Market Update: May 2023

Welcome to the Bernie Lewis Home Loans mortgage market update for May 2023. In this addition we talk about variable rates catching up to fixed rates, changes to the Home Guarantee Scheme, and staying cyber-secure during the lending process.

Variable rates have caught up to fixed rates

For the better part of the past year, if you hadn’t already locked in a low fixed rate for your home loan then you probably would have missed the boat. It was a sensible strategy to ride the variable rate wave, as this segment of the market was substantially cheaper than fixed, and comparably you were better off with the interest savings. As the RBA increased the Cash Rate month by month, subsequently lenders passed on the buck to us consumers and we are now in a market where variable and fixed are again placed fairly similarly.

It’s always easy looking in hindsight, but anyone predicting where interest rates would climb to was probably off the mark…including us! It seems like the RBA have positioned themselves to hike rates further, so maybe there should be some consideration toward short-term fixed rates. We are more than happy to help you with weighing up the positives and negatives of fixing in this market, or whether to continue to roll with variable for the time-being.

As refinance cash-back offers from lenders begin to withdraw from the market, the winter period could be an interesting time for the lending market and it may look drastically different leading into the back end of the year.

More inclusivity for the Home Guarantee Scheme

The federal government has recently announced it is expanding the eligibility criteria of the Home Guarantee Scheme. The Home Guarantee Scheme includes the First Home Guarantee, Regional First Home Buyer Guarantee, and Family Home Guarantee. Essentially these schemes involve the federal government acting as a guarantor on a loan, meaning eligible home buyers can purchase a home with a smaller deposit and no lender’s mortgage insurance payable.

For the First Home Guarantee & Regional First Home Buyer Guarantee, eligible home buyers will need a 5% deposit. Under the Family Home Guarantee, eligible home buyers will need a 2% deposit. It is important to note that the respective state fees and charges are payable on top of these minimum deposit amounts.

One of the more noteworthy changes relates to permanent residents of Australia, who now can access all 3 guarantees under the scheme, where previously it was restricted to Australian citizens.

The Scheme will also now allow friends, siblings, and other family members to jointly apply for the First Home Guarantee and Regional First Home Guarantee. Non-first home buyers who have not owned a property in the past 10 years will also have access.

The Family Home Guarantee too has become more inclusive. Previously, just single natural or adoptive parents with dependents were eligible. This has now been expanded to include single legal guardians of children, such as aunts, uncles, and grandparents.

There are 35,000 First Home Guarantees places made available every year, and now up until June 30, 2025, there will be an additional 10,000 places available per year for the Regional First Home Buyer Guarantee and 5,000 places available per year for the Family Home Guarantee.

Speak with us about eligibility criteria, we can check out if you will qualify and which lenders present well with the guarantees.

Cyber security in the increasingly digital finance world

As banks lean further into digital processes, and Australia continues to be targeted by cyber fraud, we all need to do our part to ensure you’re safely on-boarding with your chosen lender. Video meetings, digital fact finds, electronic file transfers, digital loan documents, e-signatures and electronic settlements;  whatever part of the process it may be, it is likely to be digital nowadays (or soon to be!).

We do our best to ensure our systems are protected, not only through the software we use, but the diligence we apply to our systems. Our CRM’s, emails, and software are protected by two-factor authentication and we consistently reset passwords. Whilst we endeavour to be secure, we can only control what we can control. As finance brokers, we are constantly bombarded with scam communications and have naturally become hyperaware of everything we receive or click into. We ask you to do the same, especially when on-boarding to a lender.

It can’t hurt to double check what sign-up requests or documents we have actually sent you by ourselves, or requested a lender to send you. The bare-minimum is to simply check the email address you have received something from, and if that looks suspicious, then it probably is something to tread cautiously with. We all hope to be the ones not duped online, or to be the ‘fake’ profile used to fish another person, but in reality we are all vulnerable in this space. If something doesn’t seem right, especially when it comes to money requests, then it’s best to simply give us a call to check.

Whilst it is somewhat ironic to now suggest clicking a hyperlink, please find more information that can assist you with staying protected at https://www.cyber.gov.au/protect-yourself/spotting-scams.