The current Australian mortgage market is “minefield” and is only going to become harder to navigate according to one of the industry’s leading voices.
According to John Kolenda, head of mortgage broking network 1300HomeLoan, recent out of cycle interest rate rises combined with the variety of offerings from lenders has made the mortgage market increasingly confusing.
“Home owners have to tip toe through a mortgage minefield at the moment and it's only expected to get even more confusing. Interest rates are being raised independently of the RBA's deliberations while we also have a range of home loan products with some of the biggest price differentiations in memory,” Kolenda said.
“These product pricing differentials are across owner occupied, investor and interest only products. On top of that, lenders have different policies and loan to valuation ratios (LVRs) for the different products,” he said.
While much of the focus on interest rates centres on the RBA’s monthly board meeting, Kolenda has urged borrowers to pay close attention to their loan arrangements as lenders face further increases in compliance costs in the near future.
“Confused mortgage holders must be struggling to keep on top of all the changes. But they also can't afford to adopt a set and forget mentality with their home loan as it could cost them thousands of dollars,” he said.
“It has never been more important to review your home loan regularly than what it is today.
“I would definitely talk to a mortgage broker as they are the only ones who have access to a range of lenders. They can guide the confused home loan customer through the mortgage minefield and advise them on the best deals.”
It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan