The new year has arrived and with it comes another possibility of rising interest rates and rising house prices. So how can potential borrowers and refinancers cushion the blow of these events in 2022?
Experts have predicted the Reserve Bank of Australia could raise the cash rate over the next two years, with Westpac economists expecting a cash rate of 1.75% by March 2024.
And the number of suburbs with home values entering the million-dollar club has exploded in recent months. More than 300 new Australian suburbs have joined a growing list of million-dollar suburbs, according to the latest figures from CoreLogic.
If you’re considering taking out a home loan and are intimidated by housing costs, or want to refinance a lower rate loan now before the hikes, it may be worth exploring the repayment options available to soften the debt. OK.
Here are some of the repayment offers available to new and home loan refinance customers for January 2022, including lender’s mortgage insurance and Qantas loyalty points.
What deals are on offer this month?
Whether you’re a first-time home buyer or considering refinancing, it can be worth researching home loans that offer repayment offers. Cash back can vary between $1,000 and $5,000, depending on the lender and the size of your mortgage.
Cash back offers can cover some of the costs associated with refinancing, such as application fees, or be allocated to the new home through an expensive purchase, such as a new dishwasher.
According to the RateCity database, in January, 25 lenders (including the big four banks) are offering repayment offers, with the majority for refinancers only. Four cash back home loans are available for first time home buyers.
- Lender’s Mortgage Loan Insurance Reduction
You might be wondering what is available to help first-time home buyers? Many lenders offer their customers a reduced Lender’s Mortgage Insurance (LMI) offer, as well as the traditional lump sum cash back.
If your deposit is less than 20%, you will have to pay LMI, which can run into the tens of thousands of dollars, depending on where your property is located. And for those buying in the capitals, a deposit of this size is very difficult to obtain, which makes LMI an expensive inevitability.
Removing this cost for first-time home buyers can help reduce the financial stress of saving for a first-time home.
- For St.Customers George, The $1 LMI offer is available to eligible first-time home buyers with a 15% deposit, seeking a homeowner’s home loan and planning to repay principal and interest.
- For BOQ customers, IMT’s $1 offer is available to homeowners and first-time home buyers planning to make principal and interest payments. Approval is limited to deposits as little as 15% on qualifying home loans worth up to $1 million.
- For UBank customers,you may be able to get approved for a loan with a loan-to-value ratio (LVR) of just 85% without paying LMI.
- For 86,400 customers,you may be able to get approved for a loan with a loan-to-value ratio (LVR) of just 85% without paying LMI.
- Qantas loyalty points
You may be able to earn bonus Qantas frequent flyer points when you sign up for a home loan.
Macquarie Bank and Qudos Bank are currently offering a home loan sign-up deal that rewards borrowers with Qantas Points. These points may be available upon approval or released during the term of your loan. Plus, you won’t need to spend on qualifying purchases to earn these reward point bonuses.
|Lender||Qantas Frequent Flyer (QFF) Points Bonus||Interest rate||Comparison rate||To offer|
|Macquarie Bank Basic Home Loan Flyer||Up to 170,000 QFF points when you borrow $600,000||2.19%||2.19%||10,000 QFF points for every $100,000 loan taken out, 1,000 QFF points per month for the life of the loan, 25,000 QFF points on the third and fifth anniversary of your loan.|
|Qudos Bank Qantas Points Home Loan||150 QFF for every $1,000 loan balance, no minimum loan balance.||2.69%||2.69%||Earn 150 Qantas Points for every $1,000 on your loan balance per year, credited monthly. No minimum loan balance – earn points for the life of your loan.|
Source: RateCity.com.au. Data accurate as of 01/25/2022.
- Keep in mind that there is more to a home loan than an offer you are offered and it is always important to compare interest rates, fees and features of a loan before applying. For more information on whether any of the above loans suit your finances, consider using our home loan calculator to see how potential repayments might fit your budget.