Tips Archives | AXTON Finance

Should you wait for more cuts or buy now?

Posted on 28/07/202528/07/2025 by Hunter Scribe

It’s the question on many buyers’ minds right now: Should you wait for the Reserve Bank of Australia (RBA) to make more rate cuts, or take action now?

At face value, it might seem smart to wait. After all, lower rates could increase your borrowing power and reduce repayments. But in practice, trying to time the market perfectly can backfire.

Whether you’re looking to upgrade or invest in property in Melbourne, weighing up the risks of waiting versus buying now comes down to your goals, finances and how the market is moving.

The cost of waiting

For buyers looking to upgrade or invest, delaying your move might seem prudent in uncertain times, but it can come at a significant cost:

Missed capital growth

Property values in desirable Melbourne suburbs tend to appreciate over time. Every month spent waiting could mean missing out on potential capital growth. For instance, Melbourne’s median dwelling value declined over the last two years, but since the beginning of 2025 has started to recover. Over the June 2025 quarter, the city’s median dwelling value grew 1.1%, according to Cotality. Over the last 10 years, prices have grown 40.6%.

This recovery suggests buyers waiting for a clear turning point may already be behind it. The long-term growth shows how property continues to deliver value. Short-term rate fluctuations tend to have less impact over time than buyers expect. What matters more is getting into the market early enough to benefit from compounding capital growth.

Increased competition

In the week ending 20 July, only 586 homes were scheduled for auction in Melbourne, according to PropTrack – 9% fewer than the same week in 2024. This subdued activity is partly due to the RBA’s decision to hold rates steady in July, prompting some sellers to delay listing their homes.

But even before that, stock levels had been lagging. SQM Research also reports that total listings in Melbourne were down 0.8% year-on-year in June.

At the same time, buyer demand is picking up. The Westpac-Melbourne Institute’s July 2025 consumer sentiment bulletin shows rate expectations are at their lowest point in 13 years, and the ‘time to buy a dwelling’ index has risen 16.9% compared to a year ago.

With fewer properties on the market and more buyers regaining confidence, the balance between supply and demand is tipping. If this trend continues, it could lead to tighter competition, faster selling conditions and further price pressure.

Reduced purchasing power

Even small increases in property prices can have a significant impact on what you can afford. Domain is predicting Melbourne’s prices will climb 6% for houses and 5% for units over the 2025-26 financial year. If you are looking at a median-valued house, that’s $66,000 added to the asking price over the next year.

As prices rise, your borrowing capacity may not stretch as far, meaning you could be priced out of your preferred location or need to compromise on property features.

The risks of buying too quickly

While the costs of waiting can be significant, it’s also true that rushing into a purchase without due diligence carries its own set of risks:

Overpaying

Buying quickly without thorough market research can lead to paying more than necessary. A rushed decision might mean missing a better deal if the market shifts.

Emotional bidding, particularly at auctions, can also lead to paying more than a property’s true market value, which can reduce your potential gains.

Overlooking hidden issues

Skipping proper due diligence, such as thorough building inspections, can expose you to costly repairs or legal complications down the road. According to research done by the Australian Housing and Urban Research Institute in 2024, 70% of homes had some building quality problems. Cracks in the walls were the most common issue (44%), followed by mould (35%) and plumbing issues (27%).

Rushing the process increases the chance of missing these critical problems, which can affect both your finances and peace of mind.

Getting thorough pest, building and structural inspections before committing is essential. These reports help you uncover hidden issues early, so you avoid costly surprises later and can negotiate confidently.

Compromising your strategy

Purchasing a property that doesn’t align with your long-term goals can set you back financially and emotionally. Whether it’s location, property type or loan structure, buying without a clear strategy may result in costly compromises, such as higher ongoing costs or difficulties when you decide to sell or rent out the property.

You can’t time the market, but you can be ready

With prices recovering and competition rising, waiting could mean missing out. But market conditions can change anytime, and no one can pick the perfect time. Being financially ready, strategically prepared and confident enough to act when the right property comes up is what matters.

Instead of trying to predict the market, focus on what you can control:

Define your property strategy

Decide what you are looking to achieve with this purchase. Is it an upgrade on your current family home? Or are you buying an investment property to build long-term wealth?

Knowing your goals will help narrow your search and prevent decision fatigue. It also helps you weigh up trade-offs with greater clarity, so you’re not distracted by properties that don’t serve your purpose.

Know your borrowing power

Understanding what you can afford today is key. Lenders’ policies, interest rates and your financial circumstances all play a role in determining your borrowing capacity. Assessing your borrowing power involves a comprehensive look at your income, expenses, existing debts and desired loan structure.

Getting this clarity upfront means you can move quickly and decisively when the right property comes along, without the last-minute scramble of understanding your limits.

Get expert guidance

Surrounding yourself with the right experts can make the process smoother, faster and ultimately more rewarding. A mortgage broker can help you identify your borrowing power, compare suitable products from dozens of lenders and find a loan structure that suits your goals.

Still wondering whether to wait or buy now?

A good mortgage broker in Melbourne, like AXTON Finance, will help you answer the bigger question: is now the right time for you to buy?

We’ll guide you through weighing the pros and cons of buying now versus waiting, based on your unique financial position and property goals. We prepare you for a confident next step – whether that means acting quickly or holding back for the right opportunity.

If you’re unsure whether to wait or buy, talk to AXTON Finance today. Call 03 9939 7576, email [email protected] or click here to get started.

Simultaneous settlement – how to buy and sell property on the same day

Posted on 20/06/202504/07/2025 by Hunter Scribe

Planning to upgrade or downsize your home? A simultaneous settlement lets you buy and sell on the same day – avoiding the cost and stress of bridging loans or short-term rentals. But pulling it off takes a little smart planning and teamwork.

What is simultaneous settlement?

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A simultaneous settlement means the funds from the sale of your old home are used, in real-time, to complete the purchase of the new one.

This ensures a seamless transition and is a common strategy in competitive property markets like Sydney or Brisbane, where property prices are high and timing is important.

How does simultaneous settlement work?

Achieving a simultaneous settlement requires planning and communication between all parties involved, including you (the homeowner), the buyer of your old property, the vendor of your new property, both real estate agents, two conveyancers and the lenders for all parties.

Should you buy first or sell first?

Before coordinating the moving parts of a simultaneous settlement, you first need to decide whether you should buy or sell first.

In a rising market, many people choose to buy first. This gives you time to find the right property and potentially buy before prices climb even higher. The downside is that if your current home takes longer to sell or goes for less than expected, you could be left covering two mortgages (bridging finance) or falling short of what you need to complete the purchase.

In a softer market, many buyers believe selling first is the safer bet. This removes the pressure to accept a low offer and gives you a clear budget for your next purchase. However, you may need to line up short-term accommodation if you can’t find a new home quickly.

Whatever your approach, extended settlement periods and smart negotiation strategies, like making your offer subject to the sale of your current property, can help line up both transactions and increase your chances of a same-day settlement.

The process typically involves:

1. Getting pre-approval

Before you start house hunting, speak to an experienced home loan broker about your mortgage. A good broker can assess your financial situation, develop a strategy and help you secure pre-approval for your next home loan. This gives you a clear understanding of your borrowing capacity and demonstrates to real estate agents that you are serious and financially prepared.

2. Aligning settlement dates

Once you’ve found a buyer and your next property, the next step is to negotiate settlement dates that match. This can take skilled negotiation from agents, buyers’ advocates (if you use one) and conveyancers on both sides.

During this process, the agents may request a longer settlement period, perhaps 60 to 120 days, on both contracts to provide a sufficient buffer to get everything in order. You may also be required to be flexible in both your selling price expectations and your new property criteria.

3. Coordinating home loans

Once contracts are exchanged and settlement dates are set, your mortgage broker will begin preparing the formal loan application for your new property. At the same time, the lender for your current mortgage will be notified of the upcoming discharge.

There’s a decent amount of paperwork here, and timing is everything. Thankfully, your mortgage broker does the heavy lifting for you. Your home loan broker will work closely with both lenders to ensure the funds from your sale are released in time to fund your purchase. This may also include managing any loan top-ups or redraws, and ensuring valuations are completed promptly.

4. Managing legal communication

Each property requires a conveyancer or solicitor to handle the legal aspects of settlement. For simultaneous settlement to succeed, both conveyancers need to communicate regularly to make sure that:

All documentation is accurate and complete

All funds are accounted for, including the deposit and balance payments

The order of settlements is correctly arranged through PEXA (Australia’s digital property settlement platform) – the sale usually settles just before the purchase

If the timing is off, the entire chain can be delayed, so having reliable legal support is essential. In some cases, especially when buying before selling, your solicitor may recommend including a “subject to sale” clause in the contract. This condition allows you to make a purchase offer that’s only binding once your existing home has sold, helping reduce financial risk, but this can reduce the strength of your offer.

5. Completing both settlements on the same day

On settlement day, both properties settle, usually within hours of each other. Typically, your current home will settle first, with those funds immediately directed (via your lender) to fund the purchase of your new home.

If all goes according to plan, the keys to your new home will be handed over that afternoon.

What could go wrong with simultaneous settlement?

Unfortunately, if one settlement is delayed, it can create a bit of a problem.

Some common risks include:

Delays with finance approval: It is helpful if your new home loan is fully approved and ready in advance. That’s why working with an experienced mortgage broker can make all the difference.

Issues with the buyer’s finance: If your buyer’s loan isn’t ready, your sale could fall through or be delayed, which then impacts your ability to settle your purchase.

Contract mismatches: Settlement dates must be exactly aligned in the contracts of sale and purchase.

Property defects discovered late: Structural issues, pest problems or building compliance matters identified during final inspections can derail transactions at the last minute.

Legal documentation delays: Missing certificates, title issues or incomplete paperwork can prevent settlements from proceeding on schedule.

To reduce these risks, it’s important to plan ahead, give yourself buffer time and ensure your loan application is complete and accurate from the outset.

How can an expert mortgage broker help with a successful simultaneous settlement?

A great mortgage broker can help manage the timing of your home loans to ensure your finance is in place when you need it.

This can involve:

Pre-approval guidance: A mortgage broker can assist buyers in securing conditional approval, helping you make a confident and competitive offer when purchasing a property.

Loan structuring: Whether you are upsizing, refinancing or unlocking equity, a broker will structure the finance to support the timing of both the sale and purchase.

Coordination: The broker coordinates with your solicitor, conveyancer and lender to ensure the financial side of the settlement stays on schedule.

Plan B options: If simultaneous settlement becomes too risky or tight, a broker can walk you through alternative strategies such as bridging finance or short-term refinancing.

Simultaneous settlements are actually quite common and when managed properly can remove a lot of stress and complexity (ie no bridging finance is required), but they require careful planning, strong communication and the right professionals on your side. An experienced home loan broker can make all the difference, ensuring your finance is ready, your timing is right and your move goes smoothly from start to finish.

If you’re planning to buy and sell on the same day, AXTON Finance can help. As a trusted mortgage broker in Melbourne, we’ll coordinate with your legal team and lender to keep everything on track. Email us at [email protected] or click here to get in touch.

Tips for accessing our client centre from overseas

Posted on 13/02/202513/02/2025 by Clinton Waters

If you’re based overseas, you may encounter access restrictions to our secure client centre due to enhanced security measures in place.

To ensure seamless access, we recommend using a VPN (Virtual Private Network) such as Surfshark, NordVPN, ExpressVPN, or similar services. Note there are some free options out there, but they may be less reliable.

