What you need to know about home loans in 2024
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What you need to know about home loans in 2024

Understanding your options to borrow or refinance could save you time on your loan — and thousands of dollars

By Josh Bozin
Mon, Mar 18, 2024 2:00pmGrey Clock 4 min

Deciding on a home loan is never an easy undertaking. When adding it to the growing checklist of things to do to either jump on or move up the property ladder—amid rising interest rates and soaring property prices, nonetheless—doing your home loan due diligence is imperative in order to gain the greatest benefits your individual circumstances.

In 2024, the average home loan in Australia was $615,174, showing a 2.3% increase when compared to January 2023, according to the Australian Bureau of Statistics (ABS) data. For first-time home buyers, the average loan amount rose from $485k to $514k, revealing borrowers are taking on bigger debts than ever before to secure their dream of home ownership.

ABS Data
ABS Data

 

ABS Data
ABS Data

 

For those seeking to refinance their mortgage, activity remains high as borrowers look to switch lenders to better manage persistently high interest rates. In June 2023,  the value of total refinancing between lenders was 12.6 per cent higher compared to June 2022, according to ABS data.

While Australian borrowers started the year with a 4.35 % rate, Dean Sacco, director and finance specialist at Urban Finance Co, says that the Reserve Bank of Australia has changed its language in recent months, with the expectation that the cash rate has peaked, giving buyers more confidence with their home loan repayments.

“Low stock levels are proving difficult for buyers but those who are motivated, with good incomes and good credit, will be successful in 2024,” says Sacco.

Here’s what you need to know.

What is a home loan?

When purchasing a home, a bank or a loan provider will lend money to the borrower in order to finance the purchase of a property. This is what home loan is, at its core. Of course, home loans come with certain caveats, such as a timeframe that the lender and borrower will agree on for the loan to be paid back. A payment schedule will also be decided on, which could be fortnightly or monthly, which can impact the amount of money repaid over time. And in addition, a borrower will be required to pay interest, which will be determined by the lender.

And what is refinancing? How does it work?

In its simplest form, refinancing is when you switch from your current loan to a new one, either with the same provider or a new one in order to obtain better terms on your mortgage. There are two types of refinances, which include external refinance, when you leave your current lender and switch to a new lender, and internal refinance, when you stay with your current lender, but make changes to your loan agreement.

In 2024, which bank is best for refinancing options?

While each case will be different and specific to the individuals at hand, according to Sacco, there are several banks in Australia currently offering great cashbacks for refinancing, such as ANZ and ME Bank.

“Gateway Bank, Heritage Bank and Adelaide Bank are also offering some competitive variable rates at the moment for owner occupiers,” he adds. “And Teachers Mutual, Beyond Bank and ubank are offering some competitive variable rates at the moment for investors.”

Is it better to refinance with the same lender?

If you’re looking to refinance, often, you can avoid certain refinancing costs if doing so with the same lender, but it’s always smart to shop around and compare offers  available. When looking to refinance, certain lenders will also offer competitive products and rates which could prove beneficial.

Is it good to refinance a loan?

At the end of the day, you want your loan (your mortgage) on terms that work best for you. Refinancing a loan allows you to obtain better terms on your mortgage, and in the process, can not only save you money but can help you pay off your home loan sooner. “You can also access equity to pay out higher interest debts, purchase a car or invest in property,” adds Sacco.

There are some drawbacks, however. Most notably, the potential for refinancing fees which, in some cases, are unavoidable.

Does refinancing hurt your credit?

There’s a misconception that refinancing automatically affects your credit score – it’s not always the case.

“Multiple credit enquiries in a short period of time or applying for buy now, pay later debts are two examples that lower your credit score,” explains Sacco. “This signals to new lenders that you are potentially a higher risk borrower.”

If you are looking to for the very best home loans to consider right now — or perhaps looking to refinance to suit your current needs — here are ten home loans to consider in 2024.

1. ANZ

  • Variable home loan
  • Variable rates from 6.64% p.a.
  • No ongoing fees
  • $0 ANZ set up

2. ubank

  • Variable home loan
  • Variable rates from 6.14% p.a.
  • Free extra repayments
  • $0 application
  • $0 ongoing fees
  • Redraw available

3. Macquarie Bank

  • Fixed home loan
  • 3 year fixed rates of 5.99% p.a
  • $0 application fee
  • $0 ongoing fee

4. IMB Bank

  • Fixed home loan
  • 2 year fixed rates of 5.99% p.a
  • $449 application fee
  • $0 ongoing fee
  • Eligible refinancers can get $2,000 cashback when switching their loan of at least $500k to IMB

5. ING Bank

  • Variable home loan
  • Variable rates from 6.14% p.a.
  • $0 application
  • $0 ongoing fees

6. Bendigo Bank

  • Variable home loan
  • Variable rates from 6.01% p.a.
  • $0 application
  • $10 per month ongoing fees
  • Redraw available

