Is the key to saving a home deposit as simple as giving up smashed avo toast for breakfast? Well not quite, but spending less does make a difference. On top of a budget, a savings plan and strategies such as a high-interest savings account, an effective way to save is to reduce or eliminate expenses. Start by understanding your spend It can be easy to lose track of how you’re spending money, especially due to cashless payments and credit cards. Many online banking systems include tools to categorise debits and make a budget – take advantage of them. Or download an app that helps you track your personal expenses on the go, like ASIC’s TrackMySPEND. Find savings in the essentials Some costs can’t be avoided – but many everyday expenses can be reduced. For example you could:
Make sure you’re paying off debts or credit cards completely each month or as much as possible, to avoid the added expense of paying interest. Reduce common overspending If you spend excessively on things like buying clothes, going out or expensive hobbies, it may be unrealistic to cut the expense entirely. Set a weekly or monthly limit and reduce that limit over time. A survey of more than 1000 Australians showed that 73 per cent have a problem with overspending. In particular, people tend to go overboard Christmas rolls around. To reduce gift expenses, be like Santa: make a list (and a budget). Buy only planned items within your allocated budget – then stop! Ask your family for support; it’s easier to put a cap on gift values if everyone else does too. Another common way Aussies overspend is on holidays. CommBank research has shown that a third of holidaymakers spent more on their trip than planned. Do your research and set a daily budget. Costs that could be eliminated Look for opportunities to eliminate costs. Cancel unused services. Update your internet or mobile plans if you’re always paying for excess data. Ask yourself: are you really using that gym membership? Are you getting value from your subscriptions? Remember, every wasted dollar is money you could be spending on your own home. edit. Friends, throwing the box wide open this morning, and calling a spade a spade, and on an important matter which a number of clients have emailed me about over the weekend. There was an article published over the weekend by all the major publications, titled "If you have extra money in your mortgage, get it out now!" which has created a little panic, and unnecessarily so.... I want to put your mind at ease, and let you know, you can save the panic for more important things of impending emergency, such as being chased by a shark, or a lack of coffee in the cupboard, either of these qualify for hitting the emergency button. This kind of publication is scare mongering, putting the wind up people like the revelation is something new and imminent, which it really is not. To be clear, all contracts disclose that the bank can make changes to the limit, and repayment, and due dates of repayments, etc etc, to ensure that they comply with the contacted term, and there is not an impending and imminent cancellation of your savings sitting in your home loan or your offset account about to occur that is going to effect every home buyer in the country. In fact, if a bank wanted to, they could sweep funds from any account that you have with them, and dump it into your loan if the loan is out of order, and the current status and the bank failing to take action would mean they failed to keep their contractual obligations, and you had failed to meet yours! This, is not anything new either, and has been happening for well over 30 years. It is not something that occurs very often at all however, as it is not something the banks like to do.... really bad PR! But, if you were at risk of foreclosure on your home, and the bank could see that they could help you protect your home with savings you had sitting in another account, they will try to protect you from yourself, if you hadn't used the funds already to avoid that foreclosure. My advice? Let it go, it’s always been like this, and there is no point to this article other than to create panic. And, if you want to talk about it further with me, to discuss risk mitigation, call me, let's discuss, or even better, let's discuss over coffee, because coming to the realisation that there is no concern is even better with coffee, refer paragraph 2! New year, same official interest rate.
