Over 800,000 mortgages are rolling off very low fixed rates to much higher rates this year!

This means many homeowners are looking to refinance their loans, but some are finding themselves stuck with their current lender in ‘mortgage prison’.

Why is this happening?

Some borrowers are unable to refinance from their current loan because they can’t pass other lenders’ loan serviceability tests. This is a ‘financial stress test’ lenders use to determine if a homeowner’s income is sufficient to repay their mortgage should their interest rate increase by a further 3%. If you’re concerned about ‘mortgage prison’, contact our team learn about your options! Let us help you.

Is now the right me to buy an investment property?

New building approvals decreased by 8.1% in April to the lowest level in over a decade. However, demand for new housing is growing, due partly to an increase in immigrants, overseas students and tourists entering the country. This saw national property values rise by 1.2% in May and the national rental index increase by 0.8%.

This could benefit a property investor.

Despite higher interest rates, with enough equity and borrowing power, now might be a good me to buy an investment property. Here’s why…

  • Rents are rising and vacancy rates are low, meaning a low risk to landlords of their properties not generating income.
  • Fewer properties being built could see demand continue to outstrip supply, leading to increases in property values and capital gains. Thinking of buying an investment property? Let’s discuss your borrowing power.

Whether you want to purchase a property, need assistance managing a fixed rate expiry or anything else, I’m here to help. Get in touch and let’s work out a game plan that best suits your needs.

Published 28/06/2023