Stepping into 2025, it’s the perfect time to assess where you stand financially and make plans that align with your goals. Whether you’re thinking about upsizing, buying, selling, or refinancing, now is a good time to start preparing for the opportunities ahead. Here’s what you need to know as we head into 2025:
- Improved Borrowing Power:
With bank servicing/test rates decreasing, it may be easier for buyers to qualify for lending or secure larger loan amounts.
The increase in borrowing power could drive demand and push property prices higher. However, we’re expecting that Debt-to-Income (DTI) ratios will start to become a common part of property and financial discussions and potentially limit how much people can borrow.
If you’ve recently been turned down by a lender or found borrowing challenging, now is a great time to revisit your options, as it’s likely that the changing conditions may have improved your circumstances. - Market Opportunities:
Banks are competitive right now, we’re seeing attractive cash contributions, lower servicing/test rates, and lower fixed and floating rate options. As the year progresses, we’re expecting to see buyer demand increase so getting pre-approved early will give you an edge. This ensures you avoid any rush and can lead to more favorable outcomes. - Rate Considerations:
Navigating rate options – short-term vs long-term, floating vs fixed – can feel overwhelming. It’s important to think about the long-term structure of your loan rather than trying to time the lowest rate. Your Mortgage Supply Co Adviser will guide you in making informed decisions tailored to your individual circumstances and aligned with your goals. - The OCR and Your Mortgage:
With the next Official Cash Rate Announcement on 19th February 2025, many borrowers are opting to settle new loans on floating rates and lock in fixed rates later. The OCR currently sits at 4.25% and economists are predicting a 0.5% drop. It’s important to work with your Mortgage Supply Co Adviser to plan strategically around OCR changes. - The Property Market:
Moving into 2025, we’re expecting to see a modest recovery in the property market. CoreLogic are forecasting a 5% increase for property values nationwide. Lower interest rates are helping buyers and sellers but challenges like employment concerns, high listing volumes and debt-to-income (DTI) ratio rules will influence the pace of growth.
Click HERE to read our latest Property Market Insight, including the latest data across the country.
Top Tip for 2025:
Prepare early! Pre-Approvals remain essential. It not only shows your purchasing power but also gives you and the vendor confidence during the buying process.
Having your Mortgage Supply Co Adviser on your team, will make all the difference.
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