A VPN helps protect your data by encrypting your internet connection and allowing you to securely browse as if you were in Australia. Beyond accessing our secure platform, a VPN offers additional benefits, including:

Streaming Services – Access your favourite Australian content on Netflix, Stan, or local online TV networks

News & Content – Stay updated with Australian news and location-restricted websites

Local Google Searches – Get search results relevant to Australia instead of your current location.

Cheaper Airfares & Shopping – Take advantage of location-based pricing on flights, hotels, and online purchases.

Moving Made Easy: How Upmove Takes the Stress Out of Relocation

Posted on 16/09/202411/10/2024 by Clinton Waters

We help clients every day arrange competitive home loans for new homes and renovations, and one of the inevitable outcomes is moving all of your belongings from one place to another. We’ve all been through it—moving ourselves or helping friends—and it’s rarely fun. Whether it’s trying to fit a bulky couch down a narrow staircase or managing fragile items, moving is almost always stressful.

While you could go online, search for a removalist, and cross your fingers, there’s a much better way to ensure your move goes smoothly. Upmove is a platform that connects you with trusted removal companies, making it easy to get reliable, competitive quotes without the hassle of calling around. Whether you’re moving locally or interstate, you can compare and book professional removalists quickly and easily, removing the worry that usually comes with moving.

Given how time-poor most of us are, and how much we dread moving, why not simplify the process? We highly recommend Upmove to our clients for a stress-free experience. Whether you’re moving for a new home, renovation, or relocation, Upmove helps you stay on budget while ensuring that your items are in good hands. You can explore their services and book your next move here: Melbourne Removalists.

At AXTON Finance, we pride ourselves on making the process of buying a new home or renovating as seamless as possible. Whether you’re upsizing, downsizing, or simply relocating, we know exactly what the banks need to make your dream home a reality. And when it’s time to move, don’t let the stress get to you. For your next home move, consider using Upmove for an efficient, hassle-free experience: Melbourne Removalists.

Let us handle your home loan while Upmove handles your move, and make the entire process as smooth as possible.

How to Choose a great mortgage broker?

Posted on 03/06/202409/09/2024 by Nick

If you are trawling the internet to find a great mortgage broker then these seven tips are what you should be looking for;

Minimum Five Years Broker Experience: Ensure your broker has substantial experience handling various scenarios and providing you with experienced advice earned over years, not months. Newer brokers will be desperate to originate your loan application at all costs and will often lack the experience to prepare a high-quality mortgage application submission that may result in your loan taking longer to be approved or even declined.
Strong Online Google Reviews: Check for positive reviews and testimonials from previous clients to gauge their reputation and service quality. Be wary of lots of short reviews that appear in a condensed period, as they are less likely to be legitimate. Instead, look for someone like AXTON Finance, who has hundreds of excellent reviews over many years. A simple independent search of the company name plus the word ‘reviews’ will help you determine if they pass your sense check.
Fully Licensed: Verify that your broker holds all necessary licenses and certifications required by regulatory authorities. As a minimum your licensed mortgage broker should have a Certificate IV in mortgage lending but preferably a Diploma in Mortgage and Finance Broking. Licensed mortgage brokers should be members of the MFAA (Mortgage Finance Association of Australia) and/or the FBAA (Finance Brokers Association of Australia). You can check their credit license status via the government’s ASIC (Australian Investment & Securities Commission) website here. Mortgage Brokers are also required to be members of the government’s Australian Financial Complaints Authority (AFCA) should there ever be the need to lodge a complaint that cannot be resolved.
Comprehensive Product Knowledge: Look for a broker who is well-versed in various mortgage products and scenarios and can offer you tailored options that fit your needs. Not all mortgage brokers are experienced enough to handle your application if you have any unique or complex variables about your situation especially if you are self-employed, have complex income streams, are an expat and/or a high net worth individual.
Transparent Fee Structure: Ensure that your broker provides clear and transparent information about their fees and commissions to avoid any hidden surprises. All licensed mortgage brokers are required by law to disclose their remuneration earned on all regulated loan applications lodged to help comply with best interest duties that champion your interests first.
Excellent Communication Skills: A good mortgage broker should maintain open lines of communication, keeping you informed throughout the process and promptly addressing any concerns. Ideally, your trusted mortgage broker will be updating you through efficient systems of communication instead of your chasing them up seeking an update.
Proactive and Personalized Service: Choose a broker who takes the time to understand your financial situation, goals, concerns and preferences, offering proactive and customized advice rather than a one-size-fits-all approach.

