Moneysmith

Tweed Heads Property Market Update: What Home Buyers Need in 2026

Thu, 16 Apr 2026 04:16:06 GMT

General information only. This is not financial advice.

If you are hunting open homes in 2026, you are stepping into a Tweed market that still favours prepared buyers. Listings remain patchy across price bands, demand is steady and lenders are cautious about spending habits. If you have been Googling " mortgage brokers Tweed Heads " or “mortgage brokers near me” you already know the biggest edge this year is clarity — a tight budget, a clean file and a plan you can execute fast.

2026 Snapshot: What’s Shaping Tweed Right Now

Most signals point to a measured market rather than the swings of recent years. Supply is the pressure point, not buyer interest, so well presented properties move if pricing is realistic.

Stock and competition: family homes near schools and transport draw multiple offers while properties needing heavy work require sharper pricing to sell
Affordability tension: wages growth helps a little yet higher living costs keep a lid on borrowing power which nudges buyers toward townhouses and older units with larger floor plans
Investor calculus: tight vacancy supports yields which means investors remain active in well located pockets especially where maintenance is predictable
Buyer behaviour: shorter finance clauses and flexible settlements often beat tiny price increases so speed and certainty matter more than ever

The headline for buyers is simple — arrive with lending sorted and a crisp view of what you will and will not stretch for.

Lending Landscape: What Banks Are Looking For

Rates may sit still for stretches in 2026 yet serviceability buffers are not going away. Lenders want evidence that your cash flow can handle life, not just repayments. That shifts the focus from headline rates to the quality of your file.

Lenders will parse three months of statements for discretionary spends, buy now pay later use and patterns that suggest strain. They value consistent income and straightforward liabilities. Clean files win fast credit decisions which is the difference between securing a contract and watching it go to a buyer with a clearer approval. A local broker will show how your profile plays with different banks and which ones are currently moving fastest on Tweed postcodes.

What Buyers Need To Win In 2026

Think of your approval as a go to market pack. If it is robust, you can negotiate with confidence and close with fewer surprises.

Pre-approval that’s fully assessed: not an online estimate but a lender tested limit with documents already verified
Three price bands: target, stretch and walk away, all set off the real approval not hope
Contract levers: shorter finance dates, early val access and settlement flexibility can beat a small price jump
Deposit structure: confirm whether gifts, sale proceeds or guarantor support are acceptable to your chosen lender
Valuation reality: know where comparable sales are landing so you do not commit above what a valuer will support

These steps turn a vague budget into a bid that sellers take seriously.

Price, Product & Stock: Reading the Local Mix

In Tweed Heads, liveability still sells. Renovated family homes close to parks and transport build queues while neat townhouses with low upkeep offer a practical path for first home buyers. For units, older blocks with bigger rooms and sensible levies remain attractive. Properties with obvious flood exposure, major structural unknowns or costly finishes that have aged poorly need sharper list prices to gain traction. If you are willing to do staged upgrades, less loved stock can become a value play provided you cost the first year’s essentials and keep a buffer for surprises.

Site & Risk Checks That Belong In Every Shortlist

Beyond bedrooms and kitchens, local due diligence protects your budget and helps your loan progress without hiccups.

Flood and storm exposure: review council flood information and talk to an insurer early so premiums, excesses and conditions do not shock you after the deal
Construction and maintenance: confirm roof age, waterproofing history, windows and drainage so you are not funding urgent works right after settlement
Strata and levies for units: scan meeting minutes for special levies, lift works or waterproofing programs that affect the next two years
Noise and access: check flight paths, main road exposure, parking rules and school peak traffic patterns that influence everyday liveability
Future supply and amenity: track planned projects, zoning and transport upgrades that can support long term value

A broker cannot fix a poor site choice but they can make sure your lending structure allows for early works without crushing cash flow.

Timing Strategy: Stop Timing Price, Start Timing Approval

Trying to pick a cheaper month rarely works when listings are thin. Timing your approval is smarter. Get fully assessed before you hit open homes then keep statements clean so nothing derails final credit sign off. Ask your broker which lenders are currently clearing simple owner occupier files fastest and which ones are slow on complex income. If you are selling to buy, plan bridging limits or settlement sequences early not when you already have a property under offer.

How Local Mortgage Brokers Tilt The Odds

A headline rate looks good on a billboard. Winning a contract takes more than that. Local mortgage brokers in Tweed Heads add value by translating your situation into a structure that lenders back then keeping the process moving.

Policy fit: match your deposit, income type and property to lenders that like that exact mix this quarter
File hygiene: fix weak spots in living expenses or liabilities before an assessor sees them
Speed to yes: choose lenders whose service times suit your contract then line up valuation access so settlement stays on track
Total cost view: weigh rate, fees, cashbacks and offset features over the first three years not just day one
Plan B ready: if a valuation comes in light, have a backup lender or a negotiated path with the agent to keep the deal alive

This is where a good broker saves weeks not minutes.

Smart Next Steps For 2026 Buyers

Turn intent into action with a short checklist that keeps you moving.

Finalise a genuine pre-approval with documents verified
Price the whole move — duty, inspections, conveyancing, insurances and a repair buffer
Shortlist suburbs by liveability and risk not just median values
Decide your walk away rules before emotions take over at a private viewing
Keep statements tidy until settlement because lenders can recheck before funds draw

Small disciplines today give you leverage when you need it most.

Talk To MoneySmith Group — Mortgage Brokers in Tweed Heads

We at MoneySmith Group help Tweed buyers compare lenders, secure robust pre-approvals and design loan structures that fit real life. If you are searching for "mortgage brokers near me," start with a quick chat. Contact us and we will map a clear path from open home to settlement with fewer surprises along the way.

Where To Turn If You’re Struggling To Refinance In Tweed Heads

Wed, 08 Apr 2026 03:18:26 GMT

There’s a particular kind of frustration that comes with trying to refinance and hitting roadblock after roadblock. What once seemed like a simple way to reduce repayments or regain control over your finances can quickly turn into a confusing process filled with declined applications and unclear explanations. For many homeowners, this is where working with Tweed Heads mortgage brokers becomes less of an option and more of a necessary step towards finding clarity.

Refinancing in today’s lending environment is no longer just about comparing interest rates. It’s shaped by stricter policies, changing financial circumstances and a more cautious approach from lenders. Understanding where to turn when things aren’t working out as expected can make all the difference in moving forward with confidence.

Why Refinancing Feels Harder Than It Used To

Many borrowers are surprised to find they no longer qualify for options that once seemed straightforward: lending criteria have evolved significantly in response to economic shifts.

Several underlying factors are contributing to this change:

Higher interest rates reducing borrowing capacity
Stricter lender serviceability assessments
Increased scrutiny on living expenses
More conservative risk policies

These changes don’t necessarily reflect poor financial management. Instead, they highlight how lending standards have tightened. Mortgage brokers Tweed Heads borrowers rely on can help interpret these policies and explain what they mean in practical terms.

When Your Financial Circumstances Have Changed

A shift in income or expenses can quietly impact your refinancing options: even small adjustments can alter how lenders assess your application.

Common scenarios that affect eligibility include:

Transitioning to self-employment or contract work
Reduced or variable income streams
Taking on additional financial commitments
Changes within a household income structure

Mortgage brokers in Tweed Heads understand how to present these situations effectively, ensuring lenders see a complete and accurate picture rather than a fragmented one.

How Interest Rate Increases Affect Approval

Rising rates influence more than just repayments: they directly impact how much you’re able to borrow when refinancing.

Behind every application are calculations that factor in future risk:

Lenders apply buffers above current interest rates
Existing debts reduce overall borrowing power
Fixed-rate expiries can shift affordability quickly

Tweed Heads mortgage brokers can identify lenders whose assessment models may better suit your current position, rather than applying a one-size-fits-all approach.

Looking Beyond Traditional Lenders

When major banks say no, it doesn’t mean all options are off the table: alternative lending pathways often provide viable solutions.

Exploring a broader lending landscape can open up opportunities such as:

Non-bank lenders with flexible criteria
Low-doc or alternative documentation loans
Products designed for complex income structures
Tailored refinancing solutions

Mortgage brokers in Tweed Heads work with a wide network of lenders, helping match borrowers with options that align more closely with their circumstances.

Structuring Your Loan To Improve Outcomes

The way a loan is structured can significantly influence approval: it’s not only about income, but also about presentation and strategy.

Refining your loan setup can strengthen your application:

Consolidating debts to simplify repayments
Adjusting loan terms to improve serviceability
Splitting loans for flexibility and control
Aligning repayment types with income flow

These strategies are often overlooked when applying directly through lenders, but they can make a meaningful difference in the outcome. They also create flexibility for future changes, making it easier to adapt if your financial situation shifts again down the track.

Resolving Credit Issues Before Reapplying

Credit history plays a key role in refinancing success: even manageable issues can limit your options if left unaddressed.

Taking a proactive approach can improve your position:

Identifying and correcting errors on your credit file
Reducing outstanding credit limits
Addressing missed payments or defaults
Limiting multiple credit enquiries

Mortgage brokers in Tweed Heads can guide you through these steps, helping you rebuild a stronger profile before submitting a new application. This preparation stage often determines whether your next application progresses smoothly or encounters the same barriers again.

Choosing The Right Time To Refinance

Timing can influence success just as much as eligibility: applying at the right stage can significantly improve approval chances.

Several factors contribute to better timing:

Stable employment or consistent income history
Reduced financial liabilities
Improved credit standing
Changes in lender policies

Tweed Heads mortgage brokers often help borrowers determine when their application is most likely to succeed, rather than rushing into another attempt prematurely. Taking a measured approach can prevent unnecessary credit hits and improve long-term outcomes.

The Role Of Personalised Support In Complex Situations

No two refinancing journeys are identical: tailored guidance can uncover solutions that generic advice often misses.

Working closely with an experienced broker provides:

Access to a wide panel of lenders
Clear explanations of lending criteria
Strategic application structuring
Ongoing support throughout the process

Mortgage brokers in Tweed Heads focus on problem-solving, helping you move forward even when the situation feels uncertain. This level of support becomes especially valuable when dealing with layered financial circumstances or past application declines.

Turning Setbacks Into A Practical Plan

Repeated knockbacks can feel discouraging without a clear path forward: having a structured approach changes how refinancing is tackled.

A well-defined plan typically includes:

Reviewing your current financial position in detail
Identifying realistic and achievable options
Addressing barriers before applying again
Selecting lenders suited to your situation

This shift from reactive applications to a strategic process often leads to better outcomes and reduced stress. It also gives you a clearer understanding of your financial position, helping you make more informed decisions beyond refinancing alone.

Take The Next Step With Confidence

We at MoneySmith Group understand how challenging refinancing can feel when options seem limited and conditions keep changing in Tweed Heads. Our team works closely with you to assess your situation, explore practical pathways and guide you through each step with clarity. If you’re ready to move forward with a structured plan, contact us or book a consultation today and take the next step towards refinancing with confidence.

How A Mortgage Broker Near Me Can Help If You Have a Low Credit Score

Fri, 20 Mar 2026 04:07:25 GMT

For many first-home buyers , the idea of applying for a home loan can feel overwhelming, especially when credit history is limited or a credit score is lower than expected. It’s common to assume that a low score automatically means you won’t qualify for finance.

In reality, lending decisions involve more than just a number. Lenders consider income, employment stability, savings history and existing debts alongside your credit profile. This is where working with mortgage brokers in Tweed Heads can make a meaningful difference.

A broker can help you understand how lenders assess applications, explain the options available and guide you towards lenders who may be more flexible with credit history.

What is Considered a Low Credit Score in Australia?

In Australia, credit scores are calculated by reporting agencies such as Equifax, Experian and illion. Each agency uses a slightly different scoring range, which means your score may vary depending on where it’s checked.

As a general guide, credit scores are often grouped into the following categories:

Excellent – strong borrowing history with very low risk

Very Good – strong repayment behaviour with low risk

Average – acceptable borrowing history with some minor risk

Below Average – higher risk due to missed payments or limited credit history

Low – significant risk indicators such as defaults or multiple missed payments

For many lenders, scores in the lower ranges may trigger closer assessment of an application. This doesn’t always mean a loan will be declined, but lenders may require additional information or apply stricter lending criteria.

Some first-home buyers also have lower scores simply because they have very limited credit history. Someone who has never used a credit card or loan product may not have built a detailed credit profile yet.

Understanding where your credit score sits is the first step towards identifying suitable lending options.

Why Banks Often Decline Applications with Lower Credit Scores

Major banks and large lenders often rely heavily on automated systems to assess loan applications. These systems use credit scores as one of the key indicators of risk.

When a credit score falls below a lender’s preferred range, the system may flag the application for decline or further review. There are several reasons why this can happen.

Missed or Late Payments

Late payments on credit cards, personal loans or utility accounts can appear on your credit file. Even if the issue happened months or years ago, lenders may see it as a sign of potential repayment risk.

Existing Debt Levels

If a borrower has multiple credit accounts or high balances, lenders may question whether additional loan repayments will be manageable.

Recent Credit Applications

Applying for several credit products in a short period can also raise concerns. Lenders may interpret frequent applications as a sign of financial pressure.

Limited Credit History

Having very little credit history can also affect an application. Without enough repayment data, lenders may find it harder to assess risk.

These factors help explain why borrowers with lower credit scores sometimes feel discouraged after approaching a bank directly.

Why Working with a Mortgage Broker Can Make a Difference

When borrowers search for a mortgage broker near me , they’re often looking for guidance after a bank has declined their application or suggested their credit score may be an issue.

Mortgage brokers work with a panel of lenders, which can include major banks, smaller lenders and specialist providers. Each lender has different policies and risk tolerance.

Instead of applying to just one bank, a broker can review multiple options and identify lenders whose criteria may better suit your circumstances.

A broker can also help by:

· Reviewing your credit file & explaining how lenders may interpret it

· Identifying factors that may affect borrowing capacity

· Suggesting lenders that consider a wider range of borrower profiles

· Structuring your application so your financial position is clearly presented

This guidance can be especially valuable for first-home buyers navigating the lending process for the first time.

Access To Specialist & Non-Major Lenders

One of the key advantages of working with a broker is access to lenders that many borrowers may not approach directly.

While major banks often have stricter credit policies, specialist and non-major lenders may take a more flexible approach when assessing applications.

These lenders may consider factors such as:

· Current income stability

· Savings history

· Time since previous credit issues

· Overall financial behaviour

For example, someone who experienced financial difficulty several years ago but now has stable employment and consistent savings may still be considered by certain lenders.

Mortgage brokers understand which lenders are more open to these situations and can guide borrowers towards options that better match their circumstances.

For buyers who feel discouraged by previous declines, this broader access to lenders can significantly improve the chances of finding a workable solution.

How Brokers Help Present a Stronger Loan Application

Another advantage of working with mortgage brokers in Tweed Heads is that your loan application can be carefully prepared and structured before it’s presented to a lender.

A well-prepared loan application often includes documentation that demonstrates financial stability and responsible money management.

A broker may help you prepare:

· Evidence of stable employment or consistent income

· Records of regular savings

· Statements showing responsible spending habits

· Explanations for any past credit issues

Providing context around your financial history can sometimes help lenders understand that earlier credit challenges no longer reflect your current situation.

Carefully preparing an application can also reduce the risk of unnecessary credit enquiries, which sometimes occur when borrowers apply to several lenders independently.

Steps That May Help Improve Your Borrowing Position

Even if your credit score is currently lower than ideal, there are several steps that may strengthen your position before applying for a loan.

Review Your Credit Report

Checking your credit report allows you to see what lenders will see when assessing your application. It may also help identify any incorrect information that should be corrected.

Reduce Existing Debts

Lowering balances on credit cards or personal loans can improve your debt-to-income ratio, which lenders consider during the assessment process.

Avoid Multiple Credit Applications

Submitting several credit applications within a short time can negatively affect your credit profile. Seeking advice before applying can help prevent unnecessary enquiries.

Build Consistent Savings

Regular savings habits can demonstrate financial discipline. Many lenders view genuine savings as a positive sign when assessing borrowers.

These steps don’t always need to take years to influence an application. Even a few months of improved financial behaviour can help strengthen your position.

Guidance Can Make a Difference for First-Home Buyers

For first-home buyers with limited credit history, the lending process can sometimes feel confusing or discouraging. A single decline can make it seem like home ownership is out of reach.

In reality, lending policies vary between institutions. What one lender declines may still be considered by another.

Working with mortgage brokers in Tweed Heads allows you to explore a wider range of lending options while gaining a clearer understanding of how lenders assess applications.

At MoneySmith Group , we focus on understanding your circumstances and helping you navigate the lending process with clarity. If you’re searching for a mortgage broker near me , we can discuss your situation and explain lending options that may be available, even if your credit history isn’t perfect.

Double trouble! RBA lifts cash rate by another 25 basis points to 4.10%

Tue, 17 Mar 2026 03:48:32 GMT

Need to discuss your home loan?

More bad news for mortgage holders around the country: the Reserve Bank of Australia (RBA) today raised the cash rate for the second time this year to 4.10% in a 5-4 split decision vote. How might this impact your monthly mortgage repayments?

Hardly seems fair to hike the cash rate by another 0.25% with petrol prices so high right now (which one could argue will reduce discretionary spending) – but it wasn’t enough to sway the majority of the RBA board, unfortunately, which voted 5-4 to increase the cash rate.

Uncertainty surrounding stubborn inflation levels and global economic volatility due to the war in the Middle East had the RBA concerned enough to pull the trigger on a second consecutive rate rise in 2026.

The RBA’s Monetary Policy Board said in a statement that data since RBA’s February meeting suggests that some of the increase in inflation reflects greater capacity pressures.

“In addition, the conflict in the Middle East has resulted in sharply higher fuel prices, which, if sustained, will add to inflation,” the Board said.

“As a result, the Board judged that there is a material risk that inflation will remain above (the 2-3%) target for longer than previously anticipated.”

How could this affect your monthly mortgage repayments?

Unless you’re on a fixed-rate mortgage, your bank will likely soon follow the RBA’s lead and increase the interest rate on your variable home loan.

For an owner-occupier with a 25-year loan of $500,000 paying principal and interest, this month’s 25 basis point rate hike means your monthly repayments could increase by about $77 a month.

That equals about $924 a year. Or $1848, if you also include last month’s rate hike (yikes!).

If you have a $750,000 loan, your minimum monthly mortgage repayments will likely increase by about $115 a month. That’s $1380 per year, or $2760 if you include last month’s hike.

Meanwhile, a $1 million loan could increase by about $154 a month. That’s $1848 a year, and $3696 if you include the February hike.

This all assumes that your lender automatically passes on the full 25 basis point hike to your home loan.

Another thing to keep in mind is that when interest rates came down from the recent cycle peak of 4.35% throughout 2025, many banks around the country kept borrowers on the same monthly repayment amount – meaning they paid more off the principal of their home loan each month rather than the interest.

If this is the case for you, your monthly repayment amount (very likely) won’t increase with this latest rate hike – it’s just that more of your repayment (0.25%) will go towards the interest on your loan, rather than the principal.

To find out what your lender is doing with your loan, get in touch with us in a few days once the dust has settled and the banks have announced their next moves.

Need to discuss your home loan?

Ok, so the RBA has raised the cash rate again. It’s a tough one, sure, but there are still some steps you could potentially take to help offset this rate hike.

If it’s been a while since your last home loan review, now could be a good time to check in. You might be able to improve your situation – and we’re here to help you explore your options.

This could include renegotiating with your current lender, refinancing to another lender, or debt consolidation.

Every household is unique, and we’re committed to helping you find a solution that fits your needs.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Offset accounts surge as homeowners race to beat higher rates

Thu, 12 Mar 2026 00:28:15 GMT

Keen to put some spare funds to work?

Who wouldn’t want to save on home loan interest and pay off their mortgage faster? Homeowners are increasingly turning to offset accounts to do just that. So today we’ll look into whether an offset account could benefit you.

The recent RBA cash rate hike has led homeowners to embrace a variety of strategies to ease the rate pain, and it turns out one of the most popular options is a home loan offset account.

One of the big 4 banks, NAB, says it is seeing “ offset accounts surge ” as homeowners, especially younger borrowers, look for low‑effort ways to beat rising rates.

According to NAB, three-quarters of its home loan customers now use an offset account.

While homeowners aged 40 to 60 remain the biggest users of offset accounts, NAB says that among customers aged under 35, the number of offset accounts linked to new home loans has nearly doubled compared to last year.

Let’s dive in to understand the appeal of offsets, the potential savings to be made, and who home loan offset accounts may be suited to.

How an offset account can save on loan interest

A bit of background first.

An offset account is an everyday account linked to your home loan .

You don’t earn interest on money in the offset account. Instead, you save by paying less interest on your home loan.

That’s because the balance of the offset account is deducted from (or ‘offset’ against) the value of your home loan when loan interest is calculated.

For example, if you have a $500,000 mortgage balance and $20,000 in an offset account, you’ll only be charged interest on $480,000.

Your monthly home loan repayment amount will stay the same – it’s just that more of your monthly repayment will go towards paying off the principal, rather than towards interest.

When this pattern is repeated month after month, the savings can potentially start to stack up.

Over time the balance of your home loan may be paid off quicker, which further helps to lower the monthly interest charge.

In this way, an offset account has the potential to be a way to pay off your loan sooner.

How much could I save with an offset account?

The interest savings generated by an offset account will depend on the size of your home loan, the balance of the offset account, and your loan rate.

Here’s an example of the possible savings that we’ve put together using one bank’s offset calculator (most banks have them readily accessible online, just google ‘offset account calculator’).

Let’s say you have a $500,000 mortgage with a 30-year term and an interest rate of 5.99% (comparison rate of 6.37%), plus $20,000 always sitting in your linked offset account.

Over the life of the loan, the impact of the offset account could cut $90,571 off your total interest bill and see you mortgage-free 2.5 years ahead of schedule.

What matters is that you talk to us to know exactly how much you could save with an offset account.

Who is an offset account well-suited to?

There’s a lot to love about home loan offset accounts.

But they may not be the ideal option for every borrower.

The more you have in an offset account, the greater the savings on loan interest. So, you need to be able to resist the urge to dip into the account too often – especially as the funds are usually available at call.

One way around this is to look for a lender that offers multiple offset accounts linked to the same home loan. This way, you can use one offset account for everyday money, and the others to save for personal goals – all while saving on home loan interest.

The other aspect to consider is that offset home loans can come with higher rates and fees . If you have only limited cash savings, you may save more with a lower rate without features such as offset accounts.

Lastly, it’s always worth weighing up whether any money you allocate towards your offset account and paying off your home loan sooner could be better utilised by investing towards your future in other ways.

Refinancing – another way to save on interest

Offset accounts can be one interest savings hack. But you can’t simply add them to every home loan account – adding them can often mean refinancing.

Fortunately, you could potentially double up on cutting the amount of interest you’re paying by refinancing to a lower rate home loan at the same time.

If you’ve had your old loan for a while, it’s worth calling us to see if you could save by refinancing to a loan with a lower rate and/or features better-suited to your needs.

The main point is that you don’t have to just wear a higher interest rate.

Call us to find out if an offset account is a good fit for you – and other strategies that could potentially help you save on home loan interest.

How first home buyers can buy up to five years sooner

Thu, 12 Mar 2026 00:28:10 GMT

How long have you been trying to crack the market?

As home prices climb higher, first home buyers can feel like the goal posts are continually shifting further out of reach. But there is a way to potentially cut years off the time taken to buy a home.

Saving a first home deposit has never been easy – especially in the last decade or two.

And as property prices continue to head north, first home buyers can be left wondering if they’ll ever be able to save a 20% deposit.

But don’t give up on your dream of home ownership just yet.

We can help you explore opportunities that could get you into the market before prices potentially rise further.

A new report by Domain examines a potential solution that could bring your purchase forward by more than five years.

Home price growth is pushing out deposit timeframes

The past year has seen home values across the nation’s capitals rise by 9.9% , according to Cotality.

However, even this eye-watering increase doesn’t show the full picture.

According to Domain, in some places, the price of entry-level homes has climbed over 20% in the past 12 months – a rise it describes as “an extreme rate of price growth”.

Faced with this level of price rises, saving a deposit can be a real pain point for plenty of first home buyers.

Domain found the time taken to save a 20% deposit now ranges from 2 years and 7 months for an entry-priced unit in Darwin, to 7 years and 7 months for an entry-priced house in Sydney.

But here’s the catch.

While you’re working hard to grow a deposit, home prices are likely to keep rising.

Over the past five years, for example, Domain says the price of entry level homes has risen 68% .

Get started in the market up to 5 years earlier

The federal government’s 5% Deposit Scheme may be the solution that could help you bring forward your home buying plans.

The scheme lowers the minimum deposit needed to buy a home down to 5% , or even 2% for single parents – without the need to pay lenders mortgage insurance.

Eligible home buyers do face property price limits .

However, there are no caps on personal income, and no limit on the number of people who can apply for the 5% Deposit Scheme each year.

Domain crunched the numbers, finding that the 5% Deposit Scheme can help first home buyers looking to buy a house in Sydney get into the market 5 years and seven months earlier .

In Brisbane and Adelaide, the scheme can cut more than four years off the time taken to save a deposit.

In every other capital, the 5% Deposit Scheme can bring forward buying plans by more than three years.

Is there a downside?

Saving a deposit is just one of the home buying requirements.

Lenders also want to be sure you can comfortably manage repaying your loan.

A potential drawback of buying with a small deposit is that you’ll likely need to borrow more, and this may mean higher loan repayments.

That’s why we encourage you to speak with us at an early stage for a clear idea of the likely repayments to budget for.

Talk to us

Not surprisingly, the 5% Deposit Scheme is proving very popular, having already helped more than 240,000 Australians into home ownership .

How much do you need to earn to buy a home in 2026?

Thu, 12 Mar 2026 00:28:00 GMT

Time to ask the boss for a payrise?

Sure, saving a deposit is important, but your income can hold the real key to getting into the market. That’s because it shapes your borrowing power.

It stands to reason that lenders will look closely at your personal income when you apply for a home loan.

It’s not just about you being able to comfortably handle loan repayments. Lenders also have a legal responsibility to be sure you’re not taking on too much debt .

The challenge for home buyers is that it can be unclear what sort of income you need to qualify for a home loan.

The reality is that there’s no one-size-fits-all number.

How much you need to earn to buy a home can hinge on where you plan to buy – and whether you plan to buy solo, or team up with a co-buyer.

Average income is over $100,000 – is it enough?

Across Australia, average weekly earnings for full-time employees are around $2,130. That adds up to an annual income of about $110,791.

These figures are based on May 2025 data, so chances are, the average is a little higher in early 2026.

Even so, the average full-time income may not always be enough for some home buyers to get into the market – especially if they choose to buy solo.

Income requirements vary between cities

Domain looked at how much buyers around Australia likely need to earn to get into the market, assuming a 20% deposit.

It found that a solo buyer in Sydney, the nation’s most expensive property market , may need to earn about $232,000 annually to buy a home. A couple buying in Sydney should each earn $121,000.

Melbourne buyers fare slightly better. A single person needs around $145,000 annually, while a couple each needs about $85,000.

In Brisbane, a single buyer should aim for $166,000, dropping to $94,000 for each person in a couple.

A solo buyer in Adelaide should earn about $143,000, or an income of $84,000 when coupled.

In Perth, where home prices have jumped 97% in the past five years , a single buyer should have an income of $147,000 to buy a home, falling to $86,000 for each person in a couple.

Buying solo in Hobart usually requires an annual income of around $118,000. For a couple, the income required is about $72,000 per person.

Darwin has the nation’s most affordable property . Reflecting this, a single buyer could potentially buy a home with an income of $111,000, or around $68,000 per person as a couple.

Finally, in the nation’s capital, solo buyers would need to earn about $151,000 to buy a place in Canberra, or $88,000 for each of a couple.

The solution could be flexibility – or government schemes

It’s important to point out that Domain’s analysis is based on buyers opting to buy a house, rather than an apartment.

This matters because houses typically cost more than apartments.

Bear in mind too, the income needs noted above assume a buyer pays the city’s median house price. You may be able to find a more affordable home, depending on where you’re looking to buy.

This highlights the value of being flexible about what and where you buy, especially if you’re a first home buyer.

Additionally, there are a number of government first home buyer schemes that could potentially help you buy sooner.

For instance, the federal government’s 5% Deposit Scheme lets first home buyers get started with a smaller deposit and zero lenders mortgage insurance.

Property price caps apply – or another scheme might be more suitable for your situation – so feel free to reach out to have a chat about them.

Could you upsize your income? Talk to us first

A survey by Canstar found around one-in-two Australians expect a pay rise in the months ahead. If that’s you, you may get a handy boost to your borrowing power.

However, if you’re thinking of raising a hand for overtime work, it’s worth noting that not all lenders include 100% of overtime pay in their income assessment . The same can apply to commissions and bonus payments.

That’s why it’s so important to speak to us – to get a clear idea of your borrowing power based on your current income.

We can help you understand how much you can afford to borrow across different lenders. It may not be necessary to give up leisure time for overtime to achieve your home-buying goal.

RBA hikes the cash rate by 25 basis points to 3.85%

Wed, 25 Feb 2026 22:33:05 GMT

Not the best start for 2026…

Bad news for mortgage holders around the country: the Reserve Bank of Australia (RBA) today raised the cash rate by 25 basis points to 3.85%. Today we’ll look at why it did so, and how this rate hike could impact your monthly mortgage repayments.

Well, those three rate cuts in 2025 were nice while they lasted!

But recent ABS inflation data (3.8% in the year to December 2025) has the RBA concerned enough to start 2026 with a rate rise in an attempt to beat inflation back down to the 2-3% target range.

The RBA’s Monetary Policy Board said in a statement that while inflation had fallen substantially since its peak in 2022, it had picked up again in the second half of 2025.

“While part of the pick-up in inflation is assessed to reflect temporary factors, it is evident that private demand is growing more quickly than expected, capacity pressures are greater than previously assessed and labour market conditions are a little tight,” the Board said of its unanimous decision.

“The Board judged that inflation is likely to remain above target for some time and it was appropriate to increase the cash rate target.”

How could this affect your minimum monthly mortgage repayments?

Unless you’re on a fixed-rate mortgage, your bank will likely soon follow the RBA’s lead and increase the interest rate on your variable home loan.

For an owner-occupier with a 25-year loan of $500,000 paying principal and interest, this month’s 25 basis point rate hike means your monthly repayments could increase by about $77 a month.

That could add about $924 a year to your household budget.

If you have a $750,000 loan, your minimum monthly mortgage repayments will likely increase by about $115 a month – or $1380 per year.

Meanwhile, a $1 million loan could increase by about $154 a month – or $1848 a year.

This all assumes that your lender automatically passes on the full 25 basis point hike to your home loan.

To find out what your lender is doing with your loan, get in touch with us in a few days once the dust has settled and the banks have announced their next moves.

Feeling the strain of your mortgage? Let’s talk

Ok, so the RBA has lifted the cash rate – it can be a tough pill to swallow for families on tight budgets. But there are still some steps you could potentially take to help offset this hike.

If it’s been a while since your last home loan review, now could be a good time to check in. You might be able to improve your situation – and we’re here to help you explore your options.

This could include renegotiating with your current lender, refinancing to another lender, or debt consolidation.

Every household is unique, and we’re committed to helping you find a solution that fits your needs.

Thinking of a tree change? You might find more affordable homes

Wed, 25 Feb 2026 22:32:53 GMT

Ever dreamed of escaping the city?

Growing numbers of younger Australians are opting for regional living, and part of the lure of a ‘seachange’ or ‘treechange’ can be the chance to get more bang for your buck.

As property values climb higher, the median home price across our combined capitals has just pushed past the $1 million mark .

That’s seeing a rethink among plenty of Aussies, who are swapping city skylines for regional horizons.

Relocations from capitals to regions are outpacing moves in the opposite direction, according to the latest Regional Movers Index .

And recent CommBank research shows more than 5.3 million Australians – about 37% of city dwellers – would consider a tree change .

Gen Z (aged 18-29) is leading the trend, with almost half considering a regional move.

The Regional Australia Institute (RAI) found more affordable housing is a key appeal for more than two-in-five would-be tree changers, rising to one-in-two Gen Xers (1965-1980).

But are property prices really more affordable outside the big cities? And what should buyers be aware of when it comes to buying a home among the gum trees?

A $250,000+ price difference

There’s no doubt regional Australia can give home buyers a generous serve of affordability.

As a guide, the median home price across our combined capitals is currently $1,002,520 .

That’s a whopping $258,848 higher than the $743,672 median value across regional markets.

This price gap doesn’t just mean saving on the cost of a regional home, and property-related expenses like stamp duty.

It can also allow first home buyers with a smaller deposit to bring forward their buying plans, or buy a house rather than an apartment.

In addition, a lower purchase price may mean you need to borrow less, which brings the added plus of lower home loan repayments.

What about property price growth?

Let’s bust a few myths.

Yes, you can get great coffee outside of the cities, and no, regional areas don’t always lag behind state capitals when it comes to property price growth.

The latest house price data from Cotality shows regional home values rose 10.3% over the last year, outpacing the 9.2% gains across state capitals.

This isn’t a one-off.

Regional home values climbed 57.4% over the past five years, compared to 42.8% across the combined capitals.

This reflects what the Australian Housing and Urban Research Institute says is a knock-on effect of the long-term trend of people migrating out of our cities and into regional areas .

Could a tree change impact home loan eligibility?

If you’re considering pulling stumps from the city, and moving to the regions, it is important to be confident about your job prospects.

The good news is that many regional locations have healthy job markets , though this is always worth checking (not to mention taking into consideration your occupation or qualifications).

However, you may not need to change jobs at all.

An RAI study shows close to half (47%) of city dwellers planning a regional move would stay in their current job on a remote or hybrid basis .

Either way, it’s a good idea to talk to us about your work arrangements. That’s because home loan lenders like to see that you have stable employment when you apply for a home loan.

Other than that, the process of applying for a home loan is much the same regardless of where you plan to buy.

If you’re thinking of farewelling the big smoke in favour of country living, get in touch with us today. We can run through your situation and explain the home loan options that are a good fit for your needs.

Which generation tops housing wealth in Australia?

Wed, 25 Feb 2026 22:32:42 GMT

Hint: it’s not Boomers

Myth busted! Baby Boomers no longer own the bulk of housing wealth in Australia. We reveal who does, and how you could get started in the property market.

As many Baby Boomers (those born between 1946 and 1964) start to enjoy their retirements, they are passing the baton of property ownership over to the next generation.

A new report by KPMG reveals that Gen X (born 1965-1980) now holds more property-based wealth than any other generation .

Not to be outdone, Millennials (1981-1996) are also making a strong start in property wealth.

Let’s take a look at what’s happening, and how much property wealth each generation has accumulated to date.

The “great wealth transfer”

Baby Boomer households are still the wealthiest in Australia, with net worth (total assets minus debt) averaging $2.375 million per household.

However, KPMG says that as Boomers progressively hang up their work boots, they are downsizing their properties, and shifting money into cash and superannuation.

The upshot is that Boomers now have property wealth averaging $1.36 million per household.

While that’s nothing to be sneezed at, it puts Boomers in second place behind Gen X, with an average property wealth of $1.455 million per household.

Not surprisingly, both generations are ahead of Millennials, who have $890,000 in average household property wealth.

But there’s an unexpected twist to the property wealth story.

Property wealth is growing fastest for young Aussies

Younger Australians have the lowest levels of property wealth.

But they may have the upper hand when it comes to increasing wealth.

KPMG says 25-34-year olds, essentially Gen Z (the ‘Zoomers’ born 1995-2012), have seen the biggest gains in household wealth over the past five years.

The Zoomer generation has seen household wealth rise by around 63% since 2019-20.

According to KPMG, that’s largely thanks to rising home ownership among younger Australians – proof that a decent portion is climbing their way onto the property market ladder.

Property ownership pays off

All these stats confirm the key role home ownership can play in our lives.

Our homes aren’t just a place to live. They can also be a long-term investment.

Sure, for most of us buying a home involves taking out a home loan.

But paying off that loan can be seen as a form of forced saving, with the potential for household wealth to grow significantly.

Without the benefits of property ownership, long term renters may face serious financial challenges in retirement, according to an RBA report conducted by the Grattan Institute.

How you can get started

If you’re keen to start building wealth through property, it’s good to know that there are numerous government schemes available that can potentially help you buy sooner.

You may be eligible for a range of support – from the First Home Owner Grant , through to stamp duty savings, and the newly expanded 5% Deposit Scheme , which helps first home buyers buy with a smaller deposit and not pay lenders mortgage insurance.

Contact us to find out which schemes you could be eligible for, what your borrowing capacity is, and whether you’re ready to start your property buying journey.

How Local Mortgage Brokers In Tweed Heads Help Buyers Secure Better Home Loans

Wed, 11 Feb 2026 04:35:58 GMT

This content is provided for general information only and does not constitute financial or credit advice. Home loan options and suitability vary based on individual circumstances. Before making any financial decisions, seek personalised advice from a licensed mortgage broker or financial professional.

Buying or refinancing a home is one of the biggest financial decisions most people make. With interest rates changing, lending rules tightening and property prices varying by suburb, it’s no surprise many buyers feel overwhelmed by the process. While online calculators and comparison tools can be helpful, they don’t always reflect real lending outcomes. This is where working with mortgage brokers in Tweed Heads can make a meaningful difference. A local broker understands not just loan products, but how lenders assess applications in the Tweed Heads market specifically.

This article explains how local mortgage brokers support buyers and homeowners, the challenges they help navigate and why local knowledge matters when securing a home loan.

The Complexity of Securing a Home Loan Today

Home loans are no longer one-size-fits-all. Lenders assess applications based on a wide range of factors, many of which change regularly.

Buyers often face challenges such as:

Changing interest rates and loan policies.
Tighter borrowing capacity assessments.
Different rules for owner-occupiers and investors.
Complex income or employment arrangements.

Without guidance, it can be difficult to know which lender or loan structure is genuinely suitable.

What a Mortgage Broker Actually Does

A mortgage broker acts as an intermediary between you and a wide panel of lenders. Rather than applying to one bank, a broker compares multiple options based on your situation.

A broker’s role typically includes:

Assessing your borrowing capacity.
Comparing loan products from different lenders.
Explaining interest rates, fees and features.
Guiding you through the application process.

For buyers searching for 'mortgage brokers near me,' working with someone local adds another important layer of insight.

Why Local Knowledge Matters in Tweed Heads

Property markets are local, and lending outcomes often reflect that. Tweed Heads has its own mix of coastal properties, unit complexes and residential homes, each with different lender considerations.

A local mortgage broker in Tweed Heads understands:

How lenders view local property types.
Valuation trends in Tweed Heads and surrounding suburbs.
Common issues that arise with coastal properties.

This knowledge helps avoid surprises during the approval process.

Comparing Lenders Beyond the Headline Rate

Many buyers focus on interest rates alone. While important, rates are only part of the picture.

Mortgage brokers look at:

Loan features and flexibility.
Fees and ongoing costs.
Refinance and exit conditions.

By comparing loans holistically, brokers help buyers avoid products that look good upfront but cost more over time.

Navigating Lending Criteria and Policy Changes

Lending policies change frequently. What worked six months ago may no longer apply.

Local home loan brokers in Tweed Heads stay across:

Credit policy updates.
Serviceability calculation changes.
Deposit and LVR requirements.

This helps buyers understand realistic options before committing to a purchase.

Tailoring Loan Solutions to Individual Situations

Every borrower’s situation is different. Income structure, employment type and future plans all affect loan suitability.

A mortgage broker helps tailor solutions for:

First-home buyers.
Refinancing homeowners.
Investors.
Self-employed borrowers.

Rather than pushing a single product, brokers match loans to individual needs.

Helping Buyers Understand Borrowing Capacity

Borrowing capacity is often misunderstood. Online calculators can give a rough estimate, but they don’t account for lender-specific rules.

A broker provides clarity by:

Assessing income and expenses accurately.
Explaining how lenders calculate serviceability.
Identifying ways to improve borrowing capacity where possible.

This prevents buyers from overextending or missing opportunities.

Reducing Stress During the Application Process

Applying for a home loan involves paperwork, deadlines and communication with lenders. This can be stressful, especially for first-time buyers.

Mortgage brokers assist by:

Managing documentation requirements.
Communicating with lenders on your behalf.
Tracking progress through to settlement.

This support helps keep the process moving smoothly.

Refinancing With a Local Broker

Refinancing is not just about chasing a lower rate. It’s about ensuring your loan still suits your circumstances.

Local brokers help homeowners:

Review current loan performance.
Compare refinancing options.
Understand costs and potential savings.

With local insight, refinancing decisions are based on both numbers and context.

The Value of Ongoing Support

A good mortgage broker relationship doesn’t end at settlement.

Ongoing support can include:

Reviewing loans as circumstances change.
Advising on fixed versus variable options.
Assisting with future purchases or refinancing.

This long-term approach helps borrowers stay confident in their decisions.

Trust and Accountability in Local Relationships

Working with someone local often builds stronger trust. You’re not just a file number, you’re a client they may work with again.

Local brokers are invested in:

Reputation within the Tweed Heads community.
Long-term client relationships.
Clear and transparent advice.

This accountability matters when dealing with major financial decisions.

When a Local Mortgage Broker Makes the Biggest Difference

Local brokers are particularly valuable when:

Property types are more complex.
Borrowing capacity is tight.
Loan structures need flexibility.

In these situations, experience and local understanding can directly affect outcomes.

Choosing the Right Mortgage Broker in Tweed Heads

Not all brokers offer the same level of service. It’s important to work with someone who prioritises your needs.

Key factors to look for include:

Clear communication.
Access to a broad lender panel.
Experience with Tweed Heads properties.

A trusted broker helps you make informed choices rather than rushed decisions.

Work With Local Mortgage Brokers in Tweed Heads

Securing the right home loan involves more than comparing rates. It requires understanding lending criteria, local property conditions and your long-term goals. MoneySmith Group provides mortgage brokers in Tweed Heads for clear advice and personalised loan solutions. With local knowledge and access to a wide range of lenders, their team helps simplify the process and support confident decision-making.

If you’re looking for Tweed Heads mortgage brokers or want to review your current loan, contact MoneySmith Group to book a consultation or request a personalised home loan assessment.

How high are property prices predicted to go in 2026?

Fri, 30 Jan 2026 00:05:33 GMT

Do you know your borrowing power?

After a lengthy run of rising prices in 2025, some pundits are tipping property prices could keep climbing in 2026. Today we’ll take a sneak peek inside the experts’ crystal ball – and what it could mean for your home buying plans.

2025 was a great year for home owners, though a little more challenging for buyers, with property prices climbing 8.6% nationally .

And it seems there could be plenty of steam left in the market to push prices higher in 2026 – and again in 2027.

A new report by KPMG suggests house prices across Australia could climb another 7.7% this year alone.

Of course, a lot can happen to impact property prices over the next 12 months.

So, how might prices perform in your patch?

Below is a rundown of KPMG’s forecasts for property price growth across each of the major capitals.

Sydney: the median house price could approach $2 million

Sydney house prices are being predicted to rise 5.8% in 2026, with further growth of 5.7% in 2027.

Apartment prices are forecast to increase 5.3% this year, backed up by a 4.0% rise next year.

With Sydney’s median house price currently sitting at $1.62 million , if KPMG’s forecast proves correct, the median value could top $1.81 million by the end of 2026.

Brisbane: the big gains may not be over yet

Last year saw Brisbane home values rise 14.6% – some of the biggest gains nationally, second only to Perth.

KPMG believes there’s plenty of fuel left in the tank, with house prices expected to rise 10.9% in 2026, and 8.9% in 2027.

Meanwhile, the price of Brisbane apartments is forecast to rise 7.8% for 2026, followed by growth of 4.9% in 2027.

Melbourne: price growth expected to outpace 2025

With a median residential property value of $854,000 , Melbourne is now one of Australia’s more affordable capital cities.

However, prices look set to climb, with forecast house price growth of 6.8% in 2026, and then rising another 7.3% in 2027.

The next 12 months is expected to see apartment values rise 7.3%, with further gains of 5.5% forecast for 2027.

Canberra: moderate prices growth expected

Property prices in the nation’s capital rose just 4.2% in 2025 , and moderate growth is expected to continue this year.

KPMG is tipping house prices to rise 4.7% in 2026, followed by growth of 3.3% next year.

Canberra apartments are expected to increase in value by 4.9% over the next 12 months, and then climb 3.6% in 2027.

Hobart: softer growth tipped for 2026

After rising 7.8% over the past 12 months , property prices in Hobart could be poised for softer growth in 2026.

House prices are expected to increase by 5.4% this year, while Hobart unit values are tipped to rise 5.1%.

2027 may see price growth continue, with house and apartment values expected to rise 4.1% and 4.0% respectively.

Adelaide: the run of price growth may continue

Strong price growth in recent years has taken Adelaide’s median home price to $908,000 .

This year, KPMG is expecting the run of growth to continue, with house prices forecast to rise by 8.2%, with a further increase of 3.3% in 2027.

Unit prices are tipped to climb 6.6% this year, with growth of 3.8% in 2027.

Perth: another year of big gains

Perth’s property market was a standout in 2025, notching up price growth of 17.2% .

According to KPMG, the WA capital is set to see double-digit price growth again in 2026, with house prices expected to rise 12.8%, and apartment values forecast to increase by 11.6%.

Price growth may be more modest in 2027, with house and apartment prices expected to rise 5.1% and 3.9% respectively.

Darwin: double-digit growth may lie ahead

As Australia’s most affordable capital, with a median home price of $578,000 , Darwin prices look set to rise over the next two years.

House prices could increase by a hefty 10.5% in 2026, while apartment prices could see even bigger gains of 13.4%.

2027 should see slightly softer price growth across both houses (up 6.8%) and units (9.3%).

What’s likely to drive prices higher?

KPMG is not alone in expecting property prices to climb this year.

Research group Cotality doesn’t offer price predictions, but it is expecting “modest” price growth through 2026 .

The common assumption underpinning these predictions is that two key forces are likely to push prices higher – tight supply of new homes coupled with strong buyer demand.

Although housing construction is increasing , it is unlikely to keep pace with the estimated need for 240,000 new homes needed annually .

Buyer demand has been heavily influenced by three rate cuts in 2025 , and the expansion of the first home buyer 5% Deposit Scheme in late 2025.

The upshot is an 18% rise in demand for home loans in December 2025 compared to the previous December.

Time to review your buying plans?

Of course, forecasts are just that – predictions – and plenty could change over the year ahead.

Even so, if you’re holding off buying in the hope of prices softening, you could be left disappointed, and possibly even out of pocket.

Now is a great time to talk to us to find out if you’re home loan ready. We’ll help you work out your borrowing capacity, so you can start working to a house-hunting budget.

Roll up those sleeves – a renovation renaissance is slated for 2026

Fri, 30 Jan 2026 00:05:28 GMT

Got any home improvement projects planned?

A renovation boom may loom, with plenty of home owners choosing to renovate rather than relocate this year. So if you have plans for home improvements, it’s worth knowing how to fund your project.

Australians love tackling home renovations!

Home owners collectively spend over $1 billion each month improving their place.

And along with a more comfortable home, plus the potential to add value, well-planned renovations can also be a money-saver. They don’t incur big, non-value adding costs (such as stamp duty) that go hand-in-hand with selling up and buying elsewhere.

But amid the excitement of drawing up plans and comparing paint samples, it’s important to consider how you will fund your project.

Here’s what to weigh up.

Lending for renovations is on the rise

For smaller renovations, it may be possible to use cash savings to cover the cost.

But if you plan to shower your place with serious love, chances are you’ll need to consider finance options.

That appears to be the case for a growing number of home owners.

The Housing Industry Association says the value of lending for home improvements is now almost three times higher than it was pre-COVID.

So it’s important that you choose the finance option that suits your needs.

Your home loan could provide a solution

Last year, around 30,000 home owners relied on housing finance to pay for renovations ..

Fortunately, rising property values may mean you have enough home equity to help fund renovations.

If that’s the case, you could opt for a loan top-up. This is where your lender agrees to let you borrow extra money by increasing your current home loan.

A top-up can be a simple strategy. However, any change to your old loan should be a cue to look into refinancing.

Switching to a new home loan may allow you to secure a more competitive rate or access improved loan features.

Refinancing can come with costs. That’s why it’s so important to speak with us. We can crunch the numbers to show whether the benefits outweigh the costs, and if refinancing aligns with your goals.

A construction loan could be worth a look

For home owners undertaking major renovations, such as a large extension, a dedicated renovation or ‘ construction’ loan might be a useful option.

This type of loan differs from traditional home loans.

Instead of receiving a lump sum of cash, the loan funds are gradually released in line with various stages of the project – from laying the slab to final detailing, for example.

Part of the appeal of a construction loan is that interest is typically only charged on the funds drawdown. This can be helpful for cash flow while the project is underway.

It’s usually only when the renovation reaches completion and is formally signed off that the loan reverts to principal plus interest payments.

Construction loans can be useful for renovators but they’re not available through every lender.

Want to discuss your reno finance options?

If you’re keen to roll up your sleeves and give your place a makeover in 2026, get in touch with us to understand which finance options could meet your needs and budget.

After all, trying to plan a renovation without a budget is guesswork. Having a clear figure to work towards can help you prioritise, and then get the ball rolling on, your 2026 home renovation project.

Nurses, teachers or CEOs: which occupation boasts more property investors?

Fri, 30 Jan 2026 00:05:20 GMT

Place your bets…

Owning an investment property isn’t limited to the uber-rich. In fact, investors are usually people you interact with daily. Today, we’ll reveal which occupations are the nation’s most prolific property investors, and how you could potentially join them.

Owning a home has traditionally been the great Australian dream, but aspirations to own an investment property may not be far behind.

One-in-four households plan to invest in real estate over the next year, according to Agile Market Intelligence.

If they do, they’ll be joining the almost 2.3 million Australians who reported earning rental income in 2022-23 (the most recent Australian Tax Office figures).

What’s especially interesting, though, is that PropTrack research shows property investors span almost all adult ages, levels of income , and occupations .

But which occupations top the property investor list?

Topping the list is general manager with 65,559 property investors (no surprises there), with CEO/managing director coming in at third with 60,800, according to ATO 2021-2022 financial year data compiled by PropTrack .

But splitting them in second place is teachers (both primary and secondary) with 64,529 investors, while nurses come in at fourth (55,519) ahead of accountants (49,203) at fifth.

Other noteworthy top 20 occupations include electricians (12th with 21,397), truck drivers (18th with 15,378), and police (20th at 15,400).

With the above in mind, let’s look at four possible pathways to investing in property – even if you don’t boast a fancy job title or have substantial savings for a deposit.

Harness home equity

Home values nationally have risen 49.1% over the past five years .

That’s great news for home owners, many of whom may have seen an increase in their home equity (the difference between a home’s market value and the remaining home loan balance).

Depending on how much equity a home owner has, it may be possible to use part of this equity as a deposit on an investment property.

Get in touch with us to find out exactly how much home equity you have, and whether it could be put to work as a deposit on an investment.

Turn a first home into a rental

If you’re ready to upgrade to your next home, you may have considered holding onto your current place and renting it out.

It’s a strategy that could mean saving on selling costs. You may also be able to leverage accumulated equity to help fund the new home.

But if you’re thinking about this pathway to investing, it’s important to speak with us about financing arrangements. Not to mention an accountant, as it can have some considerations to navigate come tax time.

Rentvesting – weigh up the pros and cons

Rentvesting is all about renting where you live while owning an investment property in another, potentially more affordable, suburb.

The beauty of this approach is that you get to call your preferred suburb ‘home’, while having the opportunity to earn rental income, and potentially benefit from a rise in the value of the investment property over time.

According to PropTrack, rentvesting is on the rise , especially among first home buyers.

However, as with any investment strategy, there can be pros and cons.

When you buy as an investor, you’re unlikely to be eligible for first home owner grants or other first home buyer concessions.

This should be weighed against the rental income and potential tax savings an investment property may generate.

Co-investing – a possible boost to buying power

If your finances don’t stretch to buying an investment property solo, an alternative may be teaming up with family or friends as co-investors.

This strategy can be a way to pool financial resources and share costs.

However, there is also plenty to plan for, including how expenses will be divided, and working out an exit strategy if one owner wants to bail out ahead of the other co-owners.

If you feel co-buying could be an option that suits your goals, we can explain the various options to finance a property. Some lenders offer mortgages specifically designed for co-borrowers.

Talk to us

If you’re thinking about investing in property, it’s important to speak with a tax professional to understand the tax obligations involved, and weigh up whether property suits your investment needs and goals.

When it comes to financing a rental property, what matters is that you know the options available for your situation – and the buying strategy you have selected.

Like to learn more? Contact us today to find out if you could become a property investor.

Aussie home owners just got $82,000 richer on average

Wed, 14 Jan 2026 22:56:37 GMT

Here’s how to put your equity to work

What a way to start the new year! After a strong 12 months in the property market, plenty of homeowners around the nation are now a whole lot wealthier. And their newfound increase in home equity has opened up some exciting possibilities for 2026.

Your home isn’t just a place to live in, it could also be a cornerstone of personal wealth.

2025 proved this in spades.

At a time when holiday spending means many of us may not be feeling particularly wealthy, a rise in your home’s value could see you $82,200 richer (on average) as we head into 2026, according to PropTrack .

Let’s take a look at what’s happening, and how you could put all that equity-driven wealth to work.

2025: a bumper year for homeowners

Australia’s housing market finished 2025 on a record high, spurred on by rate cuts, increased investor demand and expanded home buyer incentives, says PropTrack .

After climbing 8.8% over the year, the national median home value gained $82,200 over the course of the year .

Even bigger gains were recorded in several capital cities.

Sydney’s median value rose by $101,200 through 2025. Brisbane’s median went up $135,900 and Adelaide’s median home price grew by $101,600.

Perth topped the leaderboard of gains, with the city’s median home price rising by an eye-watering $148,100 in 2025.

A few smart strategies could help you get a lot more bang from your higher-home-equity buck! Here are three ideas worth a look.

1. Give your place a makeover

Whether your home is a little too snug for your family’s needs, or it could just do with a thorough refresh, your home equity could help fund the renovation improvements.

Even better, renovations don’t just make your place more liveable, they can also add to your property’s value – making renovations a win-win.

2. Invest in a rental property

Property may not only serve as a long term investment , it could also generate regular rental income plus valuable tax savings (always speak to your tax professional for tailored advice on this).

And if you think you have to be rich to become a landlord, think again.

Teachers, nurses, truckies and cops are among the nation’s most-prolific property investors .

That’s because one trick to becoming an investor is to use your resources wisely.

The good news is that you may be able to use home equity in lieu of cash as a deposit on an investment property .

This may not only let you hang onto cash savings, it could also mean you use one valuable asset (your home) to fund another asset (the rental place), which may also grow in value.

3. Refinance and reap the rewards of a new loan

An increase in your home’s value may offer more than bragging rights around the office water cooler.

It could also help you save on interest on your home loan.

When your home’s value increases, your loan-to-value ratio (LVR – that’s the value of your loan as a percentage of your home’s market value) decreases.

This shift matters because a lower LVR may mean you represent less risk to lenders. And this might see you eligible for a lower interest rate.

Refinancing isn’t just about rate savings though.

Switching to a new loan and lender could help you access new or more suitable loan features.

It could also free up funds for other purposes – anything from giving your kids a quality education, to paying for your next holiday, or consolidating personal debt to streamline your finances.

Talk to us about putting your equity to work

If you’re not making the most of your home equity, it might be time to ask yourself ‘why not?’.

Get in touch today to find out how you could make your home equity work harder.

Happy New Year! Let’s discuss some potential 2026 goals

Wed, 14 Jan 2026 22:56:29 GMT

Got your New Year’s resolutions figured out yet?

There’s nothing quite like a New Year’s resolution to fire you up for another lap around the sun. Whether you’re looking to buy your first home, save on your mortgage, or leverage the equity in your current position, here are three resolutions to consider for 2026.

So long, 2025 … You know what? We’ve got to admit, you weren’t too bad after all.

Three RBA rate cuts, a bunch of first-home buyer schemes unveiled, and national property prices increasing by 8.7% all bode well for the three potential New Year’s resolutions we’ve outlined below.

Potential goal 1: cracking the property market

If you’ve been keen to buy your first home for a while, then we’ve got good news for you.

There are currently a range of government schemes that could help you get into the property market with less than the typical 20% deposit.

For starters, in October last year the federal government expanded the Home Guarantee Scheme (HGS) so that all first home buyers are now eligible to buy a home with as little as a 5% deposit – and not pay lenders mortgage insurance.

Then in December, the federal government launched its long-awaited Help to Buy shared equity scheme.

Under the scheme, eligible home buyers only need a 2% deposit. From there, the government contributes up to 40% of the purchase price of a new home and up to 30% for existing homes, in exchange for an equity stake in the property.

There are also potential state and territory first-home owner grants and stamp duty concessions you may be eligible for, meaning you could already have enough saved up to buy your first home.

Get in touch today and we’ll help you crunch the numbers.

Potential goal 2: leverage newfound equity in your home

As we touched on earlier, national property prices have increased 8.7% over the past 12 months.

In the same period, we had three RBA cash rate cuts, meaning interest rates are lower than they were 12 months ago.

Now, with those two special ingredients combined, you could potentially refinance your home loan to a lower interest rate, cash out some newfound equity in your current property at the same time, and use that equity to invest in an investment property, shares, or a renovation.

Contact us today to get a clearer picture of your home’s potential equity – and how you could use it to achieve your financial goals in the year ahead.

Potential goal 3: refinance to a more competitive interest rate

The mortgage market remains highly competitive on the back of three rate cuts in 2025, with some lenders recently trimming their variable home loan rates.

So there’s a chance you could be eligible for a lower rate, especially if you’ve had the same home loan for a while.

Refinancing to a more competitively-priced loan could put money back in your pocket during 2026 (and beyond), or help you enjoy loan features better-suited to your needs.

Contact us today for a home loan review. The odds of another RBA rate cut this year are looking increasingly slim, but that doesn’t mean you can’t create a special rate cut of your own!

Season’s greetings! Here’s to a well-earned summer break

Mon, 29 Dec 2025 23:00:38 GMT

Thanks for all your support in 2025!

As the Christmas and New Year’s festive season rolls around, we want to take a moment to sincerely thank you for your trust and support throughout 2025.

Fortunately, we had a bit more to smile about this year, with three RBA rate cuts and national property prices increasing by 8.7% .

That said, 2025 wasn’t without its hardships, with many families around the country still facing cost-of-living pressures and inflation starting to creep back up again (which inevitably brings with it talk of rate hikes, rather than cuts).

Looking ahead, if there’s anything we can do to help ease any cost-of-living pressures you may be experiencing, please don’t hesitate to get in touch and we can review your home loan.

Alternatively, if you’re looking to buy your first home, second home, or an investment property (or a family member mentions any of the above over the Christmas catch-up), we hope you think of us!

But for now, take a well-earned pause, enjoy the festive moments, and spend time with the people who matter most.

While the year ahead will no doubt bring its own surprises, one thing remains constant: our commitment to supporting you at every stage of your property journey.

Wishing you a joyful Christmas, a relaxing break, and a bright, opportunity-filled year ahead. We look forward to supporting you again in 2026.

Your suburb’s 2025 property report card is in

Mon, 29 Dec 2025 23:00:33 GMT

How did your local area perform?

You might’ve seen recent headlines that national property prices made another big jump this year. But do you know exactly how your suburb and property type performed? Well, today we’ll show you how to find out in just a few quick clicks.

Over the past year, home prices have risen 8.7% nationally, according to PropTrack .

If you think that’s impressive, over the past five years, property values have jumped more than 50% nationally .

The question is, what’s the current market value in your neck of the woods?

Here’s how to find out.

Does your neighbourhood top the table for price growth?

To discover what the average home is worth in your neighbourhood, and how much values have increased in the past year, head to Domain’s online property price calculator .

With any luck, you’ll be pleasantly surprised (note: you can toggle between ‘house’ and ‘unit’).

You could be among the home owners around Australia who have seen their place outstrip the national uptick (remember that’s 8.7% in the past year).

Domain data shows there have been some stand-out suburbs.

Houses in Adelaide’s Blair Athol notched up 17% gains in 2025 to reach a median value of $802,500.

Houses in Cabramatta, in Sydney’s south-west, jumped 18% to hit a median of $1.152 million.

Brisbane’s Acacia Ridge (median value $830,000) recorded price growth of 13% in 2025.

Not far behind was the Perth suburb of Baldavis (median value of $720,000), where house price growth topped 11% this year.

And in Melbourne, houses in beachside Frankston North racked up 10% price gains to reach a median value of $650,000.

Why have home prices climbed?

Australia’s housing market staged a surprise turnaround in 2025 , thumbing its nose at affordability challenges and cost-of-living pressures, to achieve above-decade-average price growth.

Three rate cuts in 2025 , an expanded 5% Deposit Scheme and low volumes of homes listed for sale helped drive values higher.

Put your home equity to work

A rise in your home’s value offers more than bragging rights over Christmas lunch.

It could make you eligible for a lower-rate home loan, offer a source of funds to achieve personal goals in 2026, or be the key that lets you upgrade to your next home.

Call us to find out how you could make the most of a rise in your home’s value.

No Christmas rate cut – could rates rise in 2026?

Mon, 29 Dec 2025 23:00:28 GMT

What’s in store for 2026?

Not so long ago plenty of economists were tipping a fresh round of rate cuts in 2026. But the picture’s not so clear anymore. There’s even talk of possible rate hikes next year. Here’s how you can prepare.

Talk about interest rates being unpredictable!

We started 2025 with the Reserve Bank of Australia’s (RBA’s) cash rate sitting at 4.35%. February saw the first rate cut in five years . After two further rate cuts, the cash rate is down to 3.60% .

And thanks to the RBA keeping rates on hold in December , that’s exactly where the cash rate will stay – at least until February when the Reserve makes its next rate call .

The thing is, as recently as October, several of the big banks were predicting lower rates in 2026 .

Today, the odds of a rate cut early next year – or any time over the next 12 months – are looking increasingly slim.

Let’s take a look at why, and what you could do about it.

What’s stopping more rate cuts?

Three factors are keeping the cash rate in a holding pattern.

First, the Aussie economy is growing. It’s only managed growth of 2.1% for the year, but the direction is upwards.

In addition, the job market is strong. The unemployment rate fell to 4.3% in October , down from 4.5% in September.

The chief deal breaker for further rate cuts (for now) is rising living costs.

Inflation is currently at 3.8% , well above the RBA’s target range of 2-3%.

Following the December rate meeting, RBA Governor Michele Bullock told journalists “ additional (rate) cuts are not needed ”. Instead, she flagged the prospect of possible future rate hikes.

Long story short: official rate cuts appear to be off the table.

But that shouldn’t stop you from trying to make a rate cut of your own.

Let’s review your home loan

The mortgage market is highly competitive, with some lenders recently trimming their variable home loan rates .

So there’s a chance you could score a lower rate, especially if you’ve had the same home loan for a while.

Refinancing to a more competitively-priced loan could put money back in your pocket during in 2026 (and beyond), or help you enjoy loan features better-suited to your needs.

Contact us today for a home loan review – you could line yourself up with a rate cut in time for Christmas after all – or possibly even consider fixing it ahead of any more talk of rate hikes in 2026.

2% deposit scheme ‘Help to Buy’ launches

Mon, 29 Dec 2025 23:00:20 GMT

Know anyone looking to buy a home?

Imagine being able to buy your own home with just a $12,000 deposit. That’s what the federal government’s new Help to Buy shared equity scheme can offer. But there are some pros and cons to be aware of. Let’s take a look.

Think back to 2022. That’s when the Labor government first proposed a new Help to Buy scheme .

It sparked plenty of interest back then. But three years is a long time to wait for anything, and chances are plenty of would-be home buyers have now forgotten about it ahead of its December 5 launch date.

Below we explain how Help to Buy works, and weigh up the potential benefits and drawbacks.

How Help to Buy works

Help to Buy is unlike any other scheme currently available.

It doesn’t offer a cash handout like the First Home Owner Grant .

And it goes beyond the 5% Deposit Scheme , which sees the government guarantee a first home buyer’s mortgage, so they can buy with a small deposit and avoid lenders mortgage insurance.

Instead, Help to Buy is a shared equity scheme .

Eligible home buyers only need a 2% deposit. From there, the government contributes up to 40% of the purchase price of a new home and up to 30% for existing homes, in exchange for an equity stake in the property.

Here’s an example.

Olivia is a first home buyer. Using Help to Buy, she purchases an established home costing $600,000.

Olivia pays a 2% deposit of $12,000, and takes out a home loan for $408,000.

The government chips in $180,000 (30% of $600,000).

In this way, Olivia is able to pay the full $600,000 purchase price.

Help to Buy may benefit Olivia in two key ways.

First, it takes less time to save a 2% deposit than a 5% or 20% deposit. So Olivia can bring forward her home buying plans.

Secondly, because the government pays 30% of the purchase price, Olivia can take out a smaller home loan, which lowers her regular loan repayments, making home ownership more affordable.

Who is eligible for Help to Buy?

While Help to Buy is chiefly pitched at first home buyers, it’s also available to those returning to home ownership .

Along with the need to have at least a 2% deposit, income limits apply. Singles can earn up to $100,000 annually, or up to $160,000 for single parents and couples combined.

There are caps too on the value of properties that can be purchased under the scheme. These vary between states and territories as well as between metropolitan centres and regional locations.

Talk to us to find out if you’re eligible.

What to weigh up with Help to Buy

As we’ve noted, Help to Buy offers an opportunity to buy with just a 2% deposit, pay zero lenders mortgage insurance, and get started on the property ladder with a smaller home loan.

No rent or interest is owed on the government’s equity stake , though home buyers still pay upfront purchase costs such as stamp duty and legal fees.

The chief downside is that at some stage the government expects to get its money back.

Home owners using Help to Buy can repay the government’s 30% or 40% equity stake through either voluntary repayments, or from profits on the sale of the property, or when they have the money to do so at some future date, for example, by borrowing the funds.

But it’s important to know the fine print.

Home owners aren’t just expected to repay the government’s initial contribution.

The government’s share of a home is linked to the value of the property at the time of paying out the government’s stake .

Put simply, the government scores a slice of any profits made on the sale of a home in line with its equity stake.

Completing renovations can be more complicated too.

For any major home improvements, Housing Australia (which oversees Help to Buy) will organise a valuation both before and after the renovation.

While this ensures the home owner – and not the government – pockets any value-add from renovation spending, it does mean more hoops to jump through.

One further drawback – for now at least, is that very few lenders are participating in the scheme. More are expected to join from early 2026.

Talk to us to find out more

Help to Buy is currently limited to 10,000 home buyers each year.

As a new and very different way of helping home buyers, time will tell how Australians feel about sharing equity in their home with the federal government.

In the meantime, if you’re a first home buyer or returning to home ownership, talk to us about the various options to help you get started in the market.

5-year goal: 1-in-3 Gen Zs planning to buy a first home

Fri, 28 Nov 2025 03:57:03 GMT

Wondering how to crack into the market?

Gen Z may be known for being tech savvy, but they’re also showing their smarts when it comes to home buying, with a surprisingly large number preparing to buy their first home before the end of the decade. Here’s how Gen Zs are making their home-buying plans happen.

They don’t call it the ‘great Australian dream’ for nothing.

Owning a home remains a leading goal for many Australians and a recent Westpac survey found more than one in three (35%) Gen Zs – that’s chiefly people aged in their 20s – plan to buy their first home in the next five years .

That’s a 5% increase since the start of the year, and signals a growing wave of confidence among Gen Z home buyers.

What’s driving the jump in home-buying optimism?

Let’s take a look.

Why more Gen Zs are determined to buy a home

First and foremost, almost two in five (37%) say they want to be more independent. Fair enough too – years of living in the family home, or answering to a landlord, can make a place of your own very attractive.

More than one in three (34%) Gen Zs are keen to buy a home as a way of feeling more financially secure.

About the same proportion (32%) simply want to get off the rental treadmill. Makes sense. Why pay rent when you could be paying off your own home?

What they’re doing to meet their goal

The overwhelming majority of Gen Z buyers – about eight in ten – are boosting their deposit by fine-tuning their lifestyle, making fuss-free changes such as cutting back on food deliveries and other non-essentials to save money.

Faced with a shortage of homes listed for sale , Gen Zs are also playing it smart by broadening their search. Four in five (80%) say they’re happy to consider suburbs they hadn’t previously thought of.

Gen Zs are also keeping their options open when it comes to the type of home they’ll buy.

Plans to buy an apartment, which can have an affordability edge , have jumped 2% since the start of the year, while interest in buying a house has cooled slightly.

More than half (55%) of Gen Z buyers are even considering rent-vesting – making their first property an investment, while choosing to rent where they want to live.

What deposit are Gen Zs aiming for?

There’s no getting around the fact that today’s high property prices can be a hurdle when it comes to saving the traditional 20% deposit.

So Gen Z buyers are leaning towards a different solution: buy with a smaller deposit.

Over half (53%) of 20-something first home buyers are moving ahead with plans for a deposit of 10% or less.

The good news is that this has become a lot easier thanks to the newly expanded Australian government 5% Deposit Scheme . It lets eligible buyers get into the market with as little as a 5% deposit and zero lenders mortgage insurance.

Let’s develop your first home strategy

Buying your first home doesn’t have to be a pipedream.

With a clear savings strategy, the backing of government support schemes, and a home loan that is a great match for your needs, home ownership can be achievable.

Contact us today to start the path forward to buying your first home. You could be in a place of your own sooner than you think!

Why now may be the time to buy a rental property

Fri, 28 Nov 2025 03:56:59 GMT

Ever thought about becoming a property investor?

2025 has been a big year for property investors. But the rapid growth of investment lending has fuelled speculation about a possible crackdown on loans to property investors. We explain what’s happening, and why it might be worth considering bringing forward your plans.

The past year has been a cracker for property investors.

The tightest vacancy rates on record have seen a pick-up in rental growth.

Interest rates on investment home loans are at their lowest since late 2023.

And to top it off, property price growth nationally has hit the fastest pace in over two years .

No wonder investors are buying up property in record numbers .

But as lending to investors hits the fastest pace in a decade , our bank regulator – the Australian Prudential Regulation Authority (APRA) – is watchful.

Some commentators are even suggesting APRA could clamp down on investment lending in a bid to cool property price growth.

Here’s what you need to know if buying a rental property is on your wish list.

Investment lending outstrips mortgages to owner occupiers

There’s no doubt about it, investors have been a driving force in the property market this year.

The September quarter alone saw a 13.6% rise in the number of new investment loans.

That’s 57,624 new investment home loans in the space of just three months – the highest number since early 2022.

Zooming out a little further, the past year has seen lending for investment properties outstrip growth in home buyer loans, according to ABS data.

So what’s the problem?

What’s worrying APRA are potential signs of a pick-up in riskier lending, in particular what it describes as “ high debt-to-income borrowing by investors ”.

Here’s the red flag for would-be investors.

In a recent report , APRA warned it is “ensuring banks are prepared to implement additional macroprudential tools where required to reinforce lending standards”.

In plain English, APRA is reminding banks that as the industry regulator, it can, and may, change the rules around lending to property investors – a step it has taken in the past.

The lessons of 2014–2018

2014 might seem like a lifetime ago.

However, seasoned property investors may recall 2014 as the year APRA aimed to gently cool the property market by limiting annual lending growth to property investors to 10% .

APRA further tweaked the rules by imposing a 30% limit on interest-only loans, which are typically favoured by investors.

The regulator eventually relaxed its investment lending restrictions in 2018.

Could history repeat?

Property market conditions back in 2014 were similar to those we see today.

Values were rising fast, interest rates were on a downward trend, and household income growth was sluggish.

This has fuelled speculation that APRA may introduce new regulations for today’s generation of property investors.

What it could mean for your investment plans

The decision to buy an investment property should never be rushed.

That said, if APRA does tighten lending policies, investors who delay their decision could find they have missed the boat due to changes to their borrowing power or lender restrictions.

So, somewhat ironically, APRA’s latest warnings may just spur some investors to bring forward their buying plans.

If you’re keen to become a property investor or expand your portfolio, get in touch with us today.

We can help you assess your borrowing capacity as it currently stands, and provide insights into the different funding options that could help you invest.

Australian home owners focus on paying down debt

Fri, 28 Nov 2025 03:56:41 GMT

Decisions, decisions…

To save or to pay down your home loan, that is the question. Ok, so it’s not Shakespearean levels of contemplation – but it’s still a big decision facing many Australian families right now. Let’s take a look at what the majority of home owners are leaning toward.

A growing number of home owners have given up waiting for rate cuts and are making home loan savings of their own – by knuckling down to reduce their mortgage balance.

A survey by Agile Market Intelligence found 69% of home owners – the highest percentage this year – are making it their top priority to get ahead with their home loan .

Let’s take a look at why so many are deciding to do so.

Interest rates

The interest rate you pay on a home loan will most likely be higher than the rate you’ll earn on a separate savings account.

No surprise there – charging loan interest is one of the key ways banks make money.

So, by paying down your loan sooner, you can typically save more in loan interest charges than the interest you could earn on personal savings.

Better still, the sooner you start paying down your loan, the more interest you can save over time, and the earlier you become debt-free.

That’s because every extra dollar that goes into your home loan comes straight off the loan balance. This in turn lowers the next month’s interest charge.

But as your regular repayments stay the same, more of the next month’s repayment goes towards reducing the loan balance.

In this way, the loan pendulum can start to swing more in your favour, and you can really get stuck into reducing your home loan balance.

Increased equity

When you reduce the amount owing on your loan, your home equity usually increases (so long as the value of your home doesn’t dip in value).

And the more equity you have, the more opportunity you could have to refinance to a lower interest rate loan (there’s more savings for you) or to tap into your home equity to achieve other goals, such as investing in a rental property.

Ways to pay down your home loan sooner

We understand that today’s high living costs mean home owners don’t always have a lot of spare cash to throw at their mortgage.

That’s okay.

It’s possible to pay off your loan sooner – and save on interest charges – even when cash is tight.

Here are some ideas to get you started.

1. Pay more often

Paying half your monthly repayments every fortnight (rather than monthly) means you’ll end up repaying the equivalent of 13 monthly instalments each year instead of 12.

This extra month’s worth of repayments can make further inroads on your home loan balance, and paying fortnightly may also be easier on your cash flow, especially if you can sync repayments up with paydays.

2. Add lump sums

Lump sum payments on your home loan can accelerate its reduction.

That can make it worth depositing tax refunds, end-of-year work bonuses, or other ‘windfalls’ straight into your home loan. Chances are you’ll never miss what you’ve never had.

3. Consider an offset account

An offset account can let you use spare cash to pay off your loan sooner.

The balance of the linked offset account is deducted from your loan balance when monthly interest is calculated. This reduces the monthly interest charge, so more of each repayment whittles away the loan principal.

Talk to us to know if an offset account is suitable for you.

4. Check the rate you’re paying

No matter how hard you work to pay off your home loan sooner, you could be behind the eight ball if you’re paying a higher interest rate than necessary.

For context, the Reserve Bank says the average variable rate is about 5.5% . But according to Mozo, there are plenty of lenders offering a lower rate .

That’s why it’s important not to assume you are paying a competitive rate.

Call us to organise a home loan review. We can confirm the rate you’re currently paying, and let you know if you could save by switching to a loan with a more competitive rate.

How to pay down your home loan sooner

Whether you signed up for a 25- or 30-year mortgage, you don’t have to chip away at your home loan for this amount of time.

And really, how good would it be to become mortgage-free sooner?

If paying down your loan is a personal goal, talk to us to find out more ways you could get ahead with your loan.

Time to buy? House prices tipped to heat up this summer

Thu, 06 Nov 2025 01:13:19 GMT

Got much planned this summer?

Property prices are running hot as we head into summer, and the market is tipped to dial up even further over the next 12 months. Here’s how it could shape your home-buying plans.

Aussie home values are sprinting into summer, with property price growth hitting the fastest pace in over two years in October.

The price hikes are unlikely to stop there.

A record nine out of ten (88%) respondents to a recent API Magazine survey expect home prices to climb higher .

It seems the experts agree.

PropTrack believes we could see further price rises over spring and summer, while the Commonwealth Bank says “ we still expect further gains ” this year.

If forecasts of rising home prices prove accurate – and as we’ll see, there’s a decent chance they could – now could be the time to bring forward your home-buying plans.

Home prices jump 6.1% in the past 12 months

It’s been a big year for property, with home prices nationally climbing 6.1% over the past 12 months .

Several factors have come together to push home values higher.

Lower interest rates have boosted home buyer demand .

Tight rental markets have fuelled investor activity, with investors now making up around their highest share of lending since 2017 .

Further piling pressure on home prices is the additional demand created by the newly expanded 5% deposit first home buyer scheme .

On the flipside, supply remains tight. And supply doesn’t look like catching up to demand any time soon. New home completions are already 15.6% below average for the past decade .

The bottom line is that the potential for further price rises might be a compelling reason to bring forward home buying plans.

Home price growth is eating away at borrowing power

Buying a home is never a decision that should be rushed.

But with no end in sight to property price gains, now may be time to advance your buying plans.

Speak to us – we can let you know if you are home loan-ready right now.

This is not about sprinting in to buy the first home that comes along.

Rather, it’s a matter of making the most of the buying power you have today, because it could be lower tomorrow if home prices keep rising.

You see, while the Reserve Bank’s interest rate cuts have given households on the median income a $51,000 increase in borrowing power , median home values across our big cities have risen almost $54,000 since February.

Put simply, home prices are rising faster than home buyers’ borrowing power.

Call us to get the ball rolling

An unexpected jump in inflation has put a question mark over possible future rate cuts .

So home buyers can’t rely on future rate cuts for an uptick in personal borrowing power.

A better strategy is to talk to us today.

We can explain if you’re home loan-ready right now, and how to get the ball rolling on home finance before prices rise further.

Forget ‘The Block’, more homes are selling at auction

Thu, 30 Oct 2025 01:26:27 GMT

Reality TV vs Reality

Season 21 of The Block may be over but the sales are not, with two homes failing to find buyers at auction. It’s a different story across the broader market though. As auction clearance rates heat up we explain how to get your auction game on.

Life may imitate art, but reality TV doesn’t always reflect reality.

The Block’s latest final episode is a case in point.

Two of the five homes failed to sell at auction. One didn’t even attract a bid.

But auction clearance rates in our capital cities are doing better.

Cotality reports auction clearance rates over the past two weeks are at about 72% – much higher than the clearance rate of 59.50% this time last year.

Notably, these high clearance rates are being achieved despite more homes being listed for sale at auction than any other time over the past 18 months

Now, auctions can be daunting because so much is uncertain – the number of bidders, the reserve price and, of course, the final selling price.

Below we’ve outlined five steps you can take to bring a bit more certainty to the auction.

1. Know your borrowing power

Having a firm idea of how much you can borrow can form the foundation of your buying plans.

Forget the online calculators that ask broad questions – and provide broad results that may not be accurate.

We’ll take the time to get to know you, your circumstances and your goals, and let you know for sure what your borrowing power looks like.

2. Set a buying budget

In the excitement of buying a home it’s easy to overlook other upfront costs – anything from stamp duty to mortgage transfer charges or loan application fees.

We can explain the upfront costs you should plan for.

This can help you set a buying budget, and reduce the risk of hidden costs that could derail your purchase.

3. Have your home loan pre-approved

Pre-approval means a lender has agreed to provide you with a home loan up to a certain limit, subject to certain conditions.

And that can be important when you’re buying at auction.

You’d either be very brave or very cashed up to consider bidding at an auction without the backing of home loan pre-approval.

The beauty of pre-approval is that it can help you set a firm upper bidding limit – and give you the confidence to bid up to that limit.

Talk to us about loan pre-approval as soon as you’re ready to start searching for your new home.

4. Get your legal rep to review the contract of sale

“It’s a standard contract” is an assumption that can easily catch buyers out.

If you’re the winning bidder at an auction, there’s no backing out. You don’t get a cooling off period .

So you need to be absolutely sure what you are agreeing to buy.

That’s why it’s important to have the sale contract reviewed by your solicitor or conveyancer before auction day rolls around.

5. Do all the normal pre-purchase checks

Don’t simply assume a property you’re interested in buying is in great condition.

Sure, a pre-purchase pest and building report, or a strata report (if you’re buying an apartment or townhouse) is another cost to wear.

