Home Values Are Falling: 3 Home Loan Moves That Could Make a Difference
Australian home values have entered a broader slowdown. Recent data shows falls across most capital-city suburbs, including Melbourne, as higher borrowing costs, reduced buyer demand and post-Budget investor uncertainty weigh on the market.
For homeowners, the important question is not simply, “What is my home worth today?” It is, “Is my lending still structured appropriately for today’s conditions?”
A softer market does not automatically mean you should refinance. It does mean there may be value in reviewing your loan before lower recent sales become more prominent in future lender valuations.
Use Lendcap's Free Home Loan
Value Calculator
Answer our Home Loan Value Checker and receive a FREE rate check guide. We will help you identify whether your LVR, rate or structure warrants a closer review.
1. Review whether your loan structure still fits
The loan that suited you two or three years ago may not be the best fit now. Your income, expenses, equity, fixed-rate position and goals may have changed, while lender policies and products have also moved.
A proper home-loan review should look beyond the headline interest rate.
It may consider:
whether the loan is split appropriately between fixed and variable rates;
whether an offset account is producing enough value to justify any package fee;
whether high-rate personal debts could be restructured responsibly;
whether the repayment frequency or loan setup suits current cash flow; and
whether a longer loan term is available and appropriate as a temporary cash-flow strategy.
Some Australian lenders may consider loan terms of up to 40 years for eligible borrowers. This can reduce the required monthly repayment, but it can also significantly increase the total interest paid if the debt remains outstanding for longer.
Illustration only On a $600,000 principal-and-interest loan at 6.00%, the repayment is approximately $3,597 a month over 30 years versus $3,301 over 40 years. The 40-year term reduces the required monthly payment by about $296, but total interest would be roughly $984,615 compared with $695,029, assuming the rate never changes and no extra repayments are made.
That is why a longer term should be assessed as part of a broader plan, not treated as free savings. The right solution might include retaining the ability to make extra repayments, using an offset account, or setting a future review date.
2. Consider whether now is the right time to test your property value
A lender’s valuation is not always the same as an agent’s appraisal or an online estimate. Depending on the application and property, a bank may use an automated model, desktop assessment or full valuation. Recent comparable sales can influence the result, so valuation evidence may respond to market movements with a lag.
If your property has risen in value since you took out the loan or you have paid down a meaningful amount of principal your loan-to-value ratio (LVR) may have improved. A lower LVR can matter because it may:
place you in a more competitive lender pricing tier;
strengthen a request for your existing bank to reprice the loan;
expand the refinance options available to you; or
help you understand how much usable equity may be available, subject to servicing and credit approval.
However, timing matters. If local comparable sales have recently weakened, waiting may affect the valuation outcome. Equally, ordering multiple valuations without a strategy can be unhelpful. A broker can first assess likely value ranges, current debt and the LVR thresholds that would make a genuine difference.
3. Compare the total value, not just the advertised rate
Competition between lenders changes constantly. In addition to rate discounts, some lenders may offer fee waivers, professional-package benefits, points or limited cashback incentives for eligible customers.
A cashback can be useful if it helps cover discharge, application, valuation or settlement costs—or offsets part of a monthly repayment. But the incentive should be assessed against the total cost and structure of the new loan.
Before changing lenders, compare:
the interest rate and comparison rate;
annual, package, offset and account fees;
cashback eligibility and clawback conditions;
fixed-rate break costs and discharge fees;
offset and redraw functionality; and
the projected cost over at least two to three years, not only the first month.
In some cases, the best result is not refinancing at all. An updated valuation and a well-supported pricing request may encourage your existing bank to offer a discount without the cost and effort of moving.
The practical next step: a Home Loan Value Check
Lendcap can review your current rate, loan structure, estimated property value, LVR and available lender options. We can then identify whether there is a credible case to reprice, restructure or refinance—or whether staying with your current lender remains the better decision.
Book a 15-minute Home Loan Value Check with Lendcap
Bring your latest loan statement, current interest rate, approximate property value and your main goal with lower repayments, better flexibility, debt reduction or access to equity.
General Advice Disclaimer
The information provided in this article is general in nature and does not take into account your personal objectives, financial situation, or needs. It should not be considered financial, tax, or legal advice. You should seek professional advice tailored to your individual circumstances before making any financial decisions.
To understand what options may be suitable for your situation, book a consultation with Lendcap today.
Comments