This checklist will help you find a mortgage broker who can provide valuable guidance and support, ensuring a smoother and more beneficial mortgage experience.

As shameless self-promotion, we are confident we will pass all seven points summarised above, so why not save yourself the time and risk and call us for an obligation-free chat today?

Should You Be Loyal To Your Bank?

Posted on 21/12/202321/12/2023 by Clinton Waters

When it comes to your money, especially a significant commitment like a mortgage, loyalty to your bank might seem like a good idea. Many homeowners tend to stick with their original lender out of familiarity, a sense of loyalty or sometimes because they think it’s too hard to change. However, the mortgage landscape is constantly evolving, regardless if interest rates are increasing, decreasing or going sideways and sticking with your bank probably isn’t always in your best interest – not that they will tell you this…

Is maintaining allegiance to your bank when you have a mortgage crucial? Or does prudently exploring better deals that align with your interests make more financial sense?

The myth of loyalty

The notion of loyalty to your bank is deeply ingrained in many individuals. Often, people associate familiarity and a long-standing relationship with their bank as a form of security. However, while loyalty may have its merits in certain aspects of life, it might not always pay dividends in the realm of your home loan and your hard-earned dollars.

New to bank = a better deal

You would think that being loyal means you should get a better rate or a discount like you do with your insurance company, but this is often not the case. While you might get a slight improvement by haggling with your old bank the overall system is hugely hungry for ‘book growth’, meaning banks and lenders will usually trip over themselves to get new customers in the door and rely on their ‘loyal’ customers to stay put at higher rates – it’s just the way the system often works. Even when you get your current bank to tweak your rate, there will come the point when the ‘computer says no’ because the return on their loan isn’t worth it anymore for a host of technical reasons – you might think you got a better deal, but did you?

You don’t know what you don’t know

Mortgage rates fluctuate regularly. What might have been a competitive rate when you initially secured your mortgage a few years back could now pale in comparison to newer, more favourable deals available in the market. By limiting yourself to one lender, you could potentially miss out on a better interest rate or more favourable terms offered by other banks and lenders.

Why reviewing your mortgage regularly is crucial

One of the keys to ensuring you’re not missing out on a better deal is to review your mortgage at least every one to two years. This proactive approach allows you to assess if your current loan still aligns with your financial goals and if there are better options available. You are probably unsurprised that banks don’t prioritise this process, and they are not obliged to always act in your best interest – licensed mortgage brokers are, however! This means you may be unaware of a better rate available from your current lender or someone else in the market.

This is where the expert mortgage brokers at AXTON Finance can help save you a lot of time and money. AXTON Finance is committed to empowering homeowners by regularly reviewing their loans with automated repricing tools that needle your bank or lender to ensure you get the best rate for your scenario. After all, if we are not doing this on your behalf, we are certain you will and that you may leave us! One of our primary goals is to create a long-term relationship with you as your trusted mortgage broker. We do not treat you as a once-off transaction!

Our efficient digital systems ensure that your mortgage is reviewed at least annually, ensuring that you are getting the best possible rate and terms that suit your needs.

Why AXTON Finance are Melbourne’s leading Mortgage Brokers

Unlike dealing directly with banks and online lenders, AXTON Finance is dedicated to working in your best interest. Our team of experienced mortgage brokers navigates the complex mortgage market on your behalf, identifying tailored structures and negotiating to secure lower interest rates and favourable terms.