However, it can be an investment that protects you from unexpected (and unwanted) future repair bills that could cost you a lot more.

Call us before auction day arrives

In today’s hot property market, sale by auction can be very attractive to sellers.

All aboard! The affordability of just one extra train stop

Thu, 30 Oct 2025 00:21:19 GMT

What’s one extra stop?

If you’ve just boarded the home buyer express, chances are ‘value’ is high on your list of neighbourhood must-haves. Well, it turns out that house hunters who are happy to stay on the train for just one more stop can be rewarded with savings totalling hundreds of thousands of dollars.

When you’re house hunting, it’s not uncommon to want to snag a bargain.

One possible solution? Check out the local rail map.

New research by PropTrack shows house hunters could save hundreds of thousands of dollars simply by looking at suburbs one extra train stop from the city.

Staying on track in the hunt for an affordable home

Steadily rising property prices mean one-in-three property markets across Australia now have median home values of $1 million plus.

But this doesn’t have to derail your home-buying plans.

PropTrack data reveals “dozens” of suburbs across our state capitals where buyers heading to the next station down the line can find more affordable houses.

How much more affordable?

In many areas, an extra train stop could result in six-figure savings – and in one case seven-figures – all for only a few more minutes on the daily commute.

Of course, the train station theory isn’t failsafe.

Some trains terminate in high-value suburbs. In other neighbourhoods, popular schools or nearby beaches can boost values.

But as we’ll explore below, there are many suburbs around the country where there are savings to be found.

Sydney

As the nation‘s most expensive market, finding value in Sydney is challenging. But the train station theory can help.

According to PropTrack, the biggest savings can be found in Sydney’s southern suburbs. Buyers can pay a median value of $1.75 million for a house in Como – and save a whopping $747,500 compared to neighbouring Oatley ($2,497,500).

In the city’s inner west, buying a house in Ashfield (median $2.2 million) can deliver a saving of $300,000 compared to adjacent Summer Hill ($2.5 million).

Melbourne

Across Melbourne, the biggest savings for an extra train stop are found in Caulfield, where the median house price of $1.87 million is a thumping $1,121,250 less than neighbouring Malvern’s median of $2,991,250.

Pascoe Vale buyers who pay the suburb’s median house value of $1.049 million, can save $519,000 compared with those looking one stop closer to the city in Strathmore (median $1.568 million).

Brisbane

The Brisbane suburb of Corinda (median house price $1.22 million) is only one station further along from Sherwood ($1.722 million). Yet for a few more minutes on the train, buyers can save around $502,000 on the average price of a house.

Or buyers could save $350,000 purchasing in Murarrie (median value $1,187,500) instead of Cannon Hill ($1.55 million).

Adelaide

Many of Adelaide’s beachside suburbs are on the city’s western train lines, and the waterfront appeal can see property prices rise despite being further from the CBD.

However, there are suburbs where a single train stop can reward home buyers with big savings.

The most significant price difference is found in Claren Park (median of $1.2 million), which is $311,000 cheaper than neighbouring Goodwood ($1.511 million).

Home buyers looking at more affordable locations can save $217,000 buying in Tonsley (median $675,500) compared to adjacent Mitchell Park ($892,500).

Perth

Okay, Mosman Park (median house value of $2.4 million) is at the higher end of the price range. But it’s separated by just one train stop – and $662,500 – from neighbouring Cottesloe (median $3,062,500).

For more affordable homes, buyers opting for Clarkson ($730,000) could save $220,000 compared to jumping off the train at Currambine ($950,000).

Talk to us when you’re ready to buy

PropTrack’s research shows you don’t have to buy a train wreck of a home to score great value.

What matters is that you research the prices of areas you’d like to buy in – and maybe cast your net a little wider.

When you’re ready to buy, we’ll cast our net far and wide to find a mortgage that matches your needs.

Bank of Mum and Dad stumps up $40,000

Thu, 30 Oct 2025 00:21:03 GMT

Rest assured, there are other options, too

They say there’s nothing quite like a parent’s love. Well, perhaps except for a parent’s love plus an extra $40,000 to help buy your first home. Today we’ll look at the pros and cons of family support – plus other ways to buy a first home that give mum and dad a break.

Saving a first home deposit can be an endurance test.

Nationally, it takes an average of 5.6 years to save a 20% deposit .

The catch is that deposits tend to grow slowly, while property prices can rise quickly. In the past 12 months alone, home values have climbed 4.8% .

For first home buyers, the goal posts can seem to be constantly shifting outwards.

Enter the Bank of Mum and Dad.

Research shows close to one in three (29%) home owners with a mortgage received financial help from their parents – about $40,000 on average.

But without careful planning, the generosity of parents won’t always get first home buyers over the line for a home loan.

Here’s what else you need to know.

Even a modest helping hand makes a difference

Of course, not every family has a spare $40,000 to hand out.

And that’s okay.

Even small sums – for parents who can afford it – can give first home buyers a valuable edge.

That said, it’s worth talking to us at an early stage about the type of support families can provide first home buyers.

Because not every well-meaning offer of help will fast-track a first home.

Hidden traps of the Bank of Mum and Dad

Parents can help first home buyers in a variety of ways – something as simple as letting adult kids live at home for longer can make a significant difference.

When cash payments are part of the picture, three points are worth noting:

A ‘gift’ may need to be declared in writing: a lender may ask for written evidence that a cash gift is exactly that – a no-strings-attached payment that mum and dad don’t expect to be repaid.
A loan from parents could reduce borrowing power: some parents may prefer to loan their adult child money to help with a first home purchase. If that sounds like you or your parents, it’s important to speak with us first. Some lenders may look on a loan from parents as an informal personal loan, and the required repayments could lower a first home buyer’s borrowing power.
Evidence of regular saving is still essential: support from the Bank of Mum and Dad doesn’t eliminate the need to save for a deposit. Lenders typically want to see evidence of regular saving, often spanning three to six months. This savings track record shows a first home buyer has the discipline to manage home loan repayments.

Helping hands that don’t involve mum and dad

Parents always want the best for their kids.

However, no one benefits if parents jeopardise their own financial wellbeing to give their adult children a leg-up into the property market.

If parents cannot, or choose not to, offer children financial support buying a first home, there are other options to consider:

– The 5% deposit Home Guarantee Scheme: this scheme lets first home buyers get into the market with just a 5% deposit and zero lenders mortgage insurance. Recent changes to the scheme mean it now comes with unlimited places and increased property price caps.

– The First Home Super Saver Scheme: this allows first home buyers use their super to grow a first home deposit. It’s estimated the scheme can see first home buyers save a deposit around 30% faster than a standard savings account.

– Co-buy with siblings or friends: sure, it’s not for everyone. However, by teaming up with a sibling or mate you can boost your buying power and share costs. We can explain the home loan options if co-buying is something you’re thinking of.

Talk to us to get the ball rolling

Buying a first home may not be easy. And not everyone has parents who can help give them a leg-up into the property market. But there are many different strategies that can help first home buyers.

Contact us to understand all the options open to you – you could be ready for your first home loan sooner than you think.

Disclaimer : The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Separating? Understand your home loan options

Thu, 09 Oct 2025 01:34:32 GMT

Loans, like love, can be complicated

Nicole Kidman and Keith Urban are making headlines, having reportedly called time on their 19-year marriage. If you’re also facing a relationship break-up, it’s important to know where you stand on practical issues, such as how to hold onto the family home, if that’s your goal.

While Keith and Nicole are likely to have a multi-million dollar property portfolio to divvy up, most Australians have just one family home.

That doesn’t necessarily make matters less complicated, especially as our home tends to be the jewel in the crown of household assets.

Some couples choose to sell their home, pay off the mortgage and go their separate ways.

However, if you want to hold onto the family home, the situation may be more complex.

Determining your home’s value

Unless you and your ex plan to sell your home to a third party as part of your separation (which will very quickly tell you exactly what the place is worth), the first step is to get a clear idea of the property’s value.

Knowing the current market value of your home can let you know how much you owe your ex if you plan to buy them out. Or alternatively, it can clarify how much you are owed if your former spouse wants to buy out your stake in the family home.

A local real estate agent can provide a market appraisal. But the figure you’re quoted has no legal standing, and the agent may bump up the value if they believe a listing could be on the cards.

There are websites that offer free valuations . However, these may not be entirely accurate as they are based on past property sales, which may not reflect your home’s value.

The most accurate way to know what your home is worth is by arranging a formal valuation by a licensed valuer.

This will likely come at a cost but the upside is an independent and accurate valuation of your home.

Funding your home if it’s still under mortgage

If you’re keen to hold onto your home, you’ll need to work out how to fund it if the property is still under mortgage.

You can’t normally just take over the repayments on a mortgage if the loan is held in your former spouse or partner’s name. And frankly, this would involve a leap of faith by your ex as any missed repayments could impact their credit score.

So it may be necessary to apply for a loan of your own.

As your broker, we will walk you through the process. A key factor that lenders will consider is: will you be able to manage regular loan repayments?

If you are earning a wage or salary, or relying on Centrelink benefits, spousal maintenance or even child support payments to help meet the mortgage, you’ll likely be asked to provide evidence of this income.

Alternatively, you may be able to refinance your current home loan so that it is held in your name only.

There are a variety of options available – speaking to us at an early stage can help you select the option for your situation.

Separation is a time for support and guidance

Amid the raw emotions of a break-up, it’s important to have support and guidance from trusted professionals.

In some areas, a lawyer may be your first port of call. In others, such as finance, we’re here to help.

So if you’re facing the end of a relationship, get in touch today for a clearer idea of your home loan options. It could help you start the next phase of your life.

What are the chances of another rate cut this year?

Thu, 09 Oct 2025 01:34:22 GMT

Who doesn’t love a rate cut?

The Reserve Bank has the cash rate in a holding pattern, and several of the big banks have scaled back their predictions of another cash rate cut in 2025. Here’s what it could mean for your home loan.

It looks like the rate cut party may have come to an end – for 2025 at least.

After leaving rates on hold in September, the Reserve Bank of Australia (RBA) is taking a wait-and-see approach , taking the time to gauge how the earlier rate cuts in February, May and August are flowing through the economy.

The RBA’s strategy, coupled with a return to higher inflation in October , has seen plenty of economists talk down prospects of further rate cuts this year.

Let’s unpack what’s happening and how your home loan could be impacted.

The big banks push back predictions of rate cuts

There’s a growing view that we’ve seen the last of rate cuts for 2025.

NAB has backtracked on earlier predictions of possible rate cuts in November and February, and now expects the cash rate to stay on hold until May 2026 .

The Commonwealth Bank has also shelved expectations of a November rate cut. It says we’re unlikely to see a drop in the cash rate before February next year .

ANZ no longer expects further rate cuts in 2025, instead pointing to February as the “next plausible option” .

Westpac alone is holding the flag for a possible 0.25% rate cut in December (just in time for Christmas – wouldn’t that be good!).

Why wait ‘til 2026?

These forecasts may be a bit of a downer for homeowners hoping to land a lower rate for the festive season.

But here’s the thing.

We’ve seen plenty of action in the mortgage market lately, and it may not be necessary to wait until the New Year to save with a lower home loan rate.

You may be able to make a rate cut of your own a lot sooner.

Lenders cut rates in a competitive market

According to Mozo, September saw several lenders cut their variable rates despite no change to the cash rate that month.

Mozo says the average borrower with a $660,000 loan could save around $100 per month, or $1,195 annually, by switching from a home loan with a rate of 6.10% to one costing 5.85%.

It’s a strong cue to check the rate you’re currently paying.

Especially as Canstar says a competitive rate for owner occupiers right now is 5.25%.

Could you give yourself a rate cut?

If you’ve had your hopes pinned on more rate cuts this year, it could be time for a rethink.

Instead of holding out for the RBA to cut rates again, another possible strategy is to take control of your own home loan rate.

99% of brokers have helped their clients secure a lower rate

Fri, 26 Sep 2025 01:19:08 GMT

Are you paying too much on your home loan?

Switching to a new home loan might sound like a hassle. But new research shows brokers don’t just make refinancing easier, they can also help home owners secure a lower interest rate – and much more.

A string of rate cuts this year has helped drive a sizeable uptick in the number of Australians refinancing their home or investment loan.

The June quarter saw a 24% jump in the number of home owners refinancing to a new lender compared to the same quarter last year, according to the ABS. And the number of investment loans refinanced rose by 15%.

Switching to a new loan could see you enjoy a raft of benefits – from a lower loan rate through to improved loan features.

And the benefits of refinancing can really ramp up when home owners partner with a broker, new research from the Mortgage and Finance Association of Australia (MFAA) shows .

99% of brokers have secured a discount for borrowers

Who doesn’t love paying less for things?

When it comes to your home loan rate, even a small discount can add up to serious savings on your home loan repayments and long-term interest costs.

The good news is that a recent MFAA survey found a whopping 99% of brokers have recently helped their clients secure a discount.

That’s no surprise to us. As brokers, we work hard to help you land a competitive rate.

And, as brokers work with an average of 23 different lenders , you can be confident we have conducted a thorough search to identify the loans that tick the boxes for your home loan needs.

92% of brokers have helped clients refinance for the first time

Like anything in life, if you’re thinking of refinancing for the first time, the process can seem daunting.

We aim to make it as streamlined as possible.

According to the MFAA, 92% of brokers have helped first-time refinancers. If that sounds like you, rest assured, we take the time to explain how refinancing works, the potential savings in interest you could make, and the timeframe for your new loan to be in place.

Better still, we can liaise with your old – and new – lender to help ease the burden of the whole refinancing process.

97% of brokers have clients who return year after year

Nothing says “customer satisfaction” like a repeat client.

97% of brokers have numerous home owners who keep coming back to them each time they need home loan help, the MFAA survey found.

It’s a testament to the difference brokers can make to your home loan journey – from your first home loan, to your next, right through to an investment property loan and/or refinancing.

So if you’d like to start your journey with us – or take the next step – contact us today and we’ll be happy to help you out.

Countdown to be in your new home by Christmas

Thu, 18 Sep 2025 05:30:13 GMT

Is a new home on your Christmas wishlist?

The clock is ticking towards the festive season, and home buyers still have a small window of opportunity to be settled in their new place by Christmas Day. The good news is that a broker can help you get there.

A quick visit to the supermarket shows that shelves are already stocked with festive fare (believe it or not!).

It’s a sure sign Christmas is getting closer. Just 14 weeks away, in fact.

As it can usually take anywhere from four to 12 weeks to settle on a new home, time is of the essence for home buyers hoping to celebrate the holiday season in their new home.

Of course, a home purchase should never be rushed.

But having all your ducks in a row can be the difference between waking up on Christmas morning in your new place, or facing settlement delays because key service providers have shut up shop for the summer holidays.

Here are five ways a broker can help you be in your new home by Christmas.

1. We’ll explain your borrowing power to get the ball rolling

Before heading out to open home inspections, set a date to talk to us first.

We can give you a clear idea of your borrowing power.

This is an important first step.

It tells you how much you can borrow, so you can focus on properties within your price range.

2. We’ll help you find a loan and lender for your needs

A home loan is a major financial commitment, and you need to be confident your loan is suitable for you, your budget and your lifestyle.

That’s why we take the time to understand you and your goals.

From there, you can leave the home loan search to us, confident in the knowledge that we’ll only look at loans that tick the boxes for your needs.

Of course you always have the final say in your choice of home loan, but by narrowing down the loan selection for you, we can give you more time to find your dream home.

3. We can arrange home loan pre-approval to help avoid settlement delays

There are good reasons to have your home loan pre-approved – especially at this time of year.

Pre-approval helps set a buying budget. It gives you serious clout when it comes to price negotiations.

And pre-approval is also helpful if you’re buying at auction.

It lets you bid with confidence up to a known limit, and that’s especially valuable in the current market, with Cotality reporting the highest levels of homes going to auction since June 2025.

Importantly, pre-approval can help speed up the pathway to unconditional loan approval. That’s because your lender has already done most of the groundwork involved in your loan application.

Long story short, having your loan pre-approved can be a strategy to help avoid unwanted delays.

4. We can help you put together a team of experts

Along with a broker and a lender, you’re likely going to need the support of other experts, in particular, a solicitor or conveyancer, who will review the contract of sale and complete the settlement process.

It can be a good idea to have your legal team lined up before you sign a contract. That way, the settlement process can kick off from the date of exchange of contracts without delay.

We can tap into our professional network to put you in touch with reputable service providers.

This can save you the hassle of phoning around trying to line up different professionals when the countdown has begun for the festive season.

5. We’ll manage your loan application right up to the finish line

Preparing for Christmas can be stressful enough. Let alone moving house during the festive season.

So it’s reassuring to know we can remove an extra layer of stress by liaising with your home loan lender all the way to loan settlement.

As we work closely with a variety of lenders, we’re well-placed to manage the mortgage process.

We know the decision-makers to speak with, and we will monitor your loan application from start to finish.

Is a new home on your Christmas wishlist?

Completing a home purchase in time for Christmas is a great feeling.

Knowing you have your new home sorted and your loan in place can let you relax and enjoy the festive season, pop the cork on a few bubbles, and look forward to 2026 in your new home.

Jump into the market up to 4 years sooner with 5% deposit scheme

Thu, 18 Sep 2025 05:30:10 GMT

Could you be ready to buy now?

If you’re like most first home buyers, you’ve probably realised by now that saving up for a 20% deposit can be a real slog. But what if we told you that you now only need a 5% deposit? And better yet, you could already have that amount ready to go now.

Saving up a deposit to buy a first home can be the equivalent of running a financial marathon.

It takes around 5.6 years for the average Australian family to save a 20% deposit, according to PropTrack (and potentially even longer, depending on where you want to buy).

But here’s the rub.

Home prices don’t stand still while you’re growing that all-important deposit.

Rising property prices can push the goal posts further out of reach no matter how hard you save.

The good news is that the recent expansion of the popular Home Guarantee Scheme (HGS) is expected to reduce the time taken to save a deposit by up to four years , says Housing Industry Association (HIA) Senior Economist Tom Devitt.

Our back-of-the-napkin maths says that means it could now take first home owners just over 18 months to save for a first home deposit – and many on their savings journey might already be there.

What is the Home Guarantee Scheme?

The HGS is designed to help first home buyers buy a place of their own sooner .

Unlike, say, the First Home Owner Grant , which sees eligible first home buyers receive a one-off payment, no money changes hands with the HGS.

Instead, it works by letting first home buyers purchase a place with just a 5% deposit , while the federal government guarantees the remaining 15%.

This provides lenders with security equal to a 20% deposit, meaning home buyers don’t need to pay lenders mortgage insurance (LMI) – which is usually not a small amount.

“First home buyers pay between $25,000 and $30,000 in LMI to purchase an average home,” explains the HIA’s Mr Devitt.

In this way, first home buyers can now get into the market with a smaller deposit while also saving on upfront costs.

Unlimited places, higher home price caps from 1 October 2025

The federal government recently announced important changes to the HGS.

From 1 October 2025, the scheme will be open to all Australian first home buyers .

There will be no limit on the number of people who can apply each year.

Income caps will be scrapped, allowing first home buyers with higher incomes to access the scheme. And property price thresholds will be raised to help home buyers where home values have increased.

The bottom line, according to the HIA, is that these changes to the HGS could see first home buyers buy a place of their own four years sooner on average.

How we can help you buy your first home

If you’re a first home buyer, the stars may finally be aligning.

Our job is to help you make the most of every opportunity to buy a home of your own.

Not all lenders have signed up to the HGS.

So talk to us to find out which loans and lenders are part of scheme and get the ball rolling on your first home.

5 steps to help you find a competitive edge this home-buying season

Thu, 18 Sep 2025 05:30:07 GMT

Been house hunting lately?

Spring is traditionally the peak season for property, and three rate cuts this year could further fuel buyer competition. Check out five steps that can give you a valuable head start this spring.

The combination of warmer weather, blooming gardens and the chance for buyers to be settled in their new home by Christmas makes spring one of the most popular periods for home buyers.

This spring is set to be no different.

Some experts are even predicting that the August rate cut could ignite the spring property market and intensify buyer competition.

Here’s how you could give yourself a competitive advantage this spring.

1. Set a date to talk with us

No matter whether you are a first-home buyer or upgrading to your next home, recent months have seen plenty of changes in the mortgage market.

