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?
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.
Contact usGet 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!
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 yearUnits 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.
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:
Want a copy of your report? You can get a copy of your report here:
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!
Rachael Bland – Founder & CEO