Home loan customers increasingly satisfied

75It’s no secret that the Sydney property market is a hotspot for investors at the moment.

Homeowners are benefiting too. With many seeing their home equity increasing, they are able to utilise this to take out a second loan for an investment property or holiday house.

More growth, more positivity

Sydney was one of the core cities driving capital growth in 2013, according to research released by RP Data on January 2.

Other commentators have predicted that this trend will continue into 2014. A report from Fitch Ratings, released on January 21, noted that house prices in Sydney are set to rise this year, alongside those in Perth and Melbourne.

By contrast, house prices in other Australian cities for 2014 may remain flat, according to Fitch.

With these soaring Sydney trends comes positivity from homebuyers, too.

Banks’ personal customers are showing significantly high satisfaction levels (81.5 per cent in December), according to a January 22 Roy Morgan report.

The report considers what could drive this positivity and with regards to the Big Four banks – and their improving ratings – decreasing interest rates are thought to be a key cause.

“The eight interest rate reductions in home loans over the last two years are continuing to have a very positive impact on the satisfaction of home loan customers,” noted Roy Morgan Research Industry Communications Director Norman Morris.

Mr Morris pointed out that bank fees, product offerings and the level of customer service also affect customers’ satisfaction with their bank, alongside dropping interest rates.

Making the most of low interest rates

For homebuyers and investors alike, a smart strategy to reap the rewards of decreasing home loan rates is to take out a split-loan.

This puts a proportion of the loan on a fixed rate and the remainder of it on a variable rate, enabling the mortgagee to benefit from drops in interest rates on part of their loan.

With a booming property market, low interest rates and careful planning, Sydney investors and homeowners are well-placed for 2014.

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