster Home Loan
New super low introductory rate home loan for two years. Min 20% deposit. No monthly or ongoing fees. Fast settlement times. Mozo award-winning online lender. Friendly, local Australian based team.
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$0.00
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$0.00
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yes - free
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yes - free
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Optional - with 0.10% additional interest
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$520
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1.85% p.a.variable for 24 months and then 2.25% p.a.
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2.21% p.a.
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$520
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80.00%
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$50,000
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$1,000,000
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Variable
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Principal & Interest
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Owner Occupier
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Weekly, Fortnightly, Monthly
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Read our Mozo Review to learn more about the Smart Booster Home Loan
Details Close
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p.a.
n/a
$1234
Product details Close detailsUHomeLoan
Owner Occupier, Principal & Interest
p.a.
n/a
Fast, easy to apply and no ongoing fees. Choose between weekly, fortnightly or monthly repayments. 1 year fixed rates are for new Owner Occupier Principal & Interest loans.
UHomeLoan
Fast, easy to apply and no ongoing fees. Choose between weekly, fortnightly or monthly repayments. 1 year fixed rates are for new Owner Occupier Principal & Interest loans.
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$0.00
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$0.00
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yes - free up to $20,000 during fixed rate term
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no
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no
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$0
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p.a.
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n/a
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$0
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80.00%
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$100,000
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$2,000,000
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Fixed
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Principal & Interest
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Owner Occupier
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Weekly, Fortnightly, Monthly
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$395 Establishment fee waived for fixed rate loans that settle by 30 September 2021.
Read our Mozo Review to learn more about the UHomeLoan
Details Close
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p.a.
2.32% p.a.
$1234
Product details Close detailsBasic Home Loan
Fixed, Owner Occupier, Principal & Interest, LVR<70%
p.a.
2.32% p.a.
No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $750,000.
Basic Home Loan
No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $750,000.
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$0.00
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$400.00
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yes - free
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yes - free
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no
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$0
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p.a.
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2.32% p.a.
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$0
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70.00%
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$150,000
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$750,000
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Fixed
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Principal & Interest
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Owner Occupier
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Monthly
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Read our Mozo Review to learn more about the Basic Home Loan
Details Close
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Mozo experts choice awards won:
- Home Loan Innovation - 2021
- Investor Home Loan - 2021
- Low Cost Home Loan - 2021
1.99% p.a.
1.99% p.a.
$1234
Product details Close details Mozo experts choice awards won:
- Home Loan Innovation - 2021
- Investor Home Loan - 2021
- Low Cost Home Loan - 2021
Celebrate Variable Home Loan
<60% LVR, Owner Occupier, Principal & Interest
1.99% p.a.
1.99% p.a.
Fast and efficient online application. Automatic discounts as loan is paid down. Free extra repayments and redraw facility. Zero fees. Min 40% deposit required. Winner of three Mozo Expert's Choice Awards for 2021.
Celebrate Variable Home Loan
Fast and efficient online application. Automatic discounts as loan is paid down. Free extra repayments and redraw facility. Zero fees. Min 40% deposit required. Winner of three Mozo Expert's Choice Awards for 2021.
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$0.00
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$0.00
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yes - free
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yes - free
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no
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$0
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1.99% p.a.
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1.99% p.a.
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$0
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60.00%
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$100,000
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$2,000,000
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Variable
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Principal & Interest
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Owner Occupier
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Weekly, Fortnightly, Monthly
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Read our Mozo Review to learn more about the Celebrate Variable Home Loan
Details Close
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p.a.
2.62% p.a.
$1234
Product details Close detailsSpecial Offer Reward Me Fixed Rate Home Loan
Owner Occupier, LVR <80%, 300k+
p.a.
2.62% p.a.
Enjoy $3,000 cashback when you refinance with Virgin Money (T&Cs apply). Additional repayments up to $10,000 per annum. Reverts to the discounted variable rate on expiry of the fixed term.
Special Offer Reward Me Fixed Rate Home Loan
Enjoy $3,000 cashback when you refinance with Virgin Money (T&Cs apply). Additional repayments up to $10,000 per annum. Reverts to the discounted variable rate on expiry of the fixed term.
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$10.00 monthly
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$350.00
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yes - up to $10,000 per annum
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no
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no
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$450
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p.a.
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2.62% p.a.
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$450
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80.00%
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$300,000
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-
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Fixed
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Principal & Interest
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Owner Occupier
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Weekly, Fortnightly, Monthly
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$3,000 cashback for new borrowings of at least $300,000, applications by 29 August 2021, settled by 26 November 2021.
Read our Mozo Review to learn more about the Special Offer Reward Me Fixed Rate Home Loan
Details Close
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^See information about the Mozo Experts Choice Home loans Awards
