Rising Home Loan Rates Will Cause Need For Financial Assistance
Surveyed Australians show concern for rising rates.
< 1 min
According to a survey by Finder, many Australian households would be pushed into financial hardship if their home loan rate increased out of cycle.
The survey found one in 20 (5%) of Australians with a home loan would require financial assistance if their home loan rate went up.
Further, more than half of borrowers (53%) – equivalent to 1.5 million people – would attempt to negotiate a lower rate if they suffered a rate rise.
The survey also found that one in four (25%) would refinance to another lender if possible, equalling an estimated 725,000 homeowners with a mortgage who would consider switching lenders if their interest rate went up.
Sarah Megginson, Finder home loans expert, noted that thousands of Australians had been left ‘debt vulnerable’ by the COVID lockdowns.
Further, Ms Megginson added that should rates go up, shopping around for a cheaper mortgage would be advised.
“Competition in the market is fierce so get on the phone and negotiate. Ask for a better deal – odds are, the rate your bank is offering new customers is lower than what you’re paying,” said Ms Megginson.
“If they won’t give you a better rate, take a walk to another lender and get a better deal. It’s easier than you think and you can save thousands of dollars a year.”
Early indications from several big regional real-estate boards suggest March was overall another down month.
Art can transform more than just walls—it shapes mood, evokes memory, and elevates the everyday. Discover how thoughtfully curated interiors can become living expressions of personal meaning and refined luxury, from sculptural furniture to bespoke murals.
2 min
For self-employed Australians, navigating the mortgage market can be complex—especially when income documentation doesn’t fit the standard mould. In this guide, Stephen Andrianakos, Director of Red Door Financial Group, outlines eight flexible loan structures designed to support business owners, freelancers, and entrepreneurs.
1. Full-Doc Loan
A full-doc loan is the most straightforward and competitive option for self-employed borrowers with up-to-date tax returns and financials. Lenders assess two years of tax returns, assessment notices, and business financials. This type of loan offers high borrowing capacity, access to features like offset accounts and redraw facilities, and fixed and variable rate choices.
2. Low-Doc Loan
Low-doc loans are designed for borrowers who can’t provide the usual financial documentation, such as those in start-up mode or recently expanded businesses. Instead of full tax returns, lenders accept alternatives like profit and loss statements or accountant’s declarations. While rates may be slightly higher, these loans make finance accessible where banks might otherwise decline.
3. Standard Variable Rate Loan
A standard variable loan moves with the market and offers flexibility in repayments, extra contributions, and redraw options. It’s ideal for borrowers who want to manage repayments actively or pay off their loans faster when income permits. With access to over 40 lenders, brokers can help match borrowers with a variable product suited to their financial strategy.
4. Fixed Rate Loan
A fixed-rate loan offers repayment certainty over a set term—typically one to five years. It’s popular with borrowers seeking predictability, especially in volatile rate environments. While fixed loans offer fewer flexible features, their stability can be valuable for budgeting and cash flow planning.
5. Split Loan
A split loan combines fixed and variable portions, giving borrowers the security of a fixed rate on part of the loan and the flexibility of a variable rate on the other. This structure benefits self-employed clients with irregular income, allowing them to lock in part of their repayment while keeping some funds accessible.
6. Construction Loan
Construction loans release funds in stages aligned with the building process, from the initial slab to completion. These loans suit clients building a new home or undertaking major renovations. Most lenders offer interest-only repayments during construction, switching to principal-and-interest after the build. Managing timelines and approvals is key to a smooth experience.
7. Interest-Only Loan
Interest-only loans allow borrowers to pay just the interest portion of the loan for a set period, preserving cash flow. This structure is often used during growth phases in business or for investment purposes. After the interest-only period, the loan typically converts to principal-and-interest repayments.
8. Offset Home Loan
An offset home loan links your savings account to your mortgage, reducing the interest charged on the loan. For self-employed borrowers with fluctuating income, it’s a valuable tool for managing cash flow while still reducing interest and accelerating loan repayment. The funds remain accessible, offering both flexibility and efficiency.
Red Door Financial Group is a Melbourne-based brokerage firm that offers personalised financial solutions for residential, commercial, and business lending.
Market downdrafts tempt people to adjust their investments, but that’s not always a wise choice.
If U.S. stock prices continue to fall, wealthy consumers could slow their spending, putting further pressure on the U.S. economy and markets. That could mean everything from fewer luxury cars and handbags being sold to reduced demand for top-end homes and fancy vacations. Broadly, retail sales rose a less-than-expected 0.2% in February from January, the Census Bureau …
Continue reading “Even Rich People Are Starting to Get Nervous About Trump’s Economy”
