Why now is the time to consider refinancing your home loan.

While interest rates have been at historic lows, 966,000 Australian households are estimated to be in mortgage stress and default (Digital Finance Analytics – DFA). DFA Principal Martin North says ‘the expectation is that in the next few months stress will continue to rise as mortgage rates rise’. In recent weeks, we’ve seen banks starting to hike up their rates, which they attribute to rising costs, despite the RBA keeping the cash rate on hold.

In addition, the Reserve Bank estimates that $360 billion worth of interest-only home loans will roll over to principle plus interest in the next three years. For the average borrower that’s about $7000 per year in extra repayments.

“So if there’s ever been a good time to give your home loan a health check or consider refinancing, it’s now” says ITC’s in-house finance broker, Samantha Moore. ITC Finance now offer access to 45+ lenders and all recommendations are backed by accountant advice from ITC’s principal Adam Beasley. “We’ve taken a wholistic approach to helping our clients, and that includes giving them the best advice on finance and ensuring investment property purchases are tax effective”, he said.

With such slow wage growth, it’s getting even harder to buy a home. Many potential buyers are still finding it difficult to even get into the property market. “Rentvesting could be an option for those with a deposit saved who can’t afford to buy in the area they want to live in, plus there can be great tax benefits”, says Adam Beasley. Rentvesting is where you buy an investment property in an area that you can afford and where growth is expected, then rent in the area you want to live.

The recent revelations at the Royal Commission into Banking have demonstrated that good advice is essential when getting a loan and buying a property. Call ITC for obligation free advice on your next property purchase or simply email [email protected] for a home loan health check or refinance.

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