Think you’re the only one going through mortgage pain? Well you’re not.
Think you have to grin and bear it? Maybe you don’t
About 16 per cent of households with a home loan are in “mortgage prison”, unable to refinance to a lower rate because they do not meet banks’ tough serviceability assessment rules, the Reserve Bank of Australia has revealed.
The RBA’s semi-annual review of financial stability says rising interest rates mean an increasing number of existing borrowers cannot pass a bank serviceability assessment, which tests a person’s ability to cope with a three percentage point increase in interest rates.
It means hundreds of thousands of households are stuck with their existing lender and unable to directly reap the benefits of strong competition in the refinancing market, with banks offering discounted interest rates and $4,000 cashbacks.
However, this research does not consider the relief that non-bank lenders can provide to those in mortgage stress – these lenders are not legally required to apply the serviceability buffer tests. And non-bank lenders still offer competitive rates.
Non-bank lenders cover about 10 per cent of the market and often only go through brokers.
If you want to learn more about how to get finance with non-bank lenders, contact your Origin broker.
And, if all else fails, you can still talk to your existing bank about getting them to drop their rates. As the central bank said, about one-third of borrowers who are unable to refinance have managed to renegotiate their interest rate with their current lender.
Call Origin Now on 1300 30 67 67 or fill in the form on this page to find out what your options may be.