BEST TIME IN 12 MONTHS TO REFINANCE / REVIEW YOUR HOME LOAN (September 2020)


Central Banks around the world, led by the Federal Reserve, are not only the Lenders of Last Resort but are now the Bonds Buyers of Last Resort as well.

With the great chase of yield, the Interest Rate Swap Rates have fallen below the Commonwealth Government Bond Rates, and remarkably, this has been sustained since July 2020 as the below chart shows (source yieldreport.com.au).

 

 

What this means is that Bank credit risk is perceived to be less risky than Sovereign credit risk (just as absurd, if not more, than the trillions of bonds that trade on negative interest rates).

Bank funding costs become cheaper, the world is floating on a tera-ocean of freshly printed money looking for a home, and your home loan is just as good as any other asset class to benefit.

It takes about 10 minutes of your time to discuss your current personal and financial circumstances as to what probable action, refinancing or for an interest rate review, you should take.

If you can and want to refinance, then some banks will pay you to become their customer (aka cashbacks), as well as being offered current market interest rates that are better than what you may be offered as an existing bank customer.

If you cannot, or do not want to refinance, then a pricing review request is the only way to get a lower interest rate.

But be aware that lenders usually have two sets of interest rates tables; one for the acquisition of new business and the other, well … for existing, loyal, long term customers.

We are here to help. Please call to discuss your options.