The Top 5 Home Financing Trends for 2023
Hey there, welcome to my blog! If you’re thinking of buying a home or refinancing your existing one in 2023, you might be wondering what the home financing trends are for this year. Well, you’re in luck, because I’ve done some research and compiled a list of the top 5 trends that you should know about. Let’s get started!
1. Digital lenders are simplifying the application process. Gone are the days of filling out endless forms and providing heaps of paperwork to get a home loan. Nowadays, you can apply online with a few clicks and get an instant decision from some digital lenders. These lenders also offer competitive rates, no fees, and loyalty discounts to attract and retain customers. One example of such a lender is Unloan, which gives you an extra 0.01% p.a. discount every year for up to 30 years.
2. Mortgage brokers are still in high demand. With so many home loan options and lenders in the market, it can be hard to find the best deal for your situation. That’s why many Australians rely on mortgage brokers to help them navigate the home loan landscape. Mortgage brokers can access a wide range of products, negotiate better terms with lenders, and save you time and money. According to the MFAA, more than two-thirds of new home loans in late 2022 were facilitated by a broker.
3. Home equity lending is on the rise. As property prices increase, so does the equity that homeowners have in their homes. This means that more people are tapping into their home equity to access funds for various purposes, such as renovations, debt consolidation, or investing. Home equity lending can take the form of a line of credit or a lump sum loan, depending on your needs and preferences. TransUnion predicts that home equity lending will grow by 24% in 2023 compared to 2022.
4. Fixed rates are becoming more popular. With interest rates expected to rise in 2023, many borrowers are opting for fixed rate home loans to lock in a low rate for a certain period of time. Fixed rate home loans offer certainty and stability for your repayments, as well as protection from rate hikes. However, they also come with some drawbacks, such as limited flexibility, break costs, and missing out on potential rate drops. The average 2-year fixed rate for owner occupiers in April 2023 was 5.93% p.a.
5. First-time buyers are getting more support from the government. Buying your first home can be challenging, especially with high prices and low supply in some areas. That’s why the government has introduced and extended some schemes to help first-time buyers get into the property market. These include HomeBuilder, which provides a grant of $25,000 for eligible new builds or renovations; and the first home buyer deposit scheme, which allows eligible buyers to purchase a property with as little as 5% deposit without paying lenders mortgage insurance.
So there you have it, the top 5 home financing trends for 2023. I hope you found this blog post helpful and informative. If you have any questions or comments, feel free to leave them below or contact me directly. And don’t forget to subscribe to my blog for more updates on all things home financing!