Three rate cuts in 2025 have likely changed your borrowing power, and it is critical to know how much you could borrow so that you can establish a home buying budget.

Wasting time looking at homes you cannot afford can mean missing out on your ideal property.

Bottom line: set a date to meet with us to know where you stand in terms of your home loan readiness and personal borrowing power.

2. Consider home loan pre-approval

Having your home loan pre-approved before you even start heading off to open home inspections can give you a real edge.

Pre-approval provides reassurance that you can secure funding up to a set limit.

This means you’re well-placed to make a strong initial offer, or bid at an auction, knowing exactly what your upper price limit looks like.

Loan pre-approval also lets you act quickly when you see a place you want to buy. This alone can put you in pole position ahead of less organised buyers.

3. Look beyond open homes

In a fast-moving spring market, some homes will be sold before they’re even publicly advertised.

That’s why it can pay to connect with local real estate agents or a buyer’s agent and let them know your buying budget (home loan pre-approval will clarify this).

That way, they can let you know about any off-market opportunities – homes that haven’t yet been openly listed for sale.

Hot tip: don’t be afraid to let selling agents know you have loan pre-approval. It shows you are a serious buyer.

4. Understand the buying process

No matter whether you’re a first-time buyer or a seasoned home owner, the home buying process can seem confusing.

We can give you a clear understanding of how it all works and the steps involved.

The more you know, the better placed you can be to act quickly when the right property comes along.

5. Build your team of specialists

They say it takes a village to raise a child.

But it can take a team of specialists to buy a home.

Along with an experienced mortgage broker, you’ll likely need a lawyer or conveyancer for the legal aspects of your property purchase, maybe a buyer’s agent to track down suitably priced properties, and a building/pest inspection service that can act fast to examine a property when you’re ready to make an offer.

Having all your team members ready to go can shave valuable time off the buying process, and let you beat other buyers to the finish line.

We can help put you in touch with our trusted network of specialists if you wish.

Moving fast could mean price savings

While no property purchase should be rushed, being organised – and bringing forward your home buying plans – could see you save on price.

Analysis by PropTrack shows that September home buyers typically pay 0.23% less for a home than the average price throughout the year.

Delay buying until November, and you could pay 0.78% above the average price.

It’s a great incentive to follow our five steps and head into the spring market ready to go, and bursting with confidence.

5% deposit scheme expands early – will it increase house prices?

Thu, 28 Aug 2025 02:18:20 GMT

Looking to buy your first home?

The popular Home Guarantee Scheme that lets first home buyers get into the market with just a 5% deposit has been expanded sooner than expected. But an unexpected twist means first home buyers may want to bring forward their buying plans.

The Home Guarantee Scheme (HGS) allows first home buyers to buy with just a 5% deposit – and not pay lenders mortgage insurance.

At present, the HGS is only available to first time buyers who meet various conditions around personal income and the price they pay for their home. There are also annual limits on the number of buyers who can access the scheme.

The HGS was due to be expanded in 2026 to allow all first home buyers to buy a home with as little as a 5% deposit.

This week saw these changes brought forward to 1 October 2025.

It’s great news for first home buyers who may not previously have been eligible for the HGS. However, as we’ll see, it could also be the cue to bring forward your buying plans.

How the 5% deposit scheme works

As home prices rise , it’s no mean feat pulling together the funds needed for a 20% deposit.

So it’s no surprise the HGS has proven very popular.

Since launching in 2020, the scheme has helped more than 230,000 first home buyers enjoy the rewards of home ownership with a deposit as low as 5%.

While the HGS doesn’t involve a cash payment to first home buyers, it can help you save in other ways.

As the federal government guarantees part of your home loan, this waives the need for lenders mortgage insurance – a saving that can be worth tens of thousands of dollars .

How the 5% deposit scheme is changing

From 1 October, all first home buyers will have access to apply for the HGS.

The current caps on the number of places, and income limits, will be scrapped .

The scheme’s property price limits will also be set higher , providing access to a greater variety of homes.

In addition, the Regional First Home Buyer Guarantee will be replaced by the First Home Guarantee.

Minister for Housing Clare O’Neil says these changes are all about getting more people into their first home sooner.

Why consider bringing forward buying plans?

The early expansion of the HGS may provide a valid reason to bring forward your buying plans.

The Insurance Council of Australia says the expansion of the scheme could see house prices rise up to 10% in the first year alone in markets preferred by first home buyers.

Nationally, it predicts prices could rise 3.5-6.6%.

The logic here is that the expanded scheme may create more buyer demand in Australia’s already undersupplied housing market, thereby pushing up prices.

Talk to us to find out if you’re home loan ready

The reality is that no one can say for sure how home prices will rise in the future.

What we can say, though, is that most people find it more rewarding to pay off their own home than they do their rent.

Remember too, you can still apply for the HGS before 1 October, as long as you meet the income caps and current property price limits.

Talk to us today to see if you could buy with a 5% deposit. You could be home loan ready right now!

Surge in switching: 1,000 home loans refinanced every day

Thu, 28 Aug 2025 02:18:12 GMT

Thought about switching things up?

Three rate cuts since February have spurred home owners to take a closer look at their home loan. Turns out plenty have found a loan better suited to their needs elsewhere, with 100,000 home loans refinanced in the past quarter.

It’s not every day we do a double-take looking at lending numbers.

But it happened this week, with the latest ABS data revealing an astonishing 1.26 million home loans have been refinanced over the past three years.

A rise in refinancing kicked off when the Reserve Bank of Australia (RBA) hiked rates across 2022 and 2023.

Now that rates are on the way down , home owners are just as eager to switch.

Almost 100,000 mortgages were refinanced in the June 2025 quarter. That’s just over 1,000 home loans daily – the highest level since September 2023.

Here’s why Australians are refinancing in such large numbers.

The potential to save on loan interest, lower repayments

The RBA has handed home owners savings on a platter in recent times, with three rate cuts totalling 0.75% so far this year.

But home owners hungry for more have the potential to unlock extra savings.

Canstar has crunched the numbers , finding that a borrower with a $600,000 loan could save more than $12,000 over the next two years by switching to a lower-rate loan.

This assumes the borrower hasn’t renegotiated their rate in the last three years. But that’s not unreasonable.

Meanwhile, a Finder survey shows more than one-in-two home owners have no idea what rate they’re currently paying.

A chance to access home equity

Refinancing may offer more than rate savings.

Switching to a new loan could be an opportunity to tap into the equity built up in your home. And you could have a lot more equity than you realise.

Home values nationally have risen 45% in the last five years , and are 65% higher than they were a decade ago.

So if you need funds for a variety of purposes – from renovating your home, to paying for the kids’ education, to investing in a rental property – refinancing may offer a lower-rate solution.

A loan better suited to your needs

Switching to a new home loan may also be a chance to access improved loan features.

Maybe you’re keen to take advantage of an offset account or split your loan between fixed and variable rates.

If your current loan doesn’t offer these or other features such as a redraw facility, it could be worth looking into refinancing.

Leave the legwork to us

More than a hundred thousand families have benefited from refinancing in the last quarter alone.

The longer you put it off, the longer you may keep paying your old rate.

Third rate cut delivered this year as RBA trims cash rate to 3.60%

Tue, 12 Aug 2025 06:45:41 GMT

Borrowers around the country have been delivered a sunnier financial outlook this month after the Reserve Bank of Australia (RBA) today trimmed the cash rate by another 25 basis points to 3.60%. How much could your monthly mortgage repayments decrease?

After last month’s unexpected hold, the RBA this month went with market expectations and delivered its third cash rate cut in 2025 in an attempt to ease cost-of-living pressures on Australian families.

RBA Governor Michele Bullock said in a statement that the Board unanimously decided to cut the cash rate by 25 basis points as underlying inflation continued to decline back towards the midpoint of the 2-3% target range.

How much could you now save on your mortgage repayments?

Unless you’re on a fixed-rate mortgage, hopefully your bank will soon follow the RBA’s lead and decrease the interest rate on your variable home loan.

For an owner-occupier with a 25-year loan of $500,000 paying principal and interest, this month’s 25 basis point rate cut means your monthly repayments could decrease by about $76 a month.

That would put $912 a year back into your household budget.

If you have a $750,000 loan, your monthly repayments will likely decrease by about $114 a month – or $1368 per year.

Meanwhile, a $1 million loan could decrease by about $152 a month – or $1824 a year.

This all assumes that your lender automatically passes on the full 25 basis point cut to your home loan.

Another thing to consider is that not all lenders automatically reduce variable home loan repayment amounts in line with rate cuts.

Some lenders simply maintain your repayment amount at the old level. It’s just that more of your money goes towards paying off the principal (rather than the interest) each month. But you can ask them to reduce your repayments in line with their cuts.

To find out what your lender is doing with your loan, get in touch with us in a few days once the dust has settled.

Still feeling stress from your mortgage?

Even with this latest rate cut, many Australian families are still grappling with living costs and interest rates that are higher than when they first took out their home loan.

If that includes you, now could be a good time to check in with us for a home loan health check.

You might be able to improve your situation by either renegotiating with your current lender, refinancing to another lender, or through debt consolidation.

Whatever your situation, we’re here to help you explore your options.

Skipping pre-approval sees 1-in-10 first home buyers miss out

Tue, 12 Aug 2025 06:45:31 GMT

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Buying a first home isn’t always easy, and first-timers sometimes miss out on a place they’ve set their heart on. But more than one-in-ten first-time buyers have missed out simply because they didn’t have home loan pre-approval.

Buying a first home can be an emotional roller coaster. It’s not unusual to find a property you love, only to lose out.

A Finder survey shows three-in-five first home buyers have been beaten to homes – usually because they’ve been outbid by a competing buyer.

There’s not a lot you can do about another buyer having deeper pockets.

But there are steps you can take to potentially give yourself a strategic advantage.

One of them is having home loan pre-approval.

Yet Finder reports more than one-in-ten (11%) first home buyers lost out on a home because they didn’t have pre-approval in place.

Here’s why pre-approval can give you a competitive edge.

What is home loan pre-approval?

Home loan pre-approval involves applying for a home loan before you begin house-hunting.

It’s a chance for a lender to check out your details (such as your income, deposit and savings record), and give you the thumbs-up for a loan to a certain price limit.

Think of it as you and your lender both swiping right on each other.

Pre-approval shouldn’t cost you anything. And you’re not committed to take out the loan.

But it can be very reassuring to know you’re good for finance when the right property comes along.

As the lender specifies how much you can borrow, pre-approval also helps set a buying budget, and lets you confidently negotiate on price or bid at auction.

The risks of skipping loan pre-approval

Of course, you can choose to apply for a loan after you’ve found a home to buy.

It can be a more high-stakes approach, and leaving things this late can put you at a disadvantage.

Lenders usually need time to review your application and decide if you qualify for a loan – and how much you can borrow.

That time gap could see a more organised buyer jump in and beat you to the finish line if time is a factor for the vendor.

There’s also the risk of overestimating your borrowing power (that said, we can help you work that out without going through formal home loan pre-approval).

Long story short, while loan pre-approval is not compulsory, it can be a smart step that lets you act fast – and with confidence – and it tells sellers you’re a serious contender for the property.

The fine print on home loan pre-approval

A few finer points of home loan pre-approval are worth knowing:

1. Pre-approval comes with a time limit: loan pre-approval doesn’t last indefinitely . In most cases, pre-approval extends for three to six months depending on the lender. Don’t let this rush you. We can help you reapply for pre-approval if that time lapses.

2. Pre-approval is based on your circumstances when you apply: life doesn’t stand still for long. If your circumstances change after receiving home loan pre-approval, let us know and we can talk to your lender to update your pre-approval.

3. Not all lenders offer home loan pre-approval: every lender is different. And some choose not to offer loan pre-approval. We can save you time by explaining the lenders that offer pre-approved home loans.

Get in touch for more information

If you’re not sure where to begin with home loan pre-approval, contact us today.

We can guide you through the steps involved, and explain how home loan pre-approval could help you beat other buyers to the punch.

How your home can help your kids get a great education

Thu, 31 Jul 2025 02:07:21 GMT

Got your eye on a school’s catchment area?

Location, location, location. Or should we say: education, education, education. New research shows homes in the catchment areas of sought-after public schools can command six-figure price premiums. Here’s why.

Your home can be much more than a roof over your head. It’s also an investment that may build personal wealth and serve as a form of disciplined saving.

And a new analysis by Cotality (formerly CoreLogic) shows our homes can also play an unexpected role, such as helping our kids enjoy a decent education.

Families pay 6-figure premiums for homes in popular catchment zones

Cotality recently looked at property values inside high-performing public high school catchment zones in Sydney and Melbourne.

It found what families around Australia have probably long suspected – that homes located inside catchment areas for popular public schools can command 6-figure premiums compared to similar properties outside the school zone.

The willingness of families to pay more isn’t just about the kids being able to walk to school.

Cotality says that while the price premium within popular public school zones can top $100,000, this can still see families saving money when compared to paying for private schooling over many years.

Better still, unlike school fees, which tend to rise over time, mortgage repayments often decrease in real terms due to inflation.

3 ways your home (and home loan) could help with school costs

Pulling up stumps and moving to a new home within a particular school catchment isn’t for everyone.

Fortunately, there are other ways your home and mortgage could help fund a quality education.

Here are three strategies you could consider.

1. Pay for school fees using an offset account

An offset account is an at-call account linked to your home loan.

Instead of earning separate interest on the offset account, the balance is deducted from (or ‘offset’ against) the value of your home loan when loan interest is calculated.

If you have, say, $50,000 in the offset account, and a mortgage of $600,000, loan interest will be based on a balance of $550,000 instead of $600,000.

In this way, an offset account can help you achieve two goals – providing a secure place to grow savings for your child’s education, while also helping you get ahead with your home loan.

2. Tap into home equity

Home equity – the difference between the current market value of your home and your loan balance – can be put to work to achieve a variety of personal goals.

With almost half (44.8%) of all suburbs across Australia now at record high values , you could have more home equity than you realise.

One way to use equity is to request a loan top-up from your lender. We can explain what’s involved for your specific circumstances

In general though, the decision to tap into home equity should be a cue to review your home loan.

Refinancing to a new loan could see you save with a lower rate or access improved loan features – all while freeing up equity to pay for a place in the school of your choice.

3. Invest in a rental property

A rental property may also help pay for your child’s education.

Your tax advisor or accountant can explain if an investment property is a suitable choice for you.

Broadly speaking though, the regular rent you receive, plus possible tax savings from negative gearing , and a rise in the property’s value over time (which can generate more equity to use) all have the potential to help you fund school costs down the track.

Alternatively, you could also consider rentvesting.

This can allow you to buy a more affordable property that’s outside your desired school’s catchment area, while renting a home to live in inside the catchment area.

Keen to learn more?

Paying education expenses can be challenging. But let’s face it, so can a mortgage if you overextend yourself.

That’s why it can be important to assess your borrowing capacity before you go house hunting.

We can help you work out how much you can comfortably borrow, which in turn, can help you buy a home in the catchment area of a school that you’d like to send your kids to.

Newly built homes notch up strongest sales in 3 years

Thu, 31 Jul 2025 02:07:18 GMT

Ever thought of buying or building your own new place?

There’s a lot to love about buying a brand new home, and sales of recently constructed homes have increased 19% over the last quarter. We look at the pros and cons of buying a new home – and the financial incentives available to new home buyers.

Fresh paint, spotless floor coverings and shiny new appliances. It’s easy to see the appeal of newly-built homes.

And it turns out a growing number of Australians are choosing new homes.

The Housing Industry Association says sales of new detached homes rose 18.8% in the three months to June 2025 compared to the previous quarter.

It’s the strongest new home sales in almost three years.

Despite new homes having loads of appeal, they can come with downsides.

Here’s what to weigh up.

The pluses of buying a newly built home

The word ‘new’ says it all.

As a new home buyer, everything in your property is squeaky clean – no outdated appliances, no dodgy décor – just a shiny new home built with modern lifestyles in mind.

That’s not the only upside.

A new home can offer other advantages:

– Energy efficiency: new homes must be built to a high standard of energy efficiency . It can make a new home more comfortable, and provide savings on utility bills.

– Lower repair/maintenance costs: buy a new home, and you can be fairly confident that repair and maintenance bills aren’t going to burn a hole in your wallet – in the early years at least. If repairs are required, the cost may be covered by the builder’s warranty.

– Opportunities to customise: if you build a new home, you may have the opportunity to alter the layout, fittings, finishes and colour palette to suit your personal preferences. It can cost a lot less to make these changes during construction compared to renovating an older home to your taste.

– High depreciation for investors: if you’re buying as an investor, a newly-built home can offer depreciation benefits, which could translate to tax savings.

Possible drawbacks of new homes

Property is usually a major purchase in your life. So it’s important to look beyond the appeal of a newly-minted home to decide if it’s right for you.

Points to weigh up include:

– The possibility of an outer suburban location: unless you decide to build on an in-fill site in an established suburb, newly built homes are most often found in outer suburbs.

This sort of location won’t suit everyone.

But if you can push past the growing pains of a new suburb (such as less established infrastructure), a freshly-built home may be more affordable than an established home in an inner suburb.

– You may have a stressful wait: with an older home, you can usually move straight in after settlement. Buying a new home can mean waiting for construction to be completed and signed off by council.

Anyone who’s watched Grand Designs can tell you the process can be extremely stressful, with building costs and timeline blowouts commonplace. You may also face delays and disputes when it comes to getting the builder to fix any defects.

All this can mean paying rent longer than expected – or living in a tiny trailer onsite, as so often happens on Grand Designs.

Government incentives for buying a new home

Buyers of new homes may benefit from savings on stamp duty and government incentives.

– First Home Owner Grant: this changes from state to state, so do your research here . But it is typically only available if you buy/build a new home (or in some states, a substantially renovated home).

– Stamp duty incentives: stamp duty is usually based on the value of a property at the time of purchase. This being the case, buying land first and building later can mean savings on stamp duty.

As home prices push higher, most Australian states including New South Wales , Victoria , Tasmania , Queensland and Western Australia , have made stamp duty concessions available to first home buyers, no matter whether you buy a new or established home.

First home buyers in South Australia still need to buy/build a new home to be eligible for stamp duty savings.

We can help explain your home loan options

Finding a loan that matches your needs depends on whether you are buying land to build on later, opting for a house and land package, or purchasing a newly constructed home.

Get in touch with us today to discuss your plans and we can run you through some funding options that could help you enjoy the benefits of owning a brand new home.

Has your borrowing power increased in 2025?

Thu, 31 Jul 2025 02:07:11 GMT

Here’s a few reasons why it might have

If you haven’t checked your borrowing power recently, it might be worth another look. A lot has happened in 2025, and your borrowing capacity could be higher than you realise.

It’s been a busy year on the money front.

Tax cuts, a couple of rate cuts, and reductions in HECS debts have all potentially been a plus for our financial wellbeing.

That’s not all that’s improved.

There’s a decent chance your borrowing power has enjoyed a boost, which could make now a good time to revisit your borrowing capacity.

What shapes your borrowing power?

Your borrowing power, or as lenders like to call it – your borrowing capacity – is the amount a lender will let you borrow to buy a home.

Each lender has their own way of calculating borrowing power.

But it mainly boils down to three things: your income, your household expenses, and any other debts you may have that’ll need to be repaid alongside a home loan.

The important thing to know is that your borrowing power isn’t set in cement.

It can change over time, and recent months have seen several events that are likely to have increased your borrowing capacity.

Here are 4 reasons why your borrowing power could be on the rise.

1. Interest rates have fallen

Two official rate cuts this year have helped to lower home loan interest rates.

This time a year ago, the average variable rate on new loans was about 6.3% . Today it’s closer to 5.8%.

Lower rates mean lower monthly home loan repayments. This flows through to higher borrowing power.

How much higher?

Canstar says the February and May rate cuts could have added $23,000 to the borrowing power of a single person on the average wage. A couple may have seen their borrowing power increase by $40,000-$45,000.

2. Tax cuts have kicked in

A year ago we were celebrating the arrival of Stage 3 tax cuts that put money back in our hip pockets.

Tax cuts can have another happy side effect.

Paying less tax can mean more after-tax income. This converts to higher borrowing power.

The uptick can be surprisingly generous.

According to Compare the Market, the Stage 3 tax cuts could mean a couple with no kids has seen a $47,000 increase in their borrowing capacity .

