Happy Holidays From the entire team at Azura Financial, we would like to take this…
We wanted to bring you up to speed on two major changes to mortgage lending that have transpired over the past few months.
- The RBA cut the cash rate in June and July and subsequently, mortgage lenders have reduced their interest rates.
- Under construction from APRA, mortgage lenders have been given the green light to reduce their mortgage assessment rates, greatly increasing borrowing capacity for certain applications
Changes to Mortgage rates:
As you are probably aware the RBA has recently cut the cash rate by 0.5%.
PLEASE SEE TABLE BELOW FOR A SUMMARY OF CHANGES FROM A NUMBER OF LENDERS:
*St George Investment interest only -0.35% (June) and -0.3% (July) = 0.65% total.
*Westpac investment interest only -0.35% (June) and -0.35% (July) = 0.65% total.
Make sure you have checked your mortgage interest rate to ensure you have received the benefit of the rate cuts above.
What is an assessment rate?
The assessment rate is the interest rate used by mortgage lenders to calculate a buffered monthly repayment when they are assessing your borrowing capacity.
Im summary, APRA is proposing to remove the current 7% floor and include a 2.5% serviceability buffer above your actual home loan rate. I.e if your home loan rate is 3.5% then your NEW assessment rate would be 6% [3.5% + 2.5%]
We hope he above information is helping in bringing you up to speed with the current mortgage landscape. If you would like a consultation please call us here.