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Did you know that if you take a portion of your home loan and fix the interest rate for 3 years (some lenders as low as 5.99%) you can borrow more for the same repayments or reduce your repayments potentially saving you $000’s.
I recently had a client take their loan from $700k up to $750k and by splitting their loan, keep their planned repayments the same. Contact us and we can show you how.
With most lenders reducing their rates even further last week, it’s a great time to review your mortgage. We can look at refinancing for you – you could be saving $000’s with a better deal and putting money back in your pocket.
If you’re on the hunt for a new property we know that if you are ready with your home finance, vendors and agents will take your offer seriously.
The current top 3 basic variable interest rates based on loan >$250k:
o AMP Banking 6.6%
o Bankwest 6.7%
o ANZ 6.75%
The current top 3 year fixed rates based on loan >$250k:
o Suncorp bank 5.99%
o Citibank 5.99%
o ING Direct 6.19%
The latest QBELMI Housing Outlook reports that unlike in the US or the UK property markets, Australia has an underlying housing shortage in most markets in the 3 years to 2014. Together with current low interest rates this will put positive pressure on housing prices over the same period.
“While the pattern of price gains is likely to be similar across all capital cities, the strongest growth over the next three years is expected in those markets with the best affordability (Adelaide, with total forecast median house price growth of 23% over the next three years), or the highest deficiencies – Sydney (+21% growth) and Melbourne (+19%). Overall, the Sydney median house price is expected to increase over the three years to June 2012 to $660,000.”
Australian Property Monitors has also released the following highlights from their data in relation to the Sydney market.
o National median house prices fell for the fifth consecutive quarter in September.
o In Sydney, annual house prices have declined by – 1.6% though units had a marginal increase of +0.6%
o Sydney’s median house price is now $637,646 down -1.8% in the September 2011 quarter and the median unit price is $451,291.
If you want to know what your property or a prospective property is really worth, we can send you a FREE PROPERTY REPORT which will include prices in the area and recent sales. Just send us at The Home Loan Company your name and email address and we can get it to you very quickly.
The Reserve Bank Australia Board announced a cut in interest rates by 25 basis points to 4.5% effective 2 November 2011. The Banks have been encouraged by the Government to pass on the rate cut and there are some competitive fixed rates available. A split loan may be worth considering. So don’t sit on your mortgage, please call me anytime on 0418 279 122 to discuss your personal circumstances. As an experienced mortgage broker, I can help save you time and money by navigating the hundreds of loan opportunities out there to select a loan that suits your needs.
There are 1, 2 and 3 year fixed interest rates currently advertised in the market at 6.25% p.a. and even some ‘specials’ at 5.99% p.a. for one year. A typical variable home loan rate set a year ago will be 7% p.a. or more and now can be as low as 6.8% p.a. which equates to a 1% plus discount from standard variable home loan rates.
You can wait for the RBA to move to cut rates as is tipped for Melbourne Cup Day and the Banks to pass on rates in due course or talk to us about fixed rate options for refinancing your home loan. With 20 years experience in the industry, as your mortgage broker, we can compare home loans and do all the work for you to get you a better deal and reduce your home loan repayments.
Depending on your circumstances you need to take care to ensure you have an offset account working so do not fix all your loan. If you do not have an offset then all the more reason to talk to us because they are an essential debt management tool.
Rates were increased 0.25% to 4.75% by the RBA in November 2010 and in addition most of the major banks moved their standard variable rates up in excess of this e.g. CBA 0.45% to 7.81% and a typical margin discount was 0.6% at the time. More recently competition has seen these margin discounts increased to 0.9% so variable borrower rates are now around 6.8% p.a. for new business a reduction of 0.4% in the past 10 months. In addition, the yield curve has changed to inverse in expectation the next RBA move will be downwards. We dont know when or if for certain but it is now possible to lock in a further 0.5% reduction immediately as some fixed rates are around 6.3% for between 1 and 3 years. There are great savings to be made by refinancing and as new loans no longer have exit fees will also put you in a better position for the future.
I get asked the question often by clients “should I have a fixed, variable, interest only or principal and interest loan?” The Home Loan Company can help you decide. Spring is usually the busiest time for buying property. Be prepared with your finances and get your loan pre-approval before you start looking for a property so you know exactly where you stand. Generally all you need to do then is provide the property details to complete the loan.
Choosing a variable interest rate option usually gives you the flexibility to pay more off your loan principal to reduce the interest charges at any time without incurring Break Costs. Depending on the loan product you can redraw to access your funds and importantly your offset account, if you have one, which can be effective. The variable rate has historically been preferred and certainly if you had fixed your rate 12 months ago for 3-5 years you would still be behind as 3 year rates were around 7% and 5 year rates 7.25% at the time.
Interest only loans are popular with investors as it allows investors to claim maximum tax deductions. Also by paying only interest, less of your cashflow is tied up servicing the loans and can therefore be used for other purposes. This can firstly be towards your highest non-deductible debt (such as your home loan or credit cards) and then to deductible debt (including investment loans).
Some fixed rate loans offer partial or full offset but this is rare and you need to check. The key benefit of going fixed is to protect you from excessive rate rises beyond your capacity to pay but you will usually pay more interest straight away. The interest rate curve has changed a little in the past year but you’ll still be paying more interest straight away for the fixed rate with the usual uncertainty as to where rates will go and how fast they will move. However, make sure your loan has the ability to fix quickly as there will be times when fixing a portion of your loan is necessary or desirable even for short periods.
Top 10 Mortgage Tips 3) Don’t Forget to Factor in Extra Costs when Buying a Property: Including real estate agent fees, stamp duty, Lenders Mortgage Insurance, legal fees, lender fees, building insurance, pest and building inspections. The Home Loan Company will help you estimate your costs.
It is now possible to borrow to purchase property in your SMSF. Strict rules apply to ensure you comply with SIS Act regulations. Peter Beverley is accredited with all the major lenders offering these loans, can guide you through the process and point you in the right direction for financial and legal advice. Just contact me and I’ll provide general informatin as to the requirements and how to do it.
For First Home Buyers. Peter Beverley has arranged loans and loan programs specifically for first home buyers since 1995. There are various ways to overcome the deposit gap e.g. 100% loans, government grants, family guarantee and gifts. It is also useful to minimize the cost of lenders mortgage insurance which please note insures the lender for credit risk and not you in any way. We can also discuss mortgage protection and your risk insurance needs which should be reviewed when taking on a mortgage.