We provide you with personalised attention, ensuring that your financial goals are understood and catered to effectively.

We build relationships – not transactions

While bank loyalty may have been a thing when 20th-century bank managers had authority, it’s now essential to recognise that in modern home and investment loans, blind loyalty to your bank might only sometimes serve your best interests. Regularly reviewing your mortgage and exploring better deals is indeed a smart financial move but getting experienced advice from the leading mortgage brokers at AXTON Finance will help ensure your best interests and not the banks are being served!

We know that your mortgage is not just a set-and-forget transaction but an evolving instrument that adapts to your changing financial needs. Don’t wait for your bank to offer you the best deal; take control of your financial future today. Contact AXTON Finance, Melbourne’s trusted mortgage brokers, and experience our personalised service, efficient systems, and dedicated team, who can help you secure a better mortgage approval.

What Self Employed Borrowers Need To Know

Posted on 05/05/202313/12/2023 by Clinton Waters

When it comes to applying for a low or alt doc home loan in Australia, it’s important to understand what lenders are looking for. While these types of loans can be a great option for those who don’t have completed self-employed tax returns or traditional income, the application process can be more rigorous than for a standard home loan. However, with the right preparation and understanding of what lenders are looking for, you can increase your chances of being approved.

Firstly, it’s important to understand what a low or alt doc home loan is. These types of loans are designed for borrowers who may not have the traditional income documentation required for a standard home loan, such as payslips or tax returns. They may be self-employed, have irregular income streams, or have a poor credit history. As a result, low doc loans typically require less documentation and have more flexible lending criteria than standard loans.

However, this flexibility does come with some additional requirements from the lender. Here are some of the key factors that Australian banks and lenders will consider when assessing your low or alt doc home loan application:

1. Income and assets
  While low doc loans don’t require the same level of income documentation as standard loans, lenders will still want to see evidence of your income and assets. This can include bank statements, tax returns, profit and loss statements, and any other documentation that shows your financial situation. Lenders will also consider any assets you have, such as property, shares, or savings, as this can help demonstrate your ability to repay the loan.
2. Credit history
  Your credit history will also be taken into account when applying for a low doc loan. Lenders will look at your credit report to assess your creditworthiness, including any missed or late payments, defaults, or bankruptcies. While a poor credit history won’t necessarily rule you out of a low doc loan, it may affect the interest rate you’re offered.
3. Loan-to-value ratio (LVR)
  The loan-to-value ratio (LVR) is the amount you want to borrow compared to the value of the property you’re purchasing. For low doc loans, lenders will typically require a lower LVR than for standard loans, as this helps mitigate the risk of lending to borrowers with less traditional income documentation. Most lenders will require an LVR of no more than 80%, which means you’ll need a deposit of at least 20%.
4. Loan purpose
  Lenders will also consider the purpose of your loan when assessing your application. While low doc loans can be used for a range of purposes, such as purchasing a home, refinancing an existing loan, or investing in property, lenders may have different lending criteria depending on the purpose of the loan. For example, if you’re using the loan to purchase an investment property, you may need to provide evidence of rental income or projected rental income to show that the property is a viable investment.
5. Security
  Finally, lenders will consider the security you’re offering for the loan. For low doc loans, the property you’re purchasing or refinancing will typically be used as security for the loan. Lenders will assess the value of the property and consider the location, condition, and any other factors that may affect its value. This helps ensure that the property is sufficient security for the loan, and that the lender can recover their money if you default on the loan.

Overall, applying for a low or alt doc home loan in Australia can be a more complex process than for a standard payg employee. However, by understanding what lenders are looking for, and ensuring you have all the necessary documentation, have a quality submission prepared by your broker and have evidence to support your application, you can increase your chances of being approved.

Speak to us today about your scenario and we will gladly tailor a solution that meets your exact needs.

Which Professionals Do You Need When Buying A Property?

