In light of the recent hike in interest rates stemming from successive increases in the RBA cash rate ascribable to the pandemic, coupled with rising costs of fund, we have been approached by numerous clients seeking our expertise and assistance in addressing a challenging situation. This predicament involves their monthly mortgage obligations exceeding the rental income generated by their investment properties. During a recent strategy session with one such client, they shared the intricate financial obstacles they were facing and expressed their desire to collaborate in finding a viable solution. Recognising the urgency of relieving their financial burden, we promptly initiated the process of devising effective strategies to support them.
In the competitive landscape of the market, it is commonly observed that the best interest rates are often offered exclusively to new customers as an incentive to attract their business. However, we encountered a significant challenge when it came to convincing the lender of the value in providing our clients with a rate discount, particularly during a time when the costs of acquiring funds were on the rise. Our task was twofold: determining the optimal extent to lower the rate and devising a strategy to extend these reduced rates to our existing clients, all while ensuring the lender's financial stability remained intact.
To tackle this challenge, our team at Yarra Capital implemented a comprehensive solution that prioritized assisting our customers in securing improved interest rates on their existing loans. We embarked on a diligent effort to present their appeal to the lender, highlighting their exceptional track record of consistent and timely repayments. By underscoring their long-standing commitment to sound financial practices.
We secured an impressive deal through adept negotiation and mutual fee compromise. In this arrangement, the lender has agreed to lower the interest rate with minimal associated costs payable by the borrowers. This deliberate approach led to a significant rate adjustment, reducing the initial rate by 3.62%, which translates to remarkable monthly savings of around $720 on their mortgage payments.
Our clients were delighted with the offer we presented because the savings from this strategic rate reduction would offset the costs in just four monthly repayments. They readily paid the premium to the lender in order to secure the discount.
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