The holiday is over. Or is it? Mortgage holders can continue to relish record low interest rates – the longest in history – as the Reserve Bank of Australia voted to keep the cash rate on hold. It has remained at 1.50% since August 2016. Looking back at the last quarter of 2017, there is great news for first home buyers, owner-occupiers and local investors. Economists say that, with foreign buyers pulling out of the Australian housing market, more locals looking for a home or investment are set to increase their share in the market. NAB Chief Economist Alan Oster says first home-buyers are entering into the market at the highest levels since 2011, making up 18% of new owner-occupier loans. He also reports that “sentiment towards Australia's housing market remained at above-average levels in the fourth quarter of 2017” – a positive sign for 2018. Time to refinance? Experts point out that, while interest rates are expected to stay on hold for a while, they will eventually rise. That’s why many think now is the perfect time to look at refinancing. There are currently a number of lenders offering variable rates below 4%. Refinancing now can help you get ahead on your mortgage repayments, saving you thousands in the long run. If you’re interested in reviewing your options, as usual, we are always here to help. Until next month, Rachael and the Team @ Get Smart Financial. Here's the thing about finance.... it can be really serious, and we know it.
Very often our clients are making really big, perhaps life changing decisions, and are entrusting us with the responsibility of guiding them through what can be an absolute maze of finance solutions, policies, rates, and outcomes, towards the bigger picture, and we never take this lightly. What it does not mean however, is that it can't be fun! As serious as finance is, it is also terribly exciting and such an honour to be entrusted with being a valued and relied upon member of a client's team! And given the journey that we take with our clients, we often get to know then quite well, as they do us, so as to enjoy the ride.... kind like being stuck on the rollercoaster with someone you know nothing about, taking those twists and turns, and ultimately celebrating the success of the ride can be a little awkward, so we do take the time to know who's riding with us! Life is like that sometimes, so let's try to keep it fun shall we?!? The last couple of weeks have been like that! The run up to Christmas is always like the uphill climb on that rollercoaster, and in a week's time, it will be like the rush down the other side with Christmas being the final destination. Amongst the mix however, and to add to the excitement, the team and I have had a little (LOT) of recognition for all the hard work and investment we make into our client's dreams and goals, which has been in the form of a very special award at our National Conference just a week or so back. You see, our clients and referral partners know how hard we work, how serious we take our mission, but also how much we love and enjoy our passion, and the last year has seen our growth, commitment and passion recognised at a National Level at the Choice Aggregation 20th Anniversary National Conference on the Gold Coast. So much of our work comes from our existing clients talking about how awesome we are, as well as our referral partners relying on us to hold the hand of their valued clients in supporting their visions. As always, a girl just couldn't do it without her team... Ally, Kylie, Ave, Julie, Nat, and Phil... not to mention my parents (doesn't matter how old you are, if the sentence starts with your name, you know you are in trouble!), children, friends, clients, business and referral partners and support team in general who support me both professionally and personally (girl, you seriously need to get more sleep!)... 2017 has been a success! Bring on 2018, it's going to be grand! December is always so very frantic, and whilst so very busy and celebrating all that the year past has been, it can also be a little stressful upon reflection of our goals and resolutions.... Want to know how the team and I manage this part of the year and what it means to us, and you? We'd love to know what you think! Rachael and the team - Stop the chaos and take control ;) Happy Monday!
An interesting little read to consider, in an environment where there is a lot more uncertainly of late around interest rates, and protecting ourselves against any potential increases.... the question is however, are you actively considering how you would manage in a higher interest rate environment, and what impact this could have to your cash flow and lifestyle? Not sure how you should manage, or where to start? Ask an expert, we are happy to help! http://www.realestate.com.au/news/how-to-prepare-yourself-for-an-interest-rate-rise/ In recent weeks, we have been fortunate enough to have been recognised for not only the hard work that we put in, but more importantly some of the great results we continue to achieve alongside our clients, in being privileged to be part of their finance and wealth creation team.
Pretty cool really, to get to play hair and makeup for a day, and spend lots of sharing and talking (who me, who would have known! ;) ) about the things that the team and I are really passionate about, being achieving great finance results for our clients, not only now but for the journey; from a holistic perspective, and making sure that we are working with the right banks, financial planners, accountants, real estate agents, property management teams and development companies... you just have to have your team sorted! Much thanks to the film crew team at 6 Black Pens who were such a delight to work with, who we look forward to working with again soon, and the ever professional and inspiring Stasi from Hocking Stuart Doncaster for his gracious contribution. Intrigued? Hold tight, we will be sure to share more in coming weeks, and are excited to have you along as part of our team.
