With fears interest rates are going to remain higher for longer, one family faced being trapped in mortgage prison for a bizarre reason.
As the interest rate soared, Mr Davies said it was disheartening as it felt like the couple’s monthly mortgage repayments were making no dent on their loan. “I was a little bit devastated. I thought maybe our property isn’t worth as much and I didn’t understand and thought it was just the way it was,” he said.
Yet, a third valuation from Commonwealth Bank came in at $525,000 and the couple were “surprisingly” able to refinance with a big four bank at an interest rate of 6.38 per cent and with no need to pay LMI.Mr Davies’ experience saw a staggering $74,000 difference in property valuations between three banks and he thinks greater transparency is needed, particularly as the issue can cost people thousands more in repayments.