It's been a busy end to the year with many home buyers and refinancers trying to settle or go unconditional before Christmas. Lenders are continuing to fight for the lowest rate and we review what we think will be installed for the first quarter of 2021. Find out more below.
Interest Rate Update
It's been another record breaking month with big drops in interest rates. Did you think you would ever see your home loan start with a 1? Here are some of the market leading Rates as of the 21st December 2020.
*Did you know that the average mortgage rate this time 5 years ago was 5.61%.
To find out if you qualify for any of the above rates contact us today.
RBA cash rate
The RBA cash rate has remained the same at 0.1% - Read the full December Monetary Policy Decision HERE
Key takeaways:
Base rate remains at 0.1%
Employment growth was again strong in October
The Bank's policy response has lowered interest rates across the yield curve, which will assist the recovery by: lowering financing costs for borrowers
Given the outlook for both employment and inflation, monetary and fiscal support will be required for some time.
Looking ahead....What do we think the first quarter of 2021 holds in store?
With 2020 nearly over a lot of people will be pleased for the Christmas break and to start the New Year fresh. With the current low levels of Real Estate for sale around Brisbane we are expecting to see next quarter kick off to a strong start with a lot more coming to the market.
With a lot of enquiry around freehold houses and family homes, we believe this will be the strongest performing asset class around the city. Apartments are still performing badly and with a lot of finance restrictions still in place for inner city stock we don't expect to see this change in the near future.
With the introduction of the Best Interest Duty (BID) for mortgage brokers taking effect from the 1st January we are expecting to see processing times take longer than usual for the first couple of months and more paperwork for our clients to complete. More on this below.
Best Interest Duty (BID) legislation starts 1 Jan 2021. How will this affect you?
The best interests duty for mortgage brokers is a statutory obligation for mortgage brokers to act in the best interests of consumers (best interests duty), and to prioritise consumers’ interest when providing credit assistance (conflict priority rule). Although this is something we already practice it still requires additional paperwork and time, causing further pressure on the finance clause and buying experience.
Although we welcome the changes and believe it will strengthen our industry this legislation does not extend to include the banks directly. This still allows the bank to act in their best interest and potentially supply you a mortgage that may not be suitable, ultimately causing confusion to the market place with conflicting information and education.
Happy Christmas
To all of our Clients, Colleagues and Friends, we wish you a very Merry Christmas and a Happy New year. Thank you for all your support and trusting us to help you with your property journey, we are truly grateful. 🎅🏼🎄🎁
Covid-19
Unfortunately, the threat of Covid is still around and as we start to get used to the rules of getting out and about, signing in to our local shops and restaurants, job losses and unemployment are still a big reality. If you've been affected and are struggling with your finances there is help available and we advise you to seek guidance from your bank and/or credit provider as soon as possible for guidance. Contact details for most lenders can be found HERE
If you would like to find out more information on any of the above topics or would like to see how we can help you with your mortgage Contact us.
WARNING: The contents of this communication are not designed to replace credit advice. We have not taken into account your needs, objectives or financial situation. The comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts may result in a different comparison rate. The comparison rate is calculated on a $750,000 secured loan over a 25 year term at 60% LVR.