So every month, the Reserve Bank Of Australia meets, and reviews the official cash rate, which in turn, effects us all, in our home loan interest rates, savings account returns and our projections as to how hard we can make our money work in moving forward. But, what are the factors that the Reserve Bank considers in making such decisions? Want to understand more? Read on :) Media ReleaseStatement by Glenn Stevens, Governor:
Monetary Policy DecisionNumber2016-16 Date7 June 2016At its meeting today, the Board decided to leave the cash rate unchanged at 1.75 per cent. The global economy is continuing to grow, at a lower than average pace. Several advanced economies have recorded improved conditions over the past year, but conditions have become more difficult for a number of emerging market economies. China's growth rate moderated further in the first part of the year, though recent actions by Chinese policymakers are supporting the near-term outlook. Commodity prices are above recent lows, but this follows very substantial declines over the past couple of years. Australia's terms of trade remain much lower than they had been in recent years. In financial markets, conditions have generally been calmer for the past several months following the period of volatility early in the year. Attention is now turning to some particular event risks. Funding costs for high-quality borrowers remain very low and, globally, monetary policy remains remarkably accommodative. In Australia, recent data suggest overall growth is continuing, despite a very large decline in business investment. Other areas of domestic demand, as well as exports, have been expanding at a pace at or above trend. Labour market indicators have been more mixed of late, but are consistent with continued expansion of employment in the near term. Inflation has been quite low. Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time. Low interest rates have been supporting domestic demand and the lower exchange rate overall is helping the traded sector. Over the past year, growth in credit to businesses has picked up, even as that to households has moderated a little. These factors are all assisting the economy to make the necessary economic adjustments, though an appreciating exchange rate could complicate this. Indications are that the effects of supervisory measures have strengthened lending standards in the housing market. Separately, a number of lenders are also taking a more cautious attitude to lending in certain segments. Dwelling prices have begun to rise again recently. But considerable supply of apartments is scheduled to come on stream over the next couple of years, particularly in the eastern capital cities. Taking account of the available information, and having eased monetary policy at its May meeting, the Board judged that holding the stance of policy unchanged at this meeting would be consistent with sustainable growth in the economy and inflation returning to target over time. Much thanks to the RBA for the article: http://www.rba.gov.au/media-releases/2016/mr-16-16.html As many are you are aware, nearly all of the banks have now passed on interest rate reductions following the Reserve Bank's decision to cut interest rates by 0.25% at the last review of the official cash rate, but not all of them have passed on the full cash rate reduction.
At Get Smart, our team are in the process of reviewing all of our client loans, to make sure that their home loans are running as efficiently as possible, and making sure that we have negotiated the lowest possible rate with each provider for each and every client. At Get Smart, it's personal, and we know it's our job to make sure we are crossing the T's and dotting the I's so you can get on with what you do best while we do the same... After all, I'm never going to be able to rewire an electrical box, and quite frankly, we don't expect you have the time to chase the banks... so we do the hard work for you. Not getting the Get Smart treatment with your existing provider? It happens, give us a call, and we will happily point you in the right direction and provide you a free and current home loan health check. At Get Smart, we want to help you keep control of your home loan repayments rather than them controlling you with the best loan options and advice. You have the power and we have the knowledge to ensure you have the best rate and home loan to suit your needs. Feel free to give us a call to discuss further. For the home owner we still have variable rates at 3.79%, and fixed rates from 3.69% For the Investor, we have variable rates from 4.09%, and fixed rates from 3.79% Want to understand more? Call us :) Interestingly in a time when we are seeing interest rates heading closer and closer by the day to 3.50%, more and more people are getting in touch to understand what it is going to take to get into the property market, and seeking guidance and support to help them get there faster... completely understandable, home loan interest rates have never been historically lower!
