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Home loan wars heat up
June 8, 2011
As the housing market remains flat, it certainly pays to compare home loans. The major banks are offering discounted interest rates and larger mortgages in a bid to entice borrowers back to the market.
The current headline rate for most lenders is 7.8 percent, but new incentives knock that figure down to 7.0 percent.
If you’re borrowing more than $250,000, you can expect a 0.7 percent interest rate reduction on a standard variable home loan. while borrowers seeking $500,000 are in line for a 0.8 percent discount.
Lenders are also increasing the amount of money they will lend for a mortgage. In the post-GFC climate, most banks pulled back on lending amounts of up to 95 percent of a property’s purchase price. However, the Commonwealth Bank recently announced it had increased its loan to valuation ratio from 90 to 95 percent.
Current interest rate discounts:
CBA
Standard rate 7.81 percent
Loan amount $250,000-$500,000 – discount 0.75 percent
Loan amount up to $750,000 – discount 0.85 percent
Loans over $750,000 – discount 0.9 percent
Westpac
Offers similar discounts to CBA
Will lend up to 85 percent without requiring lenders’ mortgage insurance
Has reduced minimum deposit from 10 percent to five percent
St George
Loan amount $250,000-$500,000 – discount 0.8 percent
NAB
Recently launched an online mortgage via its UBank subsidiary with a 6.59 percent interest rate
Related mortgage links
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