Posted on 06/04/202322/04/2024 by Luke Rowland

Purchasing a property is one of the biggest financial decisions you will ever make, and at AXTON Finance we know the importance of having the right professionals by your side when embarking on your property journey.

There are several experts involved in the property buying journey, and each plays a vital role in ensuring that you make informed decisions and get the best result. These professionals will also be key to ensuring you receive the correct advice in the future.

Here are some of the important professionals to engage when purchasing a property:

Mortgage Broker: One of the first experts you should engage when purchasing a property is a mortgage broker. An experienced mortgage broker will help you secure the best possible mortgage by understanding your needs and unique situation to then compare various lenders and interest rates. They will also help you determine your borrowing capacity and assess your eligibility for government grants or incentives. By working with a mortgage broker, you can avoid costly mistakes, save a lot of time and money in the process. As one of Melbourne’s best mortgage brokers you will be hard-pressed to get a better professional in your corner. Book an obligation free chat with us today here or call on 1300 706 540.
Solicitor/Conveyancer: A solicitor or conveyancer is another crucial professional you need to engage when purchasing a property. These experts help you navigate through the legalities of the property-buying process. They can help you understand the terms of the sale contract, identify any legal issues, and ensure that you have a clear title to the property. They can also advise you on stamp duty, taxes, and other settlement legal obligations.
Buyers Advocate: Buyers advocates are professionals who work exclusively for the buyer NOT the vendor like real estate agents do. They help you find the right property based on your brief, negotiate the best price, and manage the entire property-buying process on your behalf. They have access to off-market properties, and they can help you avoid common property-buying mistakes. They can also provide you with independent advice on the property, its potential, and its value.
Accountant: An accountant is another important professional to engage when purchasing a property. They can help you understand the financial implications of buying a property, such as the tax obligations, ownership options, negative gearing benefits, depreciation, and expenses. They can also help you set up a structure to minimize your tax liability and advise you on any tax benefits or incentives available to you.
Financial Planner: A financial planner can help you assess the financial implications of buying a property on your overall financial plan. They can help you understand how property investment fits into your overall financial goals and advise you on the best ways to finance it. They can also help you structure your finances, assess your cash flow, assess the adequacy of your insurance protections and plan for your financial future.

So to help maximize the likelihood of a successful property transaction it is essential to surround yourself with the right professionals to guide you through your property-buying journey. Each of these professionals brings a unique set of skills and expertise to the table, and working together with you over time will not only ensure that you get the best result on the initial purchase but the best advice moving forward as you grow your wealth in the years to come.

Is Your Cheap Fixed Rate Mortgage Expiring?

Posted on 23/03/202302/05/2023 by Clinton Waters

The pandemic saw a torrent of ultra-low fixed interest rates set up for Australian homeowners and investors alike. However, many of these fixed loans are set to expire, and borrowers will face a sharp increase in their interest rates, which has been dubbed somewhat ominously by the Australian media as the “mortgage cliff.”

The expiry of these fixed rates over the coming months and years could cause significant financial stress for borrowers who are unprepared for the sudden increase in their mortgage payments. In some cases, monthly mortgage payments could double, putting a significant strain on an already elevated household budget.

Thankfully, there are some sound options available for those with fixed rates to mitigate the impact of the so-called cliff!

One of the most effective solutions is to pick up the phone and call your current lender to needle them to improve your rate. It is a well-known fact in the banking industry that it is cheaper to keep a current borrower than to seek out a new one so you might be surprised by what they may be able to offer you. Once you have done this you can compare the market yourself or use the services of a mortgage broker to assist you in comparing like-for-like options.
Failing a decent response from your current bank or lender, you can seek to refinance your home loan. This is best done by a professional mortgage broker, who will be experienced in comparing like-for-like products, policies and structures. Since interest rates started to rise in 2022 lenders have slowly increased the assessment criteria that may result in you being unable to refinance your current loan based on the revised stress-tested rates even though you are making repayments at a higher rate today! Further compounding this complexity is the fact that borrowers with higher LVR’s (Loan to Valuation Ratios) may have experienced a reduction in the value of their property which can make refinancing uneconomical. An experienced broker will help you clearly navigate the benefits and costs early on before you commit to any decision.
Switch your loan to interest only and/or extend the term. This really should be a last resort option because while your monthly repayments may drop considerably, the true long-term cost can add tens of thousands of dollars to the total cost over the life of your mortgage. Extreme caution needs to be applied when looking at this option and getting a professional broker in your corner to model out the effects is highly advisable.