But, what does it really take and what are the key elements that need to be covered off? What if you don't have a deposit, is there another solution, or what if you are renting and the money you would have saved, is going into sustaining the current home? Is your income enough, do your existing debts demonstrate ability to manage your cash flow, or do they hinder your borrowing ability? At Get Smart, we know that every person is different, and so are their banking and finance needs. Further, nearly every different bank has a different policy and pricing structure, so in nearly every instance, we have a solution to match that clients needs. So, how can we help you, and what do you need? Get in touch, we'd love to help! Looking to enter the property market and worried about how you’re going to secure your first home loan? It’s time to start making your money work for you so you can land that loan. Qualifying for a home loan isn’t always an easy path. Aggressive interest rates, competition in the market and less than rigorous saving habits can often push people out of the property game completely – but it shouldn’t. Saving enough money for a sufficient deposit is possible with the right guidance and plenty of diligence. Budget, budget, budget! It goes without saying that creating an airtight budget – and sticking to it – is key when you’re looking to save money for a home loan. If you’ve done your homework or met with a mortgage broker, you’ll know that the minimum deposit you’ll need is likely to be a minimum of twenty per cent of the total cost of your home. Saving for the deposit is an important step but you should factor in other upfront costs that come with buying a property. Stamp duty, conveyancing, title search and registration fees, building inspections and insurance are all associated costs that will need to be covered. With the mean house price in Australia sitting over $600,000 you might have to save over $100,000 to cover the deposit and costs. As daunting as it may seem, saving to buy a home is possible if you budget. Filtering a percentage of your salary into a high-interest savings account can be a smart first step and can grow into a sizeable amount more quickly than you think. But whatever you do, avoid dipping into that savings account at all costs. Assess your debt Along with mastering a budget, paying off your debts is a practical step towards building that deposit. Whether it’s a credit card, a car loan or student loan, getting rid of any debt hanging over your head not only saves you money in the long run, it will help make your financial standing more appealing to a mortgage broker and lender. However, it’s important to remember that eliminating debt is not a quick fix – it takes time and patience, and even a few years to complete. Luxuries be gone ‘Work hard now, have fun later’ will become your new mantra when securing a home loan. Being able to save enough money for a deposit means cutting down on life’s unnecessary luxuries. Saying goodbye to dining out, takeaway coffee, $10 sandwiches for lunch and cable TV for the next few years can save you hundreds and even thousands of dollars. If you’ve been living under the guise of having a high disposable income, the time to curb your spending is now. Living within your means is about questioning your wants and needs: Do you really need that pricey leather couch or would you prefer to have a house to put it in first? Lenders Mortgage Insurance Saving for a deposit can be a huge undertaking, especially as the median house price continues to increase. With Lenders Mortgage Insurance (LMI), borrowers are able to purchase a property with a smaller deposit. You may be able to get a loan with a deposit as little as 5% of the property’s purchase price. There is a premium fee associated with LMI, but it can be paid upfront or over the term of the loan. It’s a good idea to speak to your broker if you are considering LMI. Saving money for a home loan deposit is one of the biggest and best decisions you’ll make and will certainly pay off in the long run. Making financial sacrifices now will reap very pleasing rewards and potentially set you up for life. Get in Contact today about your home loan options. Got $10? You too could turn it into $20,000!