3. Wages are up

Around 2.9 million Australians received a pay rise from the start of July thanks to a 3.5% increase in the National Minimum Wage and award wages.

Even if you’re not covered by these wage rises, the boss may have agreed to give you a pay rise from 1 July.

Or a new job could see you earning more.

Talk to us to know how a bigger pay packet may have impacted your borrowing power.

4. Lenders are treating HECS-HELP debts differently

In the past, lenders have typically included student debt – that’s HECS-HELP loans – in their loan serviceability calculations.

In 2025 however, lenders have been given the flexibility to overlook HECS-HELP repayments as long as the outstanding student debt is close to being paid off.

If this sounds like you, your borrowing power may now be higher than you expect.

Steps you can take to potentially lift your borrowing power

Keen to boost your borrowing capacity further? It may be done by following some, or all, of the steps below:

Reduce regular expenses: lenders take household expenses into account when deciding how much you can borrow. Trimming back a few regular bills can make a difference to your borrowing power. Consider cutting back subscriptions for apps and streaming services, the gym, or shop around for cheaper power or phone plans.

Cut your credit card limit: lenders assess your borrowing capacity based on your card’s credit limit, not the outstanding balance. As a rough guide, every $10,000 of credit card limit can reduce your borrowing power by about $50,000 . If you’re not keen on cancelling a card altogether, consider contacting the card issuer to lower the credit limit.

Keep a lid on other debts: the more you can cut back other debts, such as personal loans or car loans, the higher your borrowing power can be. Sure, it’s not easy paying down debt. But keep your eyes on the prize – it could take you closer to buying your first, or next, home.

Get to know your number

Just because you can borrow more, doesn’t mean you should borrow more.

Even so, it’s always worth knowing your personal borrowing capacity – it’s a key number that can help you achieve your property goals.

Get in touch if you’d like to find out your current borrowing power.

We can share ways you can improve your borrowing capacity, and explain how you can make the most of it to apply for a loan that matches your needs.

Two-thirds of borrowers could save by refinancing: report

Thu, 10 Jul 2025 03:16:20 GMT

No RBA rate cut? No worries

Home owners hoping for rate relief in July may be disappointed, but it’s still possible to score a rate cut of your own by refinancing. Despite this, plenty of borrowers are sticking to an old loan – and it could be costing them.

When it comes to rate cuts, nothing is certain until the Reserve Bank of Australia (RBA) wraps up its board meetings.

We saw this in July, when a long line of pundits predicted a rate cut was almost a sure thing , only to see the RBA keep rates on hold due to concerns about an uncertain economic outlook.

The good news is this hasn’t stopped tens of thousands of home owners negotiate a personal rate cut by refinancing.

Refinancing ramps up in 2025

Recent figures from property settlement firm PEXA, show refinance volumes have rebounded , rising 12.5% over the year to March 2025 as borrowers chase lower rates.

That’s seen thousands of home owners land a rate cut of their own, with the Australian Bureau of Statistics reporting over 65,000 home loans were refinanced in the first three months of 2025 alone.

But it seems many are still missing out.

A survey by Compare the Market shows 65% people who’ve had the same home loan for 3-plus years haven’t refinanced.

And in today’s home loan market, a loan that was competitive back in the day may no longer be such a great match for your needs.

Why think about switching?

As we saw this month, there are no guarantees the RBA will bring future rate relief.

That’s why it can be important to take a front-foot approach by getting in touch with us to compare your home loan options.

This especially applies if you’ve had the same loan for several years, because there’s been plenty of action in the mortgage market lately.

Mozo reports that some lenders have introduced rate cuts on their own, others have held back on official rate cuts, and a growing number are offering fixed-rate options starting with a ‘4’ (now there’s something we haven’t seen for a while!).

Is refinancing right for you?

Loyalty is a great quality – just perhaps not when it comes to home loans.

Sticking with an old home loan can mean paying a higher interest rate than necessary, or missing out on improved loan features.

If you and your loan have been together a while, call us to see if your home loan is still suitable for your needs – and if not, we can help you find one that is.

Small deposit? 50,000 Home Guarantee Scheme spots just opened up

Wed, 09 Jul 2025 23:49:20 GMT

Struggling to grow your deposit?

Growing a 20% deposit isn’t just challenging. It can be a (very) long slog. Fortunately, 50,000 new places in the popular 5% deposit Home Guarantee Scheme just opened up on July 1. Here’s how to secure your spot.

Struggling to reach that seemingly mythical 20% milestone? You’re not alone.

Property exchange platform PEXA says it can now take buyers more than a decade to save up a deposit for a home .

Who’s got that sort of time?

This is where the Home Guarantee Scheme (HGS) can come in. It allows first home buyers to enter the market with as little as a 5% deposit.

The good news is that on the 1st of July, 50,000 new HGS places became available .

How the 5% deposit first home buyer scheme works

Instead of providing a cash payment, the HGS sees the federal government guarantee your home loan.

In this way, the HGS offers a chance to buy a place of your own with just a 5% deposit – and pay zero lenders mortgage insurance (LMI).

The savings on LMI alone can be worth tens of thousands of dollars.

The real clincher is that it can take far less time to save a 5% deposit compared to pulling together a 20% deposit.

And right now, time kind of matters.

Home prices are projected to increase by 5.8% over the next 12 months, according to CoreLogic .

HGS places are limited

Given the potential benefits, it’s no surprise that over 230,000 first home buyers have already taken advantage of the HGS to achieve their goal of home ownership.

However, only a limited number of HGS spots are available each year.

That’s why it’s so exciting to see the extra 50,000 places become available on 1 July.

These spots are spread across three different guarantees – 35,000 places for the First Home Guarantee, 10,000 for the Regional First Home Buyer Guarantee, and 5,000 for the Family Home Guarantee aimed at single parents.

The fine print

The HGS does come with eligibility criteria .

If you’re unsure whether you’re eligible, get in touch and we can let you know if you’re eligible straight away.

As a quick guide, singles have an income limit of $125,000, or up to $200,000 combined for a couple (this includes mates or siblings buying together).

If your income is above this, the Albanese Government has pledged to expand the HGS by scrapping home buyer income limits in 2026.

While the HGS also sets property price limits (these vary according to location), the scheme gives you the freedom to choose a new or established home, a house-and-land package or even an off-the-plan apartment.

Get in touch

Not surprisingly, HGS places can fill up fast.

So if you don’t want to miss out on your spot, get in touch to find out if you’re eligible for this popular scheme that lets you buy with a 5% deposit and pay zero LMI.

How to make an offer on a home

Thu, 03 Jul 2025 00:30:31 GMT

Got your eye on a place?

Finding the property that’s right for you and your budget is an exciting milestone! But what happens next? We explain how to make an offer and seal the deal.

Most of us buy a home only a handful of times in our lifetime.

So it’s not surprising that plenty of buyers – from first-timers to home owners who purchased several years ago – are uncertain about the buying process.

If you’re in the dark about how to make an offer on a property, read on as we break down the steps that can take you from house hunter to proud owner.

1. Talk to us first

Before you make an offer on a home, you should be confident that you can actually follow through with the purchase.

That’s why it’s important to call us first.

We can explain your borrowing power, which together with your deposit, sets your buying budget.

While some people prefer to have home loan pre-approval lined up before they start home-hunting, it’s not absolutely necessary.

Once you’ve found the right property, however, you’ll likely want to get the ball rolling on the finance side of things straight away.

That way your home loan can be ready in time for settlement.

2. Ask for a copy of the contract

When you see a place you’re keen to buy, you can ask the selling agent for the sale contract.

Then you can have it checked out by your solicitor or conveyancer.

This shouldn’t take long. But it can alert you to any conditions that work in the seller’s favour and not yours.

Any out-of-the-box conditions, such as a quick settlement, may not be a deal breaker – they may even be used as a bargaining chip in your price negotiations.

3. Know the market

By now you will likely have checked out plenty of properties and carefully researched the local market.

This will give you an idea of what similar homes in the area are selling for.

These insights can give you an idea of what is a reasonable offer for the home you’re thinking of buying.

4. Consider trying for a discount

Even if you think the property is fairly priced, it could still be worth trying for a discount.

As a guide, Cotality says sellers are currently accepting a median discount of about 3.4%.

On a home priced at, say, $600,000, that can add up to a saving of $20,400.

But it does depend on the local market. Some areas are hotter than others.

The main point is to stay within your buying budget.

5. Put your offer in writing

When you’ve arrived at a price you’re comfortable with, put your offer in writing. It shows you’re a serious buyer.

What follows may be some to-and-fro in price negotiations.

When you and the seller reach a price you’re both happy with, you may be asked to pay a small holding deposit , often around 2.5% of the purchase price.

This is not the same as the 10% you will usually be asked to pay when you and the seller sign the contract of sale to cement the purchase.

Be sure to call us when your offer is accepted. We can confirm details of the property with your home loan lender and begin the process of finalising your loan.

6. Exchange contracts

It can take a few days for the sale contract to be finalised.

Use this time to check with the selling agent how you should pay the 10% contract deposit.

When the contract is ready, you and the seller each sign a copy, then swap – or ‘exchange’ – contracts. Now’s the time to hand your 10% deposit to the selling agent.

As your broker, we’ll stay in touch throughout the process.

7. The road to settlement

It generally takes 30–90 days for the sale to settle – that’s when the property is transferred into your name.

During this time, we’ll work behind the scenes to help ensure your home loan is ready to go on settlement day.

And when you receive the keys to your new home, we’ll be in touch to help you celebrate!

Want to find out more?

Buying a home can seem complex (and scary). Rest assured though that we can help break down the steps involved.

Call us to find out other ways we can help streamline your home-buying journey.

Welcome back! Home lending jumps as first home buyers return

Thu, 03 Jul 2025 00:30:24 GMT

What improvements would you make to your home?

Here’s some warming news for winter – first home buyers are making a welcome return to the property market. Several factors suggest the stars may have aligned to make now a good time to take that first step on the property ladder.

Growing numbers of first home buyers are entering the housing market, with NAB reporting lending to first home buyers has climbed 16% since February.

It’s a big jump, and while the figures are based on data from just one lender, there are several good reasons why first home buyers are heading back to the market.

To begin with, consumer sentiment is rising as cost-of-living pressures start to ease.

There is also more confidence about ongoing interest rate relief: two-thirds of Australians expect home loan rates to be the same or even lower in a year’s time.

Plenty of the big banks agree . Westpac, for instance, expects two more rate cuts this year , with more to follow in 2026.

But there are other reasons why the time may be right for many first home buyers.

Home prices expected to rise

This month saw the Westpac–Melbourne Institute Index of House Price Expectations surge to its highest level since 2013.

Put simply, more than three-quarters of consumers expect property prices to rise over the next 12 months.

These expectations may not be far off the mark.

CoreLogic reports that while home price growth has slowed overall , the rise in housing values is being led by the lower-priced sections of the market – which tend to be first home buyer territory.

The upshot is that if you’re home loan-ready, buying a place of your own today might mean paying less than if you hold off for a few months.

Help available for first home buyers

Housing affordability can still be a challenge for many first home buyers.

The good news is that first home buyers can tap into a wide range of support to help buy a place of their own.

Various states have schemes to help first home buyers, including stamp duty exemptions/concessions or first home buyer grants .

These can really help give you a leg up, so talk to us to know what’s available in your area.

If you’re struggling to grow a deposit, ask us about the Home Guarantee Scheme . It enables first home buyers to purchase with just a 5% deposit without having to pay Lenders Mortgage Insurance.

Listings are up

Winter can be a quiet season for property, but not this year.

According to CoreLogic, May saw a rebound in newly listed homes , with over 35,000 properties coming onto the market for sale in the four weeks to 1 June 2025.

This is giving first home buyers even more choice.

It could be your opportunity to find the property that is right for your needs and budget.

Have the stars aligned for you?

With so many potential upsides to take advantage of, it’s worth having a chat with us to know if you are in a position to buy your first home.

Get in touch and we’ll help you assess your borrowing power and let you know if there are any first home buyer schemes you may be eligible for to help you buy sooner.

Australian home price average tops $1 million

Thu, 12 Jun 2025 04:57:32 GMT

To buy, or not to buy…

Property values nationally have passed a major milestone with the average home price pushing through the $1 million mark for the first time ever. Have you been putting off buying? If so, here’s how to get the ball rolling.

Despite a cost-of-living crunch and several years of high interest rates, the Australian property market continues to break records.

New figures from the Australian Bureau of Statistics (ABS) show home prices recently passed a key benchmark.

The average home price nationally is now $1,002,500 – the first time it has topped $1 million.

Here’s what it means for home buyers.

Average home prices vary by location

According to the ABS, a 0.7% rise in home prices nationally in the March 2025 quarter helped push the average price over the $1 million threshold.

National numbers don’t always show the full picture though, and average home prices continue to vary widely between states.

New South Wales has Australia’s highest average price of $1,245,900.

That’s followed by Queensland ($944,700) and the ACT ($941,300).

There’s not much separating average home prices in Victoria ($899,700), Western Australia ($874,200) and South Australia ($861,900).

At the other end of the spectrum, Tasmania ($670,200) and the Northern Territory ($517,700) continue to be the more affordable states for housing.

How are home prices likely to move from here?

While the ABS data only extends to the end of March 2025, figures from CoreLogic show home prices have continued to climb higher .

We’re even seeing a recovery in property values in areas such as Darwin, Hobart and Canberra , where price growth has been comparatively low in recent times.

One of the key drivers for all this growth has been lower interest rates, which PropTrack says have improved market sentiment, boosted borrowing power and buoyed buyer confidence .

Why buying now could be a good time

If you’re thinking of buying a home, chances are you’re wondering “will home prices keep rising?”

While it’s impossible to accurately predict the future, the general view appears to be that home prices are set to head higher.

CoreLogic says the recent May rate cut is likely to have a “positive influence on housing values in June and through the rest of the year”.

Meanwhile, the outlook from the team at PropTrack is that we are likely to see further price growth through the remainder of 2025 based on tight housing supply, targeted buyer incentives (such as first home buyer schemes) and population growth.

Talk to us to get the ball rolling on your purchase plans

They say the right time to buy a home is when you’re ready.

But how do you really know when that is?

If you’re interested in finding out, talk to us to understand your borrowing power, and get the ball rolling on a home loan that matches your needs.

How you could boost your home’s value by $118,000 (and save on bills)

Thu, 05 Jun 2025 01:59:47 GMT

What improvements would you make to your home?

With winter temps falling, chances are your power bills will rise. This helps explain why buyers are willing to pay 14% extra for energy-efficient homes on average. Here’s how to give your place a ‘green premium’.

There’s a lot to love about winter. Cosy nights in, warming mugs of hot chocolate, and maybe a trip to the snow.

The downside is bigger power bills.

With energy costs set to climb higher across many parts of the country, it’s not surprising that home buyers are increasingly looking for properties that deliver savings on power bills.

And new research by Domain shows buyers are willing to pay 14.5% more for energy-efficient houses and 12% more for energy-efficient apartments on average – that equates to about $118,000 and $75,000 more, respectively.

Here’s how to give your place an energy-efficient makeover.

Our homes can be energy guzzlers

According to Domain’s latest Sustainability in Property report , Australian homes consume around one-quarter (24%) of the nation’s electricity.

It’s not because we forget to turn the lights off.

Experts say most Aussie homes have “poor thermal performance”: our homes swelter in summer and shiver in winter.

So, we turn to energy-hungry appliances to stay comfortable.

Energy-efficient homes do the opposite. They reduce power consumption to save on energy bills, and enhance livability.

Yet one-in-four Australians currently live in a home with zero energy-efficient features .

What buyers want and what adds value

Solar power, passive design elements and double-glazed windows consistently rank among the most sought-after features, delivering both lifestyle advantages and lower household running costs, according to Domain.

North-facing homes also command a premium price tag as they provide maximum exposure to natural light and warmth during cooler months, and only 15% of Australian homes have a north-facing orientation.

However, energy-efficient home improvements don’t have to be complex (or impossible, for those of you who don’t have a north-facing house).

Something as simple as roof and ceiling insulation can cut heating and cooling costs by 45% .

Bigger investments, such as installing rooftop solar, can be more affordable with the help of government grants, rebates and subsidies.

And from 1 July 2025 the new Cheaper Home Batteries Program can reduce the cost of installing solar batteries by about 30%.

Talk to us to know what’s available

Whatever eco-features you consider, there are various ways you could fund your green improvements.

A home loan top-up with your existing lender could help free up additional funds.

Some lenders have ‘green loans’ specifically designed to fund energy-efficient improvements.

You could even save on interest by refinancing to a lower-rate home loan.

It can be a way to put your home equity to work while also increasing your home’s liveability and potentially its value.

So get in touch for help funding a toastier winter and more pleasant summer.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

RBA cuts the cash rate for the second time this year to 3.85%

Sat, 31 May 2025 05:44:11 GMT

Find out how this might impact your home loan

Australian borrowers have received another reprieve with the Reserve Bank of Australia (RBA) today cutting the cash rate by 25 basis points to 3.85%. How much could this decrease your monthly mortgage repayments?

This is the second cash rate cut in 2025, as the RBA attempts to ease cost-of-living pressures on Australian families.

RBA Governor Michele Bullock said in a statement that the Board was satisfied that the risks to inflation had recently become more balanced.

“With inflation expected to remain around target, the Board therefore judged that an easing in monetary policy at this meeting was appropriate,” Governor Bullock said.

How much might your mortgage repayments now decrease?

Unless you’re on a fixed-rate mortgage, hopefully your bank will soon follow the RBA’s lead and decrease the interest rate on your variable home loan.

For an owner-occupier with a 25-year loan of $500,000 paying principal and interest, this month’s 25 basis point rate cut means your monthly repayments could decrease by about $77 a month.

That would put $924 a year back into your household budget.

If you have a $750,000 loan, your monthly repayments will likely decrease by about $115 a month – or $1380 per year.

Meanwhile, a $1 million loan could decrease by about $154 a month – or $1848 a year.

This all assumes that your lender automatically passes on the full 25 basis point cut to your home loan.

Another thing to consider is that not all lenders automatically reduce variable home loan repayment amounts in line with rate cuts.

To find out what your lender is doing with your loan, get in touch with us in a few days once the dust has settled.

Feeling the strain of your mortgage? Let’s talk

Even with this latest rate cut, many Australian households are still grappling with living costs and interest rates that are higher than when they first took out their home loan.

If it’s been a while since your last home loan review, now could be a good time to check in. You might be able to improve your situation – and we’re here to help you explore your options.

This could include renegotiating with your current lender, refinancing to another lender, or debt consolidation.

Every household is unique, and we’re committed to helping you find a solution that fits your needs.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Fact or fiction: do property values double every 10 years?

Sat, 31 May 2025 05:44:09 GMT

Ever heard this one before?

It’s a common belief that real estate values double every decade. But is this true? New research reveals how much home values have increased over the past ten years.

It’s no surprise that something as big as Australia’s $11 trillion housing market has generated its fair share of myths and misconceptions.

Chances are you’ve come across a few yourself – maybe along the lines of ‘great houses sell themselves’, ‘the listing price is non-negotiable’, or ‘you need a 20% deposit to buy a home’.

One comment we often hear wheeled out at social gatherings is that property prices double every 10 years.

But how accurate is this? Here’s the latest research.

How has the property market performed recently?

Looking back over the past year, home values have climbed 3.2% nationally to $825,000 , adding about $25,000 in value to the average Aussie home.

Stretching the lens out further, CoreLogic says that in the past five years, property prices have increased 39.1% – an upswing that’s added around $230,000 to Australia’s median home value.

So do values double every 10 years?

It turns out that over the decade to April 2025, home values have, broadly speaking, fallen short of doubling.

Data from CoreLogic shows that on a national basis, property prices have climbed 67.3% in the past 10 years (certainly nothing to sneeze at, though!).

Here are the gains each capital city has made over the past decade:

– Adelaide: 93.6% (the capital city closest to doubling)
– Brisbane: 91.2%
– Hobart: 86.4%
– Sydney: 61.6%
– Canberra: 60.7%
– Perth: 55.6%
– Melbourne: 43.8%

Only one city – Darwin – saw a decline in values (-0.5%) over the past 10 years.

Bear in mind that in some cities with average higher property prices, such as Sydney and Melbourne, some home owners may have pocketed bigger gains in dollar terms as a result of price rises over time, despite the smaller percentage gains.

