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February 2nd, 2012
Just as the global capital markets continue to thaw out following the GFC, so too is the competition returning to the mainstream mortgage and investment debt markets. Following 3 months of contracting mortgage figures, May showed a solid recovery with mortgage sales increasing by 18.8% according to the AFG Mortgage Index.
Property markets around the country have been a little flat with speculation of rising rates and economic updates from abroad causing a dip in confidence. However the spike in May mortgage sales indicates that around the country investors are reaching for their wallets again and picking up good property deals.
The campaign delivered by the NAB where they very publicly ‘broke up’ with the other majors, offering to pay your exit fees to switch, has clearly been a catalyst for some fairly aggressive plays by the banks. Yet funnily enough there does not seem to have been a spike in the level of refinancing, suggesting that we as the consumer have an inherent level of loyalty to our current bank of choice.
With the competition hotting up it is always good to have a look around and make sure that your current bank or lender is doing the right thing by you and that your loyalty is being rewarded. I find few things more annoying than finding out that new to bank customers are getting a significantly better deal than I am as a loyal long-standing customer.
So for your existing debt, at this point you should not expect exit fees to be an issue thanks to NAB, and you should expect to see a greater degree of flexibility regarding the upper loan to value ratio’s. For your investment properties this is beneficial as it presents the opportunity to release some equity to fund a further purchase.
Regarding new lending, some medically focussed lenders will structure your debt to achieve a 100% lend on a property purchase. Be mindful that this form of lending often will have an element (say 20%) that must be repaid at an accelerated rate. This allows you to borrow 100% with no expense of Lenders Mortgage Insurance (LMI), and whilst your repayments are higher at the outset, this causes few problems for the medical professional due to strong and predictable cashflow from public and potentially private work.
So what does this all mean ? In essence there is significant competition in the lending market and the ability to get a better deal is constantly available and a small saving is rate or an improved structure of your debt could mean significant savings in the long run. If you would like to review your existing lending or are in the market for a new loan, please contact your team at MEDIQ Financial to arrange an appointment.