Interesting piece by the peeps at newscorp last week, highlighting that while many had a little flutter on the races, what that same investment might mean to your personal finances and how big a difference it could make.... $10 a week isn't much in the scheme of things, but the article highlights that this amount could shave 17 months off an average home loan, or nearly $20,000, or what else one could achieve with what may just be spare change every week... Got a minute to spare? Have a little read, big things start from humble beginnings! http://www.news.com.au/finance/money/sure-bet-on-your-finances/story-e6frfmdr-1227591091103
As many are you are aware, all the majors have lifted their variable interest rates late last week. In summation of the majors, Westpac have moved by 0.20%, CBA by 0.15% and NAB 0.17%, but there are still other great rates options available. At Get Smart, we help you keep control of your home loan repayments rather than them controlling you with the best loan options and advice. You have the power and we have the knowledge to ensure you have the best rate and home loan to suit your needs. Feel free to give us a call to discuss further. For the home owner we still have variable rates at 3.99%, and 3 year fixed rates from 3.94%. For the Investor, we have variable rates from 4.18%, and 3 year fixed rates from 3.94%. Want to understand more? Call us :) Melburnians are being stung by record-high rent, with landlords in a dozen suburbs jacking up rental prices by more than 10 per cent over the past year. House rents have risen the fastest in Box Hill South, where the median asking price jumped 22 per cent to $500 a week, Domain Group data shows. Large increases have also been seen in Middle Park, Mordialloc and Templestowe, where, on average, investors raised rents by more than 13 per cent. Jo Worrell, of Greg Hocking Albert Park, said the strong demand for houses in Middle Park was largely driven by sought-after schools such as Albert Park College. “[Families] are often coming back from overseas and they want to be in the school zones, or they’re renovating in the area and they just cannot leave 3206,” she said. “That’s why houses are so popular – because of the family area – and they literally just don’t want to move from that area because it’s just a little bubble.” Ms Worrell said she leased a lot of houses, priced between $1200 to $2000 a week, off-market because there was always a list of families waiting and not enough supply. She expects demand to increase in the lead up to the end of the year and the new school year. Houses Rent* 1 year Box Hill South $500 22.0% Middle Park $770 15.8% Mordialloc $470 14.6% Templestowe $580 13.7% Caulfield North $678 12.8% Maidstone $420 10.5% Doncaster East $495 10.0% Bentleigh $550 10.0% Flemington $495 10.0% Frankston South $420 9.9% Domain Group senior economist Andrew Wilson said the suburbs where rents had risen the most were also popular with buyers. “We’ve seen prices growing in these areas quite strongly, and it is in that ‘hot band’ in Melbourne,” he said. “Box Hill South is one of those areas where those who are perhaps priced out of Hawthorn, Kew and Camberwell look over Warrigal Road. “Middle Park is prestigious, and I think affordability is driving Mordialloc as a part of the strength of the southern bayside suburbs.” The biggest jump in unit rents was in Altona North, where the median asking price climbed 28.1 per cent to $365 a week. Tenants in MacLeod, Middle Park, Thomastown and Brighton also saw some of the biggest leaps in median asking rents over the past year. Where rents have risen the most over the past year: Units Rent* 1 year Altona North $365 28.1% Macleod $250 25.0% Middle Park $448 13.2% Thomastown $315 9.8% Brighton $548 9.4% Parkdale $350 9.4% Malvern $410 9.3% Toorak $440 8.6% Templestowe $385 7.8% Parkville $420 7.7% * Median weekly asking rent Source: Dr Andrew Wilson, Domain Group Elizabeth Lopez, of Biggin and Scott Brighton, said dated 60s and 70s villa units were struggling because they were competing against many new apartments in the area.She said anything “modern and nice” was leasing fairly well, but not quickly because of the sheer volume. “Blocks of them are becoming available all at the one time because they all settle at the one time,” Ms Lopez said. “There’s not enough demand to soak all of them up, so sometimes the people who have bought those apartments have to perhaps be realistic with their rents. “Get a tenant in there and in 12 months’ time reassess the rent, you don’t want them sitting there vacant.” Large leaps in the median weekly asking rent could also reflect a larger mix of new apartments available for rent, she said. Much thanks to Christina Zhou at Domain for this great piece from 19.10.15! So you have heard lots about Offset Accounts, but still a little confuddled? Read on, you'll have it right in your mind in no time!
