Home buyer loan tools include online calculators, which allow buyers to estimate mortgage rates, payments and stamp duty to assist with buying decisions. With the latest decision by the Reserve Bank to lift the official cash rate, many property buyers may be looking to assess their prospects. Online calculators allow buyers to carry out a range of complex calculations simply and easily to plan their next move.
While the interest rate is integral to the cost of a mortgage and for many buyers the reality of buying, current price movement in the property market should also be taken into consideration. There may be good prospects if you know where to look. Following the latest RBA rate rise, we cover off on some of the key details and the tools we offer for buyers to plan their property purchase.
RBA Rate Rise Effect on Mortgage Rates
The Reserve Bank Monetary Policy Board lifted the official cash rate by 0.25% to 4.6% at its 29 September meeting. The cash rate is a lending rate for borrowings between lenders, not a rate that is offered to borrowers.
Lenders essentially use the cash rate as a base from which they then add their own funding costs and other margins to arrive at the rates they offer on different lending products. Mortgage rates are typically directly affected by changes in the cash rate. Banks and other property market lenders typically move quickly after a cash rate decision to increase or decrease their variable mortgage rates.
After the September announcement, Macquarie Bank was reportedly the first bank to announce a change to its home loan rate, followed by the other major banks. Variable rate loans were affected, while existing fixed-rate home loans are not. New fixed-rate home loans will likely be affected.
If the lender passes on the full amount of the 0.25% increase, the effect on an existing owner-occupier home loan with a 25-year mortgage is estimated at an increase of around $152 per month on a $1m mortgage, $137 per month on a $900,000 loan, $122 per month on an $800,000 loan, and $76 per month on a $500,000 home loan.
Home Buyer Loan Tools
Rates on new loans will also increase across the market. This may require a re-think of what properties you can afford to purchase. Prospective buyers can plan how this change will affect their plans using our online property finance calculators.
These tools are easily accessible online, easy to use and free. There is no obligation and no limit on how many times you use them and how many loan combinations are calculated.
Changes to rates affect how much lenders are prepared to lend to borrowers – Borrowing Power. Use our Borrowing Power Calculator to see your estimated borrowing capacity based on the latest rates.
Rates directly affect the monthly repayments. A key figure for most buyers taking on a new home loan. Use our Home Loan Repayment Calculator with your estimated Borrowing Power as the loan amount to calculate repayments on the loan you require.
These calculators are great planning tools and can be used to prepare before booking a session with one of our mortgage brokers. We can provide advice and guidance and specific quotes on borrowing power and loan rates and source the most suitable mortgage product.
Compare Mortgage Rates, Repayments, Costs
As mentioned above, when planning to buy a home with finance, buyers should take into consideration both the mortgage market and the property market. Across the country, there has been a downturn in property prices as a result of policies in the Federal Budget and other economic factors.
While a price downturn can be a negative for homeowners, it can be a positive from the buyer’s perspective. Rates are up and prices are down. A lower property price can mean less stamp duty which can lower upfront costs. It can also mean deposits can go further.
The deposit saved may result in a better loan-to-value ratio which may then result in a better rate offer and may avoid the need to pay Lenders Mortgage Insurance. Use the calculators to see how the deposit you have saved may affect your loan repayments on the properties you are considering.
Home Buyer Loan Tools – Property Market Guides
While online calculators are great for calculating loans, buyers can stay across the property market media to assist with their property selection. Reports and posts highlight which suburbs and areas are experiencing the greatest price drops and where homeowners are keen to sell. These posts may provide indications of where to look to find the best buys.
Use our online home buyer loan tools to estimate mortgage rates, repayments and connect with Yes Home Loans on 1800 000 937 to find your most suitable home loan.
DISCLAIMER: THE INTENTION OF THIS ARTICLE IS TO PROVIDE INFORMATION OF A GENERAL NATURE ONLY. THE ARTICLE IS NOT PROVIDED WITH THE INTENTION OF BEING THE ONLY SOURCE OF INFORMATION ON WHICH PROPERTY BUYERS SHOULD MAKE THEIR DECISIONS. BUYERS WHO NEED GUIDANCE AND ADVICE ON PROPERTY LOANS BASED ON THEIR INDIVIDUAL CIRCUMSTANCES ARE ADVISED TO CONSULT WITH A SPECIALIST MORTGAGE BROKER OR FINANCIAL CONSULTANT. NO LIABILITY IS ACCEPTED FOR MISREPRESENTATION OF FOR ANY ERRORS IN DATA, POLICIES AND SPECIFIC DETAILS THAT HAVE BEEN OBTAINED FROM OTHER SOURCES.