7. Newcastle Permanent

  • Variable home loan
  • Variable rates from 6.04% p.a.
  • $595 application fee
  • $0 ongoing fees
  • Eligible refinancers who apply online and borrow $250K+ (LVR 80% or lower) can get a $3,000 cashback

8. BCU Bank

  • Fixed home loan
  • 2 year fixed rate of 5.99% p.a.
  • No establishment or annual ongoing fee
  • 5% deposit required

9. HSBC

  • Variable home loan
  • Variable rates from 6.09% p.a.
  • Enjoy free extra repayments, online redraw and no ongoing monthly service fees

10. UP

  • Fixed home loan
  • 4 year fixed rate of 5.80% p.a
  • 10% deposit required
  • No application, monthly or annual fees

 

  • Talk to a broker or financial advisor for advice specific to your needs


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Australia’s top 10 most affordable regional property markets investors should watch

Whether you prefer the country or the coast, there are plenty of east coast options for cashed up buyers

By Bronwyn Allen
Fri, Apr 19, 2024 3 min

There are 10 local council areas scattered along the East Coast of Australia that offer both affordability and solid fundamentals for sustainable future growth, according to the research team at residential property network, PRD. The areas have been selected based on five criterion. They are affordability – defined as a median house price below $600,000, rising house values, strong rental yields to encourage investment, a strong pipeline of residential, commercial and infrastructure projects to facilitate local economic development, and low unemployment.

Here are Australia’s 10 most affordable regional property markets with great future potential.

Mackay, QLD

Mackay is a tropical coastal area located in north Queensland. It’s known for its closeconnection to the Great Barrier Reef. The median house price is $462,750, up 8.9 percent in 2023. Mackay attracts a lot of interstate migrants and is home to more than 120,000 people. It has a healthy economy with an unemployment rate of 3.7 percent and $1.7 billion worth of projects due to commence this year.

Toowoomba, QLD

The Toowoomba median house price was up 10.9 percent in 2023.

Toowoomba is located west of Brisbane and is known for its Victorian buildings, street artand surrounding national parks. The median house price is $560,000, up 10.9 percent in 2023. The city has a population of more than 180,000. The unemployment rate is 4 percentand there is $6.1 billion in projects commencing in 2024.

Townsville, QLD

Townsville is a coastal city in north-eastern Queensland. The median house price is $420,000, up 5 percent in 2023. It is home to more than 200,000 people. Unemployment is very low at 2.5 percent and there is $3.2 billion of projects commencing this year.

Dubbo, NSW

Dubbo is located west of Newcastle in the Orana Region and is home to the Western Plains Zoo. The median house price is $530,000, up 11.6 percent in 2023. The population has exploded in recent years to more than 56,000 people. The unemployment rate is just 2.2percent and the economy is thriving. There is a pipeline of $4.7 billion in projects commencing this year.

Tamworth, NSW

Located in north-east NSW, Tamworth is known for its popular annual Country Music Festival. It’s also the largest retail centre for the New England and Northwest Slopes regions. The median house price is $490,000, up 14 percent in 2023. With a population of more than 65,000 people, the economy is strong with unemployment of just 2 percent and $112.4million worth of projects commencing this year.

Griffith, NSW

Located west of Sydney and northwest of Canberra, Griffith is known for its prime produce production and wine cultivation. The median house price is $531,000, up 2.1 percent in 2023. Griffith’s population is about 27,000 people. The city boasts high economic resilience with a 2 percent unemployment rate and $258.7 million in projects in the pipeline.

Ballarat, VIC

Ballarat, Victoria

Ballarat is a 1.5hour drive west of Melbourne. It’s popular with city commuters who move here for housing affordability and a relaxed lifestyle with easy access to the city via train. The median house price is $570,000, down 4.2 percent in 2023 but up 92.9 percent over the past decade. The city has the third highest population in Victoria at about 118,000. Ballarat has an unemployment rate of 3 percent and a total projects pipeline worth $2.3 billion for 2024.

Shepparton, VIC

Shepparton is a rural area about two hours north of Melbourne. It is popularly referred to as the food bowl of Australia. The median house price is $475,000, up 4.4 percent in 2023. The population is about 70,000. The unemployment rate is just 2 percent and there is $1.8 billion in projects for 2024.

Wodonga, VIC

Wodonga is located on the border of NSW on the southern side of the Murray River. It is approximately 320km from Melbourne and 345km from Canberra. The median house price is $567,250, up 4.7 percent in 2023. With a population of about 44,000, the city’s jobless rate is 3 percent and there is $388.2 million in development set to commence in 2024, primarily new infrastructure.

Burnie, TAS

Burnie is a bustling port city located in Emu Bay in Tasmania’s north-west. Overlooking beaches and parklands, the area is known for its rich agriculture and mining projects. The median house price is $435,000, up 3.6 percent. Despite a rising population, the unemployment rate is falling and is currently 5.6 percent. In 2024, Burnie’s project pipeline is valued at approximately $1.6 billion. A significant portion is commercial development, primarily renewable energy projects.

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