Mortgage deferrals, Property investors cashing in

As many parts of Australia have returned to lockdown over the past few weeks, lenders have offered home loan relief to borrowers who may have been affected.

Some borrowers may be eligible for deferrals on their mortgage repayments:

• All borrowers can apply for a mortgage pause, regardless of geography or industry
• Deferrals are being decided on a case-by-case basis
• Where deferrals are being granted, it’s on a month-by-month basis

The Australian Banking Association, which is made up of 22 of the country’s largest banks, including the big four banks, said banks are standing by their home loan customers.

“Customers can rest assured that if they need help, they will get it. Your bank will help you find a way through, don’t tough it out on your own.”

Are you affected by the lockdowns and with your mortgage? If so, it’s best to speak with your bank first.

New analysis from CoreLogic has found that buying a property is cheaper than renting for 36.3% of homes across Australia.

This is an improvement on the last time this analysis was conducted, in February 2020, when it was cheaper to buy than rent 33.9% of homes.

‘Cheaper to buy’ means it takes less money to meet ongoing mortgage repayments than ongoing rental payments. CoreLogic’s analysis assumed borrowers would put down a 20% deposit, take out a 25-year loan and pay a mortgage rate of 2.40%.

The national results hide a lot of geographical variation. For example, a majority of homes in regional locations are cheaper to buy (60.1%) but only a minority in metro locations (28.2%).

Of course, these are broad averages, so your personal situation might be different. If you want an expert to crunch the numbers on your behalf and see what impact a mortgage would have on your finance.

This is a great time to be a property investor, with tenants being forced to fight hard for rental properties.

The vacancy rate (the share of untenanted rental properties) fell in every capital city, except Melbourne, between June 2020 and June 2021.

The harder it is for tenants to find accommodation, the easier it is for landlords to raise rents.

With rents rising and interest rates at historic lows, this is a great time to be a property investor.

However, qualifying for a mortgage is often easier said than done, because banks have tight lending standards and turnaround times can be slow.