Navigating Mortgage Options: Cashback, Interest Rates and More!
In the world of home loans and mortgages, there’s a lot more to consider than just the loan amount. Cashback offers, interest rates, and future financial security are all crucial aspects that can significantly affect your mortgage experience. At Mel Finance, we’re committed to guiding you through the financial maze and helping you make the most informed decisions.
Cashback Offers: The Glittering Trap?
There’s no denying that cashback offers from lenders can look extremely appealing.
- ANZ offers a range of $2,000 to $44,000,
- ANZ FHB comes with a special offer of $3,000,
- BOM proposes a $2,000 cashback that expires on 31/8/2023,
- BOQ and ME Bank offer $3,000 and $4,000, respectively, with no specified expiry date.
However, it’s crucial to note that while these offers can provide savings for a year or two, there are other important factors to consider when choosing a lender. Especially if you foresee a change in your financial circumstances and may not have the ability to negotiate later on. A recent case showed a borrower who was enticed by a $4,000 cashback offer but soon found themselves in financial strain when their circumstances changed. The inability to switch to a more suitable lender left them with higher repayments and interest, negating the initial cashback benefit.
Unfortunately, many Australian borrowers often focus solely on the cashback offer, failing to thoroughly compare other aspects. This oversight could lead to paying a higher price in the long run.
Interest Rates: Fixed or Variable?
There’s currently a lender offering a 5.49% interest rate on a 1-year fixed mortgage. This rate is quite appealing, especially when compared to the rates offered by industry giants like ANZ (6.29%) and Bank of Melbourne (6.19%).
Moreover, there is a variable rate option available at 5.64%, lower than the previously standard 5.94%. Another enticing offer is a variable rate option with a cashback offer at 5.89%.
Decoding Your Mortgage with Mel Finance
At Mel Finance, we prioritize understanding your short and medium-term goals. Our role is to assist you in finding the most suitable lender considering all factors, and not just the immediate financial gain from cashback offers.
Navigating Future Predictions
There is a whirlwind of anticipation and speculation surrounding the upcoming July RBA (Reserve Bank of Australia) board meeting and the potential interest rate increases. Lenders have already increased their 1-year and 2-year fixed-rate products, suggesting that rates may be higher than initially anticipated.
However, despite these whispers of potential rate hikes, the real estate clearance rates remain strong at around 69-70%. This consistency indicates a robust housing market and a continual demand for home loans.
In conclusion, while cashback offers can be enticing, it’s essential to consider all aspects of your mortgage. To understand your best options and navigate these uncertain financial waters, reach out to our experienced team at Mel Finance. Our mortgage brokers in Melbourne are dedicated to helping you make the best decisions in the finance industry.