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According to recent figures by CoreLogic, 45% of auctions were withdrawn from sale last weekend, with 84% of auctions being sold before the event.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.
- loans.com.au
2.48% p.a.
2.50% p.a.
$1234
Product details Close detailsloans.com.au Smart Home Loan 80
Owner Occupier, Principal & Interest
2.48% p.a.
2.50% p.a.
A low-rate home loan that could save you thousands, with no ongoing fees plus unlimited extra repayments and free redraws. Mozo Experts Choice Low Cost Home Loan 2020.^ You'll need to be borrowing $1 million or less and have at least a 20% deposit required.
Smart Home Loan 80
A low-rate home loan that could save you thousands, with no ongoing fees plus unlimited extra repayments and free redraws. Mozo Experts Choice Low Cost Home Loan 2020.^ You'll need to be borrowing $1 million or less and have at least a 20% deposit required.
-
$0.00
-
$0.00
-
yes - free
-
yes - free
-
Optional - with 0.10% additional interest
-
$520
-
2.48% p.a.
-
2.50% p.a.
-
$520
-
80.00%
-
$50,000
-
$1,000,000
-
Variable
-
Principal & Interest
-
Owner Occupier
-
Weekly, Fortnightly, Monthly
-
Read our Mozo Review to learn more about the Smart Home Loan 80
-
- HSBC
p.a.
2.95% p.a.
$1234
Product details Close detailsHSBC Fixed Rate Home Loan
Owner Occupier, Principal & Interest, LVR <80%
p.a.
2.95% p.a.
Have the security of a fixed rate for 2 years with the option to split with one of the HSBC variable Home Loans. No ongoing monthly service fees or annual fees. Mozo Experts Choice Fixed Home Loan 2020^
Fixed Rate Home Loan
Have the security of a fixed rate for 2 years with the option to split with one of the HSBC variable Home Loans. No ongoing monthly service fees or annual fees. Mozo Experts Choice Fixed Home Loan 2020^
-
$0.00
-
$300.00
-
yes - free up to $10,000 p.a.
-
no
-
no
-
$0
-
p.a.
-
2.95% p.a.
-
$0
-
80.00%
-
$50,000
-
$7,500,000
-
Fixed
-
Principal & Interest
-
Owner Occupier
-
Weekly, Fortnightly, Monthly
-
Read our Mozo Review to learn more about the Fixed Rate Home Loan
-
- Athena
2.34% p.a.
2.34% p.a.
$1234
Product details Close detailsAthena Celebrate Variable Home Loan
<60% LVR, Owner Occupier, Principal & Interest
2.34% p.a.
2.34% p.a.
Fast online application with no fees. Free extra repayments and redraw facility. Min 40% deposit. Crowned Best New Home Loan for 2020 by the Mozo Experts.^
Celebrate Variable Home Loan
Fast online application with no fees. Free extra repayments and redraw facility. Min 40% deposit. Crowned Best New Home Loan for 2020 by the Mozo Experts.^
-
$0.00
-
$0.00
-
yes - free
-
yes - free
-
no
-
$0
-
2.34% p.a.
-
2.34% p.a.
-
$0
-
60.00%
-
$100,000
-
$2,000,000
-
Variable
-
Principal & Interest
-
Owner Occupier
-
Weekly, Fortnightly, Monthly
-
Read our Mozo Review to learn more about the Celebrate Variable Home Loan
-
- UBank
2.49% p.a.
2.49% p.a.
$1234
Product details Close detailsUBank UHomeLoan - Discount Offer
Owner Occupier, Principal & Interest
2.49% p.a.
2.49% p.a.
Enjoy a super low rate, $0 fees and easy application with the Mozo Experts Choice Home Lender Bank of the Year.^ Free redraw with flexible repayments. Min 20% deposit.
UHomeLoan - Discount Offer
Enjoy a super low rate, $0 fees and easy application with the Mozo Experts Choice Home Lender Bank of the Year.^ Free redraw with flexible repayments. Min 20% deposit.
-
$0.00
-
$0.00
-
yes - free
-
yes - free
-
no
-
$0
-
2.49% p.a.
-
2.49% p.a.
-
$0
-
80.00%
-
$100,000
-
-
-
Variable
-
Principal & Interest
-
Owner Occupier
-
Weekly, Fortnightly, Monthly
-
Read our Mozo Review to learn more about the UHomeLoan - Discount Offer
-
- Suncorp
p.a.
3.28% p.a.
$1234
Product details Close detailsSuncorpFixed Home Loan Special Offer Home Package Plus
Owner Occupier, Principal & Interest
p.a.
3.28% p.a.
No monthly account keeping fees & No loan establishment fee. Get a $2,000 cash bonus when you refinance with an eligible Suncorp Bank Home Loan of $250k+. T&Cs & eligibility criteria apply.
Fixed Home Loan Special Offer Home Package Plus
No monthly account keeping fees & No loan establishment fee. Get a $2,000 cash bonus when you refinance with an eligible Suncorp Bank Home Loan of $250k+. T&Cs & eligibility criteria apply.
-
$375.00 yearly
-
$350.00
-
yes - free up to $500 per month
-
no
-
no
-
$0
-
p.a.
-
3.28% p.a.
-
$0
-
90.00%
-
$150,000
-
-
-
Fixed
-
Principal & Interest
-
Owner Occupier
-
Weekly, Fortnightly, Monthly
-
Read our Mozo Review to learn more about the Fixed Home Loan Special Offer
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^See information about the Mozo Experts Choice Home loans Awards
