Right now, banks are lending a lot less than they would want to – so naturally they are trying hard to lend more. Current incentives include continuing to pay cashbacks at 0.7-0.8% of the loan.

So, for a $500K mortgage that’s $4000.

They are even paying loyalty retention bonuses to keep clients who are refixing their home loans…sometimes. Banks are lending, even above 80% LVR – to existing, and to new clients.

They are processing new refinance deals in about 2 days. This is interesting as, if a client has a mortgage already, and are about to refix their loan at much higher rates than before – maybe if they looked at refinancing to another bank, they may not get better interest rates, but they will pick up a few thousand dollars cash.

Straightforward applications are generally being processed in 5-7 days. In some cases they are offering Interest Only even on owner occupied property. They are routinely offering 5 years for interest only on investment property.

There’s even something for those who want to build – ANZ have an excellent Blueprint to build, with some enhancements versus the old product – basically you still get discounted interest rates to help fund the interest cost, but they also pay a cash back now (they didn’t before), and they also allow clients to take a fixed interest rate during the build period, instead of dangling perilously on the variable rate until completion.

Clearly no one really knows where the interest rates are going to go. The Reserve bank wants to keep rates up to help control inflation – the trading banks ideally want the rates to come down so they can lend more.

In some ways, they pretty much cancel each other out. My two cents worth, for what it is worth, is that interest rates are hopefully near the peak. Property prices are near the low end of cycle. Current rates are close to historical averages, and no one will really benefit from any sudden dramatic increases or decreases,of interest rates or house prices.

I think it is reasonably likely that there will be some one off special deals (probably cash inducements) from the banks as their Spring Specials kick in, but I think it may be a good 12 -18 months before rates start to slowly ease, and possibly ease maybe 1.5 to 2% over the next couple of years.

It would be nice if it could happen in a relatively orderly fashion – but the markets in which we work are not famous for their predictability, so I’m not too sure about that – but all the more reason to get good advice. It is fair to say we find ourselves in challenging times, but equally it is important to not go into paralysis mode.

To plagiarise an old Noel Lemming ad – You want it, we’ve got it – let’s talk!

If you have any questions, get in touch with Kristina on 0274 777 382!