"If you’re looking to shave years and thousands of dollars off your home loan, you might want to consider a mortgage offset account. It’s an account that offsets the balance in that account against the balance of your home loan. This means you pay less interest on your home loan. Over time these savings can really add up and also reduce the time it takes to pay off your loan. For example, if you have a home loan balance of $200,000 and have $10,000 in your offset account you’ll only pay interest on a home loan balance of $190,000. Because home loan interest is calculated daily, if your offset account offers you 100% offset, every single cent in your offset account can reduce your home loan interest, every single day. What to consider in an offset account Not all offset accounts are the same, so it pays to check the details. Depending on the type of loan you choose, you might want to consider a full or partial offset. A full offset means that 100% of the funds in your offset account will be deducted from what you owe on your home loan before interest is calculated. A partial offset gives you a reduced interest rate on the part of your home loan equal to the balance of your offset account. And while your money is working hard to reduce the interest you pay, your offset account will also be every bit as accessible as an everyday transaction account. How many offset accounts can you have per home loan? By having multiple offset accounts linked to your home loan, you can manage your finances however you choose while still benefiting from the interest saved by every single cent in your offset accounts. It’s a great way to save for a big spend such as a holiday, a new car, or even another property if you are thinking of investing. Is an offset account only available with certain types of loans? Check if your loan is eligible for an offset account by contacting your financial institution. The type of loan may have an impact on the type of offset account available to you (e.g. whether it offers full or partial offset). Fixed loans generally have more limited options in terms of offset accounts, although at the end of the fixed period you may have the option of 100% offset. Who is an offset account best-suited to? If you are unable to make additional or lump sum repayments on your home loan, an offset account can give you the benefits of interest-reduction while ensuring your funds are still accessible. This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. You have questions, we have answers - Rachael. Truth or Myth: I should apply for credit, to build my credit report?Several times a week, we seem to find ourselves discussing what a Credit Report is with our clients, and how important the contents of each and every one of our reports is to our financial future. Surprisingly, many of our clients, have little to no understanding of what the report is, how to find out what the contents of our individual reports contain, and what the potential implications are of the contents to what we wish to achieve financially.
On many more occasions than I can remember, I recall clients stating that they have taken a personal loan, and a couple of credit cards, so they can start building a credit history, and be able to demonstrate a repayment history, so when they want to achieve what is really important, they have set a precedence of ability to manage their money and debt repayments. Question is, is this an informed decision, and does such action actually achieve the outcome desired? Truth is, it does not, and sometimes, it can actually undermine the bigger goal. While our Credit Report, now known as Veda Report, contains basic information about our name, address, date of birth, and where we work, it also contains valuable historical financial data, which can have a huge impact on our financial future. At Get Smart, we want our clients to be informed as to their options, but also to have a greater understanding and feel empowered, and have greater control of where you want to go and what you want to achieve in the future, and this is why part of our service is to educate our clients about taking financial control, and learning what you can do to get to where you want to go faster. We provide our clients constructive feedback, direction and guidance where needed, and sometimes we have to tell our clients what they need to hear, not what they want to hear, so they can actually start achieving what they want to, and faster. Want to understand more? Get in contact, we are only too happy to help! Want to read more? Awesome, a great step towards achieving financial control... you can learn more, by following this link: http://www.mycreditfile.com.au/education/article.dot?inode=521186 Want a copy of your report? You can get a copy of your report here: http://www.mycreditfile.com.au Rachael. So you have been thinking, that you probably have just about enough in super to buy yourself an investment property, but how much do you really need? Is it the same as a normal home loan, where you need 5% + costs, 20% + costs, or even 30% + costs? And, can you take mortgage insurance to borrow more? Which banks will do this type of loan, and how much will it cost?
