In today’s post I’m interviewing Theo Angelopoulos from ‘The Loans Analyst’ on mortgages, rates and offers from a property investor’s point of view.
Hi Theo, lets dive straight in, I have 8 key questions for you:
Q1. What are your thoughts on the current interest rate situation?
It’s the most competitive interest rate market ever; record low rates with potentially another rate cut by year end. To find the low rates you need to look outside the big 4 or negotiate with your bank for a better deal.
Q2. Is it a good time to ‘fix’ the interest rate?
Fixed rates are so low you may consider locking in a portion, but be careful when locking in rates as you do lose some flexibility. As an investor in a decreasing rate environment you should remain agile just in case you need to change lenders, either to fund the purchase of another investment property or get a better interest rate on your loans.
Q3. What are some of the indicators that rates are about to change?
The key indicators to track would be the inflation figures. If inflation remains low, another rate cut may be on the cards. Also keep an eye on property values, if there is a sudden surge in property values expect the RBA to slow it down by increasing rates, but I can’t see that happening anytime soon.
Q4. What is the most important thing to know about mortgages?
All banks are not created equal. Every bank has different credit policies, interest rates and appetite for investor loans. Last year we saw APRA impose tighter lending standards in order to slow down the growth in property investing. However, over the past couple of months, banks with a low exposure to property investors have changed their lending policies offering better incentives to increase their market share. This is why you need to shop around and review your property loans every 2 to 3 years. Rates and conditions change, what was good when you first took out your mortgage may not be the best for you now.
Q5. What are the main lending policies for investors to be aware of?
Recent changes to lending policies have made it more difficult for investors to grow their property portfolios. The main change has been around borrowing capacity. Investors with 2 to 3 properties are finding it difficult to buy the next property. The difference in borrowing capacity between lenders can be measured in the $100,000’s. Seeking the advice from a loan structuring expert is paramount. Investors are also paying higher interest rates for their loans compared to owner occupiers. And, if you are paying interest only, you may also notice a slightly higher interest rate.
Q6. Explain re-financing and who should consider it?
Refinancing is simply swapping your current property loan to another lender. Apart from increasing the size of the loan to buy another property, you would want to refinance to get a better deal. There are very competitive home loan deals at present and you could potentially save thousands of dollars by refinancing. If it’s been more than 2 years since you reviewed your home loan, you could be paying more than you should. Although there have been many interest rate cuts, not all of the banks have passed them on to their customers.
Q7. Can you share some special offers in the market at the moment?
If you’re a property investor looking to borrow no more than 80% of the value of the property and prepared to make principle and interest loan repayments, I have a couple of lenders offering extremely low rates looking for investors wanting to pay down their debt.
If you are an owner occupier with a home loan less than 80%, you are a PAYG employee (i.e. working for someone else) and have been with your employer for 12 months or more, then I know of one bank that is offering the lowest variable rate home loan I have ever seen. It also comes with 100% offset account, no application fees or annual fee for the life of the loan. It’s very popular and I’m not sure how long it will last.
Q8. What makes you different?
My smile and that I love helping people to buy property and create wealth through property investing.
Theo is founder of “The Loans Analyst”. A premium mortgage broking business that has been helping clients to buy property and get a great deal on their home loan for over 10 years. Theo is passionate about property and a property investor himself. Theo is a member of Property Investment Professionals of Australia (PIPA) and full member of the Mortgage and Finance Association of Australia (MFAA). His office is located in the heart of the Sydney CBD and always happy to help aspiring property investors get into the market. Theo’s qualifications include Bachelor of Commerce degree, Advanced Diploma of Financial Planning and Diploma of Mortgage Broking.
For more information or to contact Theo, visit his website HERE.
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