Here’s what Inspire’s mortgage broker, Colin O’Loughlin ran us through on a recent webinar -
Right before we jumped on this webinar I checked one of the recent bank’s offers, and it was at a two-year fixed rate of 2.09% - which is absolutely incredible.
Compared to what you’re paying at the moment, that might be a huge difference - take for example a 1% interest rate saving, on a $500,000 loan. That's five grand a year in interest savings each year - that's cash back in your pocket.
The cash back rebates of up to $4,000
I think everyone can imagine how much an extra $4,000 in their pockets would come in handy right now. Generally speaking, we're looking at when a client with a variable rate loan is looking to pick up and move to one of these lenders that are offering the cash back rebate.
Just consider your costs to move though - I would say that your total discharge costs (including government fees) will range anywhere between $700 and $800. This means, out of the $4,000, you're actually only going to hold onto anywhere between $3,200 and $3,300 in your pocket. The charges can vary bank to bank, and are based on your personal circumstances.
Depending on how much your loan amount is, the rebate can be potentially 1 to 2 month's worth of payments that you've stored away and could pay during this tough time.
There are a few lenders that are doing it and are ranging from $2,000 to $4,000. There's some that are still doing different sets of points on credit cards, if that's what you’re after too.
Whenever we're going through this process, it's not a matter of, “Hey, we're going to get you $3,200 and then we refinance you on a worse rate”. As mortgage brokers, we have a duty of care to go through how things look like for you right now, what interest that you're paying, and we want to make sure that we're getting you into a better situation.
So, the $4,000 is absolutely amazing, but the end goal is actually, “Hey, guess what? You're on 3%, and we're going to give you a rate of 2.09%.” That's the real pickup, because that's the interest saver and it compounds year, after year, after year.