Winter is well and truly here, and it seems it’s not only the season that is getting frosty. Owner-occupiers seem to be getting cold feet compared to investors when it comes to the value of new home loan lending.
The latest Australian Bureau of Statistics (ABS) figures for May show that while the value of owner-occupier lending saw some month-on-month gains, investor lending hit its highest level since June 2015, seeing a $1.07 billion increase from April (seasonally adjusted figures).
Meanwhile, the number of first home buyers has fallen for the fourth month in a row, yet the value of first home-buyer loans has increased in May to $6.85 billion, according to ABS figures. This is reflective of rising property prices in Australia right now.
Banks are also beginning to lift fixed interest rates for home loans as speculation grows that the next cash rate increase by the Reserve Bank of Australia could come as soon as 2022. RateCity research found that over the last month, 19 lenders hiked at least one 3-year fixed rate, and 17 lenders increased at least one 2-year fixed rate.
Would-be borrowers still hoping to grab a competitive, low-rate home loan offer may need to consider comparing other benefits as well. This is where cashback deals may help home loan customers get more bang for their buck.
With offers including cashback up to $4,000, waived Lenders Mortgage Insurance and bonus credit card rewards available right now, let’s explore some of the home loan deals on offer for July 2021.
What cashback deals are on offer this month?
- Cashback deals
Depending on the lender and your loan amount, cashback deals on offer for July range from $1,000 to $4,000. They may be offered in the form of a direct deposit, subtracted from your loan balance or application fees, or offered as gift cards. Cashback deals may help new borrowers pay for those pesky upfront mortgage fees or refinancers to cover the costs associated with switching lenders.
In July, there’s been a few deals taken off the table, with the number of lenders offering cashback deals dropping from 24 to 17. Only one cashback offer is available from Credit Union SA for first home buyers this month. It appears that cashback is still being used in the home loan war between lenders to encourage refinancers to switch lenders.
- Reduced LMI
Another way some home loan lenders are offering competitive benefits on sign up is through waived Lenders Mortgage Insurance (LMI).
LMI can climb into the tens of thousands of dollars range depending on the value of your home loan, unless you have a Loan-to-Value Ratio (LVR) of 80% or less. For those first home buyers unable to save up a 20% deposit – particularly those in Sydney and Melbourne – LMI can be an intimidating cost
St. George is offering to help customers by offering a reduced LMI deal. The offer is available to eligible first home buyers with a 15% deposit looking for an owner-occupier home loan, and planning on making principal and interest repayments.
According to St. George, the eligibility requirements include:
- "Be a first home buyer applying for your first home loan for your first property
- Apply for a home loan with St. George from Monday 13 July 2020
- Your home loan has an LVR up to 85% at the time of formal approval
- Loan size must not be over $850,000
- For joint applications, only one applicant needs to be a first home buyer
- Only one property financed per application.”
Qantas frequent flyer points
You may be able to earn bonus Qantas frequent flyer points when you sign up for a home loan.
Macquarie Bank and Qudos Bank currently offer a home loan sign-up deal that rewards borrowers with Qantas Points. These points may be available at the time of approval or released over your loan term.
Plus, you won’t need to spend on eligible purchases to earn these reward points bonuses.
|Lender||Qantas Frequent flyer (QFF) points bonus||Interest rate||Comparison rate||Offer|
|Macquarie Bank Basic Flyer Home Loan||Up to 170,000 QFF points when you borrow $600k||2.39%||2.39%||10k QFF points for every $100k loan drawn, 1000 QFF points per month for the life of the loan, 25,000 QFF points on the third and fifth anniversary of your loan.|
|Qudos Bank Qantas Points Home Loan||150 QFF for every $1000 of loan balance, no minimum loan balance.||2.69%||2.79%||Earn 150 Qantas Points for every $1,000 on your loan balance p.a., credited monthly. No minimum loan balance – earn points for the life of your loan.|
Source: RateCity.com.au. Data accurate as of 08/07/2021.
- Keep in mind that there is more to a home loan than a deal being offered to you, and it’s always important to compare the interest rates, fees, and features of a loan before applying. For more information on whether one of the above loans may suit your finances, consider using our Home Loan Calculator to see how potential repayments could fit in your budget.