Are you one of the many borrowers feeling trapped in a mortgage with an interest rate higher than the current market rate? Are you looking to refinance your mortgage? You’re not alone. Many borrowers find themselves locked into home loans that prevent them from taking advantage of better rates offered by other lenders.

Well, there’s good news on the horizon! In this blog post, we’ll look at the refinance process and potentially save you money on your new mortgage. Read on to discover how you may be able to escape the clutches of high interest rates to refinance your mortgage and secure a better deal for yourself.

The Evolution of Assessment Rates

For years, borrowers faced a significant hurdle when attempting to refinance their loans. Banks often used a conservative assessment rate, typically 3% above the borrower’s current rate, to determine their ability to afford higher repayments if interest rates were to rise. This strict criterion resulted in many borrowers being unable to meet the bank’s serviceability requirements and thus being unable to refinance.

Introducing a Game-Changing Policy

Thankfully, there’s a new policy in town that is set to shake up the mortgage landscape. Several lenders, including Westpac, St George, Commonwealth Bank, NAB, Granite, and Pepper home loan, have adopted a more borrower-friendly approach. They now assess borrowers using an assessment rate of only 1% above their current rate, significantly reducing the burden on borrowers and making refinancing a more viable option.

Eligibility and Conditions

While this policy shift is certainly exciting, it’s important to note that strict conditions still apply. Lenders require borrowers to meet certain criteria to qualify for a refinance. Here are a few key conditions:

1. Clean repayment history over the last 12 months.
2. New repayment amount that is lower than the current repayment.
3. Principal and Interest repayments only.
4. The new loan limit must not exceed $10-50k higher than the limit of the loan(s) being refinanced.
5. Loan to Value Ratio (LVR) must be equal to or less than 80%.
6. If you’re curious about whether you meet these conditions and are eager to explore the possibility of refinancing, don’t hesitate to contact us. Our team can assess your eligibility and guide you through the process, potentially helping you secure a better rate and regain financial freedom.

Conclusion

Disclaimer: The information provided in this fact sheet is not legal, taxation, or financial planning advice. It has been prepared without considering your specific needs, objectives, and personal financial situation. Before acting on this information, we recommend that you consider carefully if it is appropriate for your needs, objectives, and personal financial situation. All loan products are subject to lender criteria and approval. Fees, terms, and conditions apply.

The post Are you a Mortgage Prisoner? How to Refinance Your Mortgage appeared first on OneSite Finance.