The market has changed dramatically in recent months much thanks to changes rolled out by one of the industry regulators, and with so much ongoing change, if you are thinking of borrowing in your Self Managed Super Fund, it is imperative you work with a broker that is across the changes, and how they will effect you and what you want to achieve. Thinking about your super and your options? Call us, you have questions, we have the people, the knowledge and the resources to save you money, time and stress and get you to where you want to go faster! Budgeting + discipline = spending money on the things you REALLY want to, but where do you start? It goes without saying, you have to have a great team working for you and with you... but what else can you do to boost your progress? And what about teaching the kids?
A few great resources, can be found here, to start getting your finances back on track and steaming ahead! https://www.moneysmart.gov.au/teaching/teaching-resources Want to know more, you have questions, we have the answers. Call us! So who doesn't like to save?!? Whatever your motivation is, be it pay off the house sooner (logical), go on a well deserved holiday (increase in productivity?), or to invest in a new pair of Manolo or Armani shoes (my favourite, yet the least logical or affordable!), we can help with that!
At Get Smart Financial, we now have 3 year fixed rates from a rate saving 3.94% (comparison rate 4.64% pa comparison rate)! Talk to us about finding the right rate for you, and how we can potentially save you thousands and get you to where you want to go faster! # Things you should know. *Interest rate is current as at 19/08/2015 and is subject to change. # Comparison Rate based on a loan of $150,000 for a term of 25 years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Credit criteria, conditions, fees and charges apply. Get Smart Financial solutions, Australian Credit Licence Number #391237 So those that know me, know I am an Apple girl through and through, and love a little (or a lot!) of tech... Found an interesting piece from the awesome chicks at Business Chicks, with some time and money saving apps to keep the momentum going, and organised!
Which do you love? http://www.businesschicks.com.au/…/6-of-the-best-time-savin… ...See More So it is August already, and we are headed quickly to the time of year when the girls (and boys if they like!) get together to support the Cancer Council's annual Girls Night In... this year I will be holding an event on the 10th of October, and would love to see your support!
Empowering woman, prioritising our physical, emotional and mental health is something I am passionate about, and this event is the perfect opportunity to highlight how important these issues are.... Get on board, make a commitment, make a donation, make a difference! http://vic.cancercouncilfundraising.org.au/GetSmartFinancial Why have banks started to increase interest rates?You may have seen that in recent weeks many banks have started to lift interest rates on investment loans. It might seem a strange thing to do while the official cash rates is so low, but there’s a reason for it. Here’s everything you need to know.
What’s happening? Many lenders including major banks such as ANZ, Commonwealth Bank and NAB have announced an interest rate rise on investor loans. For some time there has been a lot of talk around a ‘bubble’ in property prices - particularly in Sydney real estate - and the regulators are more and more concerned about these price increases. The Australian Prudential Regulation Authority (APRA) showed particular concern around investor lending. The regulating body recently implemented a cap on investment lending portfolios, asking banks to restrict growth in their investor lending portfolios to 10 per cent annually. It’s this restriction that the banks are attributing the rises to their investment loan interest rates to. Who does it affect? As the bank’s stated, the rate rises are targeted at investment lending. The changes will affect first-home investors and potentially self managed superannuation funds that are looking at property investment. Owner occupier loans should remain unaffected by the changes. Homeowners can take advantage of the current lending environment. There’s never been a better time to shop around for more competitive interest rates and home loan packages. You’d be surprised what a home loan health check could do for you. It’s still possible to find more competitive loan options whether you’re a property investor or owner occupier. Call us, you have questions, we have answers. The Reserve Bank Of Australia has met yesterday for their monthly review of the cash rate, and has dropped the cash rate by 25 points, or 0.25%, to 2.0%, being the lowest most of us have seen in this lifetime:
http://www.rba.gov.au/media-releases/2015/mr-15-08.html What does this mean for you? The question is, are you really taking advantage of current rates, and minimising your interest? How much can you save by making little changes? Don't know? We do, call us, and we'll tell you how much you could save, which could be thousands of dollars a year! - Rachael |
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