Welcome to Autumn 2023…just like that days are getting shorter and summer holidays memories are beginning to fade.
This month we are going to talk about the incentives that banks and lenders are offering to customers to try and attract more business.
These incentives are predominantly a cash lump sum, or it could be free NBN Internet for twelve months. Either way it is very enticing and an opportunity for the banks and lenders to pick up more loans for their books from the considerable number of refinances that will occur this year.
Firstly, let’s look at the advantages of these incentives. As you probably know, taking out a home loan is a big financial commitment. The prospect of receiving a cash incentive can be a huge drawcard for customers who are looking to secure a good deal. In many cases, the incentive can be used to cover upfront costs associated with refinancing, such as bank fees and government fees and still have a little left over to reduce credit card debts or pay an outstanding bill.
However, it is important to note that there are also some risks associated with cash incentives. The main risk is that customers may be tempted to take out a home loan with a particular lender based solely on the size of the incentive, rather than on the overall quality of the loan. This could mean that customers end up with a loan that does not suit their needs, or that they end up paying more in interest over the life of the loan.
As your mortgage broker, we always recommend that our clients look at the overall features and benefits of a loan before making a decision. While a cash incentive can be a nice bonus, it is important to consider things like interest rates, fees and charges, and flexibility of the loan before signing on the dotted line.
It is also worth noting that not all lenders offer cash incentives, and the ones that do may have different eligibility criteria. For example, some lenders may only offer incentives to customers who are borrowing a certain amount and are willing to open accounts with that bank. As always, we can help you navigate these requirements and find a loan that suits your individual circumstances.
If you are interested in finding out more about cash incentives for home loans, or if you are thinking about taking out a home loan and want some advice, do not hesitate to get in touch with us. We are always here to help.
At its meeting today, the Board decided to increase the cash rate target by 25 basis points to 3.60 per cent. It also increased the interest rate on Exchange Settlement balances by 25 basis points to 3.50 per cent.
Global inflation remains very high. In headline terms it is moderating, although services price inflation remains elevated in many economies. It will be some time before inflation is back to target rates. The outlook for the global economy remains subdued, with below average growth expected this year and next.
The information provided in this newsletter is general in nature and does not take into account your personal circumstances, needs, objectives or financial situation. This information does not constitute financial advice. Before acting on any information in this newsletter, you should consider its appropriateness in relation to your personal situation.