By working with an experienced mortgage broker, like the team at AXTON Finance, we can help you understand the terms of your current loan, including any hidden fees or penalties that could impact the refinancing process. Will will have a high degree of confidence that your decision will be an informed one that one helps you avoid any costly mistakes.

The mortgage cliff is a looming challenge for borrowers with expiring ultra-cheap fixed home and investment loans. However, there are some simple solutions available, such as refinancing, that can help mitigate the impact of rising interest rates.

How To Get Approved When Refinancing Your Home Loan

Posted on 06/03/202322/04/2024 by Clinton Waters

With the rapid increase in interest rates in Australia and many people coming off ultra low interest rates there has been a cause for concern for many people looking to refinance their mortgages. With the onset of higher interest rates, lenders are substantially more cautious and selective when it comes to approving mortgage applications. We are even seeing many examples where people cannot refinance to a better rate because various lenders are applying higher assessment hurdles to a loan they are already servicing which is locking people into their home loans. However this may not need to be the case, there are a few clever but very simple ways to increase your chances of getting your refinance mortgage application approved. Here are some tips to help you get started:

Review your credit score

A higher credit score can increase your chances of getting approved for a mortgage, even if interest rates have risen. Review your credit report and make sure there are no errors that could negatively impact your score. If you have a lower score, consider working to improve it before applying for a mortgage. Being late on loan repayments, making too many credit applications, moving address regularly or having numerous consumer debts can all negatively affect your credit score.
Demonstrate a stable income

Lenders want to see that you have a stable income that can support your mortgage payments. This is especially important if interest rates have risen since you first took out your mortgage. Provide documentation of your income, including pay stubs, tax returns, and bank statements. Bonus income can also be used in many circumstances but policies vary considerably from lender to lender – best to speak to us about your option first.
Reduce your debts

Lenders look at your debt-to-income ratio, which is the amount of debt you have compared to your income. If you have a high debt-to-income ratio, it could be a red flag to lenders. Consider reducing your credit card limits or paying off some debts before applying for a mortgage. Reducing your credit card limit by just a few thousand dollars can have a fairly substantial effect on your loan. As of the time of publishing, most lenders want to see your debt-to-income ratio less than six times.
Shop around for lenders

Different lenders have different requirements and criteria for mortgage approvals. Shop around and compare rates and terms from multiple lenders to find the best fit for your financial situation. Of course the best way to do this is through the professional services offered by the team of experienced mortgage brokers at AXTON Finance.
Be prepared to provide additional documentation

Currently, banks and lenders are requesting additional documentation or information during the application process. Be prepared to provide this information in a timely manner to keep the process moving forward which will reduce the time it takes to ‘yes’ and for you to enjoy your lower rate.
Extend your loan term

This one can make your borrowing capacity higher but can make your mortgage ultimately a lot more expensive. So while you may be able to get a loan term of 35 or 40 years this can be very costly if you are already 10 years into a 30 year mortgage – tread with caution on this one but an experienced mortgage broker will be able to model out the pros and cons for you.

In summary, getting your refinance mortgage application approved despite rising interest rates requires some simple planning and preparation. With these tips in mind, you can increase your chances of getting approved for the refinance of your home or investment loan and secure a better interest rate.

Get in touch with one of the experienced team at AXTON Finance today to refinance to a better rate.

Call us today on 1300 706 540 or book a quick obligation-free mortgage review online here.