Amid the ongoing health crisis, mortgage brokers across Australia are urging home owners and investors to consider their credit options.
To alleviate worry amid economic uncertainties, interest rate cuts, mortgage relief packages and stimulus for small businesses were launched as some of the key initiatives in the wake of the coronavirus outbreak.
The coronavirus outbreak has seen the federal government commit to $189 billion in emergency stimulus to support the Australian economy, including more than $100 billion in emergency banking measures to support households and businesses through the economic fallout.
As lenders begin announcing assistance packages for Australian borrowers, Momentum Wealth’s team leader of finance, Caylum Merrick, encourages buyers to weigh up options to protect and strengthen their financial position.
“The economic environment in Australia is entering new unknowns as the impact of the coronavirus develops, and our priority as mortgage brokers is to ensure borrowers can introduce as much certainty as possible to their financial position to weather these changes and protect their financial wellbeing,” he said.
“We have already received an influx of enquiries from investors and are actively working with them to review their situations and identify any cash flow management strategies to protect and improve their financial positioning, including evaluating current repayment options, assessing the availability of offset accounts to store additional mortgage repayments and accessing available equity from their existing portfolio as an emergency cash buffer.”
The-based broker said recent rate cuts are also providing opportunities for some home owners and investors to review existing rates and reduce repayments.
Official cash rates dropped to a record low of 0.25 per cent on 19 March as the Reserve Bank of Australia announced an emergency rate cut in a bid to ensure continued availability of credit to businesses and households.
“These are some of the lowest rates we have seen in our history as brokers, so we’re working with a number of clients and their lenders to assess the potential to negotiate more favourable rates on existing loans, or in cases where this isn’t possible evaluating whether there could be benefits in refinancing to save money on repayments,” Mr Merrick said.
Moving forward, Emma Everett, chair of Momentum Wealth’s investment committee, said buyers and sellers should apply any decisions in the context of a longer term outlook.
While the impact of this is going to be short and sharp, based on previous trajectories recorded during events such as the GFC, the Australian economy will recover and property will show long-term resilience, according to her.
Sellers, in particular, are advised to avoid making any rushed decisions that could compromise their long-term property goals.
“A lot of buyers will undoubtedly be holding off on investment decisions, but certainly in the next six months we are expecting to see some great buying conditions as competition reduces, so those who do have high levels of income security could find themselves in a strong buying position,” Ms Everett concluded.