For decades now, people have been applying for financial support from banks and lenders when buying their first homes. A lot has changed since the early days of these types of services; so much so that a person that received a loan 30 years ago could be facing completely different terms than one that got approved yesterday.
But why is this?
At Tundra Mortgage Brokers, we might provide competitive home loan solutions, but that’s only half of our story. Behind the scenes we pride ourselves on being able to offer mortgage advice on interest rates and more. We have learnt a thing or two about the mortgage application process and what we’re about to tell you might come as no surprise, or be a huge one.
Banks are possibly the only ‘immortal’ businesses in the world
We’ve all heard of big brands like Nike, Virgin and BHP Billiton, but compared to lending agencies, even these global giants are newbies. Lenders have been around for centuries and if they could claim one factor as being the reason for this, it’s their ability to change and modify to reflect the market. There are some things in life that people will always need; food, water, oxygen and money to live.
Lenders provide the latter, but as money can be used to purchase food and water, they actually offer some of the most highly sought-after services imaginable. But where do mortgages come into things? Well, 30 years ago a bank in Australia might have charged completely different fees than they do right now and when you understand why, everything should make sense.
These days cities like Melbourne are rapidly evolving and becoming market leaders. 30 years ago they were almost unheard of in the wide world. Australia’s import and export deals were fairly minimal, so it wasn’t uncommon for the country to demand more from its inhabitants in order to compete with other players around the world.
In the 1990s, interest rates on an average mortgage in Melbourne were wait for it… almost 20%! Sure the cost of properties was lower, but at the end of the day 20% interest per month on any borrowed amount could be deemed extortionate.
How have things changed?
Nowadays, Australia is as much a part of the global market as other parts of the world. This means that our beautiful country will typically receive cash from all over the place and as a result, banks aren’t as responsible for covering the costs and their customers can receive cheaper rates than ever before. In 2017, the interest rate on home loans in general, from major banks or housing finance companies range from 3% to 5% – and in the above scenario can make a huge difference.
Credit Representative Number 496186 is authorised under Australian Credit License Number 389328
Disclaimer -This page/article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.