The big banks have their boxing gloves on and they're out to fight for your business. Once scrutinised for high fees, poor customer satisfaction and unreliable computer systems the banks are now deflecting the bad news with enticing new offers.
"We are all out to save as much money as possible and pay off our debts as quickly as we can," said Gill McLean from moneyQuest. And when the banks appeal to this mindset, we will all come and listen to what they have to offer, she added. McLean said she sees two major shifts occurring within the banking industry + the big four banks are become more competitive with fees and they are now willing to loan more money to customers.
Here is a breakdown of the recent changes:
More Competition
Mortgage exit fees have become a thing of the past. From July 1, exit fees will be banned under a new Government regulation.
Borrow More
Home owners can now borrow more money with the major banks because the Loan to Value Ratios (LVR's) have recently increased. The LVR is the amount lent in relation to the value of the property.
The new LVR percentages are:
Existing bank customers can borrow up to 95% LVR
New customers can also borrow up to 95% LVR, up from 90%.
Be aware that the value of the property is determined by the bank's valuation and is not the purchase price.
More to Choose From
Home owners can expect more competitive offers.
Banks will compete for your business
"The banks think that by getting rid of fees, it makes it simple for everyone. But financial decisions aren't simple," said McLean. The search for the best home loan is still fraught with danger. The best way to navigate the home loan maze is to understand the home loan process and work with a mortgage expert who can help you thru the process.
It can be difficult to decide which home loan solution is best suited to you. Comparison web site, ratesonline.com.au, can help you estimate the effects of different loan types by using their various online calculators.
The recent competition for your business is making a lot of noise in the marketplace but at the end of the day, home loan shopping still requires knowledge and time. Give yourself plenty of time to arrange finance and fully understand the loan you are applying for.
Help is only a phone call away
You can arrange a no obligation meeting with a home loan expert by completing the online enquiry form or by calling 1800 446 050.
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