resi mortgage corporation pty limited ABN 61 092 564 415
Level 3, 458 Wattle Street, Ultimo NSW 2007
Tel 02 9280 0007 Fax 02 9280 0009 E-mail save@resi.com.au PO Box 12 Broadway, NSW 2007
MEDIA RELEASE
FEBRUARY 3, 2009
SAVVY BORROWERS EXPECTED TO TAKE FURTHER ADVANTAGE
FROM LATEST ROUND OF RATE CUTS
Resi Mortgage Corporation says after today’s official rate cut of one percent delivered
another significant saving to Australian mortgage holders, savvy borrowers will now be
able to exercise a greater range of options in relation to getting the most from their home
loan.
Resi’s Head of Consumer Advocacy, Lisa Montgomery, says it’s clearly now a borrower’s
market and today’s large reduction in official interest rates will certainly deliver more
flexibility back to the consumer.
She says: “This latest cut means a borrower is potentially $744 per month better off since
August last year, based on a $300,000 average standard variable loan taken out over 25
years* - so canny borrowers will be really doing their homework to see how they can take
further advantage of this.”
Montgomery says there are several simple loan strategies all borrowers can consider
during this period to allow them to take advantage of the downward trend in rates:
1.
Keep your mortgage repayments at their August 2008 level. If your loan
structure allows for it you can choose to keep your repayments at the old level,
thereby taking advantage of the lower current interest rate by paying down more
principal and saving interest over the life of the loan, allowing you to pay out your
loan earlier.
2.
Reduce high interest debt. Most credit cards and personal loans haven’t
experienced the same reductions in interest rate over the past six months and are
costing consumers significantly every month. It makes sense to reduce or pay
these off completely with any surplus gained from a mortgage rate reduction.
3.
Create a buffer for unexpected events. Rate cuts should be used to pay off any
outstanding credit still left over from when rates were higher. By keeping your
mortgage as your only key credit obligation, other money can be put aside and kept
as a buffer for unexpected events such as job loss.
4.
Pay for renovations to your property in cash. With the savings gained from
interest rate cuts, you can continue your repayments and save the extra cash to
carry out major or minor work to your property, rather than having to draw down
extra funds. This will add value to your property without adding to your mortgage.
5.
Refinance. By speaking to your lender you will be better able to determine if there
is now a more appropriate loan for your circumstances. With such a large drop in
rates over the last six months, even when break costs are factored in, it could still
be in your best interest to switch loans or lenders. But ensure firstly that you shop
around.
resi mortgage corporation pty limited ABN 61 092 564 415
Level 3, 458 Wattle Street, Ultimo NSW 2007
Tel 02 9280 0007 Fax 02 9280 0009 E-mail save@resi.com.au PO Box 12 Broadway, NSW 2007
-2-
”Whether borrowers decide to reorganise their cash-flow, restructure their existing loan or
completely refinance, the time to act has never been better and will significantly improve
their financial footing over the long term,” Montgomery added.
ENDS
Media Contact:
Lisa Montgomery, Head of Consumer Advocacy,
RESI Mortgage Corporation: (02) 8204 5012 or 0414 592 553
Karen Bristow - Kardan Consulting: 02 9967 3245
*
Figures quoted are the savings on principal and interest and are based on the average bank
standard variable rate in August 2008, assuming the latest full 100 basis point cut is passed
onto borrowers.
NEWS 