Time to dispel another myth

The same CoreLogic data seemingly busts another myth – the one about home values across our major cities being more likely to notch up bigger gains than regional properties.

Since 2015, home prices have come closest to doubling in country New South Wales (up 97.5%), regional Tasmania (96.1% higher) and regional Queensland (up 91.5%).

All told, property prices across the nation’s combined regional markets are 87.5% higher than they were 10 years ago, compared to 61.7% gains across our combined capital cities.

Once again, though, keep in mind that capital city properties ($905,000 median value) are often worth more than regional properties ($673,000 median value), and therefore could realise higher gains in dollar terms, despite smaller percentage gains.

The bottom line

Generalisations may make for great barbecue conversations.

But when it comes to major financial commitments such as buying a home, it pays to stick to the facts.

Many locations and individual properties haven’t – and quite possibly never will – double in value every ten years.

That doesn’t mean that your home won’t enjoy significant gains in value over time.

Add in a home loan that’s right for your needs, and home ownership can make a valuable difference to your personal wealth.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Plot twist: home owners keep repayments on hold as rates fall

Thu, 29 May 2025 01:49:15 GMT

Did you reduce your monthly repayments?

Despite two much-awaited rate cuts this year, plenty of Australian households are keeping their mortgage repayments on hold – and it could see them save in long-term interest costs.

2025 is shaping up to be a much better year for borrowers than 2024!

Already, we’ve chalked up two rate cuts, and some experts are predicting there are more to come .

It’s an encouraging sign that the worst of the cost-of-living crunch may be behind us.

But there’s an unexpected twist.

Instead of taking up the short-term savings offered by recent rate cuts, 86% of variable rate borrowers with one particular lender have kept their minimum monthly home loan repayment amount at the pre-rate cut level.

It’s a simple step that could save on loan interest and help home owners pay off their mortgage sooner.

Monthly savings of $160-plus

The recent rate cuts may have released the pressure valve for many home owners.

For the average $500,000 home loan , February’s 0.25% rate cut could have lowered monthly repayments by up to $80.

The second rate cut in May could have trimmed a further $80 from monthly repayments.

That’s a total of up to $160 wiped off repayments in the space of just four months

Yet it seems few home owners are reaching out to their lender to reduce their minimum monthly home loan repayment amount.

Really? Why’s that?

The Commonwealth Bank, which accounts for around one in four Australian home loans , says only one in seven (14%) of its variable rate home loan customers reduced their loan repayments following the February rate cut.

The majority simply stayed with their existing repayment amount.

Now, it’s important to note here that the Commonwealth Bank and many other lenders don’t automatically reduce your minimum monthly repayments when they follow the RBA’s lead and cut the interest rate on your home loan.

Instead, they may maintain your repayment amount at the old level.

This means that more of your money goes towards paying off the principal (rather than the interest) each month.

That said, you can ask your lender to reduce your repayment amount in line with their cuts.

Or you may find your particular lender has already automatically reduced your minimum monthly repayment in line with rate cuts.

It’s worth double-checking what your lender has done, and if in doubt, get in touch with us.

How much could you save?

If your finances can handle it, leaving your minimum monthly repayment amount unchanged when rates head south can be one way to help pay more off your loan each month.

To see just how much you could save on interest over the long term, we crunched the numbers for a $500,000 home loan assuming today’s average variable rate of 6.42% , and a 25-year term.

By sticking with the same, pre-rate cut repayments for the remainder of the loan (remember, that’s the equivalent of paying $160 extra each month), a borrower could cut over $61,000 from their long-term interest bill.

Better still, it could mean the home loan is fully paid off 2.5 years ahead of schedule.

And if rates fall further, the time and cost savings could be higher.

Call us to find out how much you could save

If you can afford it, it could be worth thinking about leaving your home loan repayment amount on hold, even if your lender cuts their rates.

Of course the savings you could enjoy with this strategy depends on the size of your loan and the current rate you’re paying.

To get more clarity on your home loan, give us a call.

We’ll explain the rate you’re paying, and do the sums for your loan to let you know how much you could save by leaving all, or even part, of your repayments unchanged.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Albo re-elected: what’s on the board for home buyers and owners?

Wed, 28 May 2025 23:08:44 GMT

Here’s what’s been promised

The votes have been cast and it’s clear Labor will hold the reins of federal government for another 3-year term. We look at what this may mean for first home buyers and current home owners.

As the election dust settles, it’s time to get back to business as usual.

But there could be a few changes on the horizon depending on whether you’re planning to buy a first home or you’re already a home owner.

But first, where is the property market currently at?

As we approach the mid-point of 2025, the property market is still notching up gains .

Home values nationally rose 0.3% in April, taking Australia’s median home price to a new record high of $825,349.

For that amount, mustering up a 20% deposit calls for savings of around $165,000.

But you may be able to buy with less under a number of Labor election promises and initiatives.

5% deposit scheme to be expanded

The Home Guarantee Scheme (HGS) already offers an opportunity for eligible first home buyers to get into the market with just a 5% deposit and zero lenders mortgage insurance.

From January 2026 the scheme will be expanded.

Every first home buyer will be eligible to purchase a home under the HGS, with income caps for applicants to be scrapped, property price limits to be increased, and the removal of caps on the number of people who can apply for the scheme each year.

Increased supply of new homes just for first home buyers

CoreLogic points out that first home buyer incentives often do very little to improve housing affordability .

In fact, they can push up property prices by boosting demand.

A potential long-term fix is to build more houses.

Labor has promised to help ease pressure on demand by investing $10 billion in building up to 100,000 homes reserved exclusively for first home buyers .

The Grattan Institute crunched the numbers, finding that if all 100,000 homes are built, house prices could soften by up to 2.5% , potentially offsetting any possible price increases from the expanded Home Guarantee Scheme.

Help to Buy shared equity scheme

The Albanese government has pledged to go ahead with its Help to Buy scheme for first home buyers.

The idea is that the federal government will chip in as much as 40% of the cost of a first home while buyers need as little as a 2% deposit.

Help to Buy has been a slow burn, having been part of Labor’s 2022 election platform . The delay in its rollout is partly due to each state and territory government needing to pass its own legislation to make Help to Buy a reality.

It’s a case of ‘watch this space’ to know when the scheme will finally get off the ground in your state or territory.

Current home owners can soon access cheaper batteries

One in three Australian households now have solar, but only one in forty households have a battery.

That could soon change, with current homeowners being able to access the Cheaper Home Batteries Program from 1 July 2025.

It’s hoped that the subsidy program will push down the cost of buying and installing a household solar battery by 30% – or about $4000 per battery – and help households reduce reliance on the grid.

The government estimates that homes with existing rooftop solar could save up to $1,100 on their annual power bill.

Talk to us to know how you could benefit

With a range of schemes and benefits up for grabs, it can be tricky to work out what you may or may not be eligible for.

From buying a first home, to making your current home more eco-friendly, we can guide you through the funding solutions to help you achieve your property goals.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Myth buster: do weekly repayments pay off an offset loan faster?

Wed, 28 May 2025 23:08:41 GMT

Have you got an offset account?

The body content of your post goes here. To edit this text, click on it and delete this default text and start typing your own or paste your own from a different source.

Could US tariffs be good news for Aussie home owners?

Wed, 30 Apr 2025 02:05:32 GMT

Here’s what economists are predicting

Tariff-triggered cuts to interest rates could be just around the corner, with Australian borrowers the likely winners if they come to fruition.

US trade policies have hit media headlines this month following Donald Trump’s controversial tariff announcements on 2 April.

The flow of tariff announcements coming out of the US has rattled share markets globally, driven by uncertainty plus fears of an economic slowdown in the US .

However, there may be a silver lining to the tariff cloud for Australian home owners.

All four of Australia’s major banks are predicting solid cuts to interest rates – and they could come sooner rather than later.

Here’s what the big banks are saying could happen.

The cash rate could fall to 3.35%

NAB believes the Reserve Bank of Australia (RBA) is likely to act quickly, with a 0.5% rate cut in May , followed by 0.25% cuts in July, August, November and even February 2026.

Over at ANZ, the forecast is for the RBA to cut the cash rate by 0.25% in May , followed by 0.25% cuts at its July and August meetings.

That could see the cash rate drop to 3.35% by August, down from 4.1% at present.

Meanwhile, the experts at Westpac expect three more 0.25% rate cuts this year.

And the CommBank view is that the RBA will likely cut rates by 0.75% in total by year’s end, adding that “ a rate cut in May is a done deal ” depending on inflation figures.

No guarantees

Given the fast-moving tariff situation, it’s no surprise all four big banks have highlighted that their rate forecasts are not set in stone.

And of course, it’s the RBA that calls the shots on the cash rate.

On that front, the RBA isn’t giving much away.

In its latest (April 15) Board meeting, the RBA kept rates on hold, saying it wanted to wait and see how US trade policies could impact the Aussie economy, job market and its arch-enemy – inflation.

We won’t know how inflation is tracking until 30 April when the latest figures come out – about a fortnight before the RBA meets again on 19-20 May.

Long story short, it’s a case of ‘watch this space’ – for a few weeks at least.

Building costs could rise

A downside of US tariffs is a possible impact on new home building costs.

If Australia ends up facing higher prices for materials used in construction, we could see price increases for new home builds and renovations .

So it’s worth speaking to us about your borrowing power if you’re planning a big construction project in the near future.

Could you make a rate cut of your own?

If the major banks are right, we could see rates start to fall as soon as next month.

But home owners may be able to enjoy a rate cut of their own even earlier.

Plenty of lenders are offering home loan rates that start with a 5 .

That provides lots of potential for you to save by switching to a new loan. It could also be an opportunity to enjoy improved loan features.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Election 2025: what’s on offer for first home buyers?

Tue, 29 Apr 2025 23:39:29 GMT

Housing affordability is shaping as a key issue

Australians will head to the polls on May 3, and with housing affordability shaping up as a key election issue, we unpack how the two major parties are pledging to help first home buyers.

Housing affordability has reached boiling point.

Both Labor and the Coalition agree on this.

But they’re offering different solutions for first home buyers.

As polling day approaches, we break down what’s up for grabs as the major parties face off on support for first home buyers.

First up, the incumbent: Labor

It’s estimated that housing demand could exceed supply to the tune of 163,400 dwellings between now and 2032 .

Labor is pledging to invest $10 billion towards building up to 100,000 homes exclusively for first home buyers .

Labor is also promising to make it easier for first home buyers to get into the market by expanding the First Home Guarantee scheme.

This would allow more first home buyers to purchase a home with just a 5% deposit and zero lenders mortgage insurance (which can be a big saving for first home buyers).

At present, first home buyers face income limits to be eligible for the 5% deposit scheme.

Labor is pledging to scrap the income limits so that all first home buyers would be eligible, regardless of income.

There would still be caps on the maximum price you could pay for a home under the scheme, but the price limits would be increased if Labor is re-elected.

Labor has also promised to expand eligibility for its Help to Buy scheme – where the government would cover up to 40% of a home’s cost that first home buyers can buy out at a later date.

The Coalition – a tax break for home loan interest

The Coalition is pledging to introduce a new First Home Buyer Mortgage Deductibility scheme.

This would allow first home buyers to claim their home loan interest as a tax deduction.

There are strings attached.

You would need to buy or build a brand new home, and you could only claim a deduction on the interest that applied to the first $650,000 of your home loan – and only for the first five years.

The proposed scheme would only be available to individuals earning up to $175,000 annually, or up to $250,000 for joint buyers.

Like Labor, the Coalition is also planning to fine-tune the 5% deposit First Home Guarantee scheme.

If elected, it promises to increase the income limit for buyers to be eligible for the scheme while also raising the property price limits.

In addition, there would be no maximum limit on the number of first home buyers who could access the scheme each year.

The Coalition is also promising to allow first home buyers to use up to $50,000 of their superannuation to buy a home .

Under the policy, the $50,000 would need to be returned to the superannuation account when the house that was purchased using the super funds was sold.

Want to know more?

Buying a first home can be daunting.

So it’s good to know you can rely on our support no matter who wins the federal election on May 3.

Contact us today to learn more about the home buying process, and discover the range of first home buyer incentives that you may be eligible for right now.

Home owners notch up gains of $230,000 in just 5 years

Tue, 29 Apr 2025 23:39:27 GMT

Want to put that equity to work?

Did you know that the average home owner saw their property’s value rise $46,000 per year over the past five years? Today we’ll look at ways you could put that recent increase in equity to further use.

The five years since 2020 have seen plenty of action.

From the pandemic (let’s not go there again), through to a change in government, and some notably wild weather events around the country, there’s been no shortage of highs and lows.

Chances are, you’ve seen a few changes of your own. Maybe a new career or the arrival of a new family member.

Through it all, your home’s value has likely been steadily rising in the background.

Gains of 39% in five years

The latest data from CoreLogic shows home values nationally have surged 39.1% over the past five years to a median value of $820,331 .

Translated to hard coin, that means an extra $230,000 has been added to the median home value.

But here’s the thing.

While a 39% gain is impressive, it’s actually pretty modest compared to the percentage gains of earlier periods.

In Sydney, for instance, home prices grew 78% in the years between 1998 and 2003.

In Melbourne, home values jumped 79.5% in the early 2000s.

Meanwhile, cities such as Brisbane, Adelaide, Perth, Hobart and Canberra experienced their largest five-year gains through the mid-2000s, with values across these markets roughly doubling over the period.

What’s different this time around is that home values are higher than in the past.

That means while the latest increase has been “mild in percentage terms”, according to CoreLogic, the $230,000 average dollar value of current price gains “far outperforms historic peaks”.

For example, by comparison, the dollar rise seen over the five-year 80% national increase to December 2003 was roughly $90,000 less, at $140,000.

Putting equity to work

An increase in your home’s value can be worth more than bragging rights at your next BBQ.

It could be that you have considerable home equity. That’s the difference between your home’s market value and the balance remaining on your home loan.

Home equity is more than just a number. It can also be a valuable resource.

It may be possible, for example, to put home equity to work to achieve personal goals – anything from completing renovations, buying an investment property, refinancing to a lower interest rate, or just taking a well-deserved family holiday.

To find out how to tap into your property’s equity, get in touch with us today and we’ll run you through the numbers.

Why 1-in-2 families are thinking of refinancing

Tue, 29 Apr 2025 23:39:21 GMT

The RBA may have swiped left on an April rate cut, but plenty of home owners are taking matters into their own hands by refinancing to save on interest with a lower rate.

There’s nothing like a rate cut to put a spring in home owners’ steps.

February’s 0.25% rate cut , for instance, saw consumer sentiment jump to a three-year high .

But with the Reserve Bank of Australia (RBA) keeping rates on hold in April, and no chance of another cash rate cut until 20 May, many home owners are taking a do-it-yourself approach and cutting their home loan rate by switching to a new loan or lender.

A Canstar survey found more than one in two (55%) variable rate borrowers are considering refinancing, while one in seven (14%) have already made the move over the last 12 months.

The potential to pay a rate starting with a ‘5’

When did you last review your home loan?

According to Finder, variable and fixed mortgage rates have dropped to their lowest levels since early 2023 , and loans with rates below 6% are “flooding the market”.

More than 30 lenders are offering at least one variable rate under 5.75%, according to Canstar .

Despite this, the average owner-occupier variable rate is still sitting at about 6.44% ( Mozo stats ).

That suggests to us that there are plenty of borrowers who could be paying more interest than necessary each month.

Fixed rates are also heading south

It’s not just variable rates that are falling.

Mozo reports a whopping 39 lenders cut some or all their fixed options in March.

And you don’t have to lock in for a long period; a number of one-year fixed rates are also competitive at present.

Question is, how much can you really save by refinancing?

The potential to save over $12,000 in just 2 years

Canstar crunched the numbers and found that a complacent borrower who hasn’t refinanced in a while could be on a variable interest rate of about 6.86% at present.

However, let’s say that same borrower refinanced a $600,000 loan down to an interest rate of 5.74% – that could potentially save them more than $12,000 in interest over the next two years.

Even if your current rate is at 6.06%, Canstar says refinancing to 5.74% could still see you save almost $3,000 in interest over the next two years.

Of course, exactly how much you could save by refinancing depends on the rate you’re currently paying.

That makes it worth giving us a call – we can put you in the know with figures tailored to your situation.

Why wait for an official rate cut?

We could all do with lower home loan repayments.

And with no guarantees that the RBA will cut rates further any time soon, it might be worth taking a look to see if you could save by switching.

Remember too, that refinancing isn’t just about trying to pay a lower interest rate.

It can also be an opportunity to tap into new loan features, or access home equity to achieve personal goals such as buying an investment property or renovating your home.

So if you haven’t refinanced in a while, give us a call today and we’ll walk you through your options.

Sounds of silence: how traffic noise can impact property values

Thu, 27 Mar 2025 22:13:00 GMT

How close is too close?

‘Close to public transport’ is often touted as a plus for home buyers. But new research shows just how much close proximity to a busy road, railway or flight path can impact property values.
Location, location, location.
When you’re hunting for a new home, most people are on the lookout for an abode that’s close to public transport and other convenient transport infrastructure.
But how close is too close? And can an increase in transport noise result in a decrease in property value?
New research by PropTrack and Ambient Maps suggests so.

How much can traffic noise impact property prices?

The study analysed noise pollution across Victoria from busy roads, railways and air traffic. Then it measured those findings against nearby property sale prices over a five-month period.
Here’s how the findings stacked up for every 10 decibel (dBA) increase in noise:
Roads: an average decrease in property value of 6% was seen for every 10 dBA increase in road noise.
Rail: an average decrease of 4% was seen for every 10 dBA increase in rail noise (even after accounting for the benefits of the convenience of living near a train line).
Aircraft: an average decrease of 6-9% for every 10 dBA increase in aircraft noise. Given that properties outside the flight path can experience noise levels that are 20 dBA less than those within the flight path, the difference in property value may be significant.
By way of example, a 5% decrease on a $1 million property is about $50,000.

What does a difference of 10 dBA sound like?

Included in the study on page 8 is a neat little graphic that illustrates the differences between a 45 dBA home, all the way up to a 75 dBA home.
We’ll do our best to describe it to you below if you can’t click the link above:
45 dBA home: Located in a quiet cul-de-sac with no through traffic and no public transport nearby.
55 dBA home: A home in a two-way suburban street with minimal traffic passing by.
65 dBA home: Located on a main road with four lanes of traffic and public transport such as a bus or tram regularly passing by.
75 dBA home: Located on a six-lane arterial road, with trucks, buses and plenty of cars travelling along it.

The silver lining of it all

Sure, owning a property close to a busy road, train station or flight path could impact your home’s long-term investment value.
But it can also allow you to break into the property market in a home that’s a great fit for your family sooner.
There are also lots of ways you may be able to help soundproof your home, such as double glazing, sealing gaps, solid core doors, soundproof curtains, insulation and even soundproof panelling.
The main thing to be aware of when you’re buying a home: don’t let the “location, location, location” sales pitch twist your arm into overpaying – especially if noise becomes a factor.
So if you’re currently in the market to buy, get in touch with us today and we’ll assess your borrowing power to help give you a better idea of what you can afford. Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

5 fun (and budget-friendly) ideas for an Easter staycation

Thu, 20 Mar 2025 01:28:00 GMT

Who needs a break?

This Easter offers more than chocolate eggs and hot cross buns. It brings a rare mega-holiday, and if your budget doesn’t stretch to a trip away, check out our tips to enjoy a memorable getaway – at home.
Fun fact: 2025 sees the Easter public holidays fall in the same week as Anzac Day.
That means that from Good Friday on 18 April through to the Anzac Day weekend starting Friday 25, you could score a 10-day break and only use three days of annual leave.
This meshing of Easter and Anzac Day has only happened 17 times in the last century and just five times this millennium.
Why waste the opportunity? Time to start booking leave.
Don’t have the cash for an expensive holiday? No problem.
If your budget is tight, or pet obligations keep you at home, check out our top tips for an exciting staycation at home.

1. Prepare your home in advance

Prepare your home as if a special guest was arriving, only the special guest is you!
Give the place a thorough clean, stock the bathroom with clean towels, have fresh sheets on the bed.
Tuck away anything that will break the holiday spell – from the lawn mower to paperwork for bills.
Sure, it’s not the “fun” part of the holiday.
But it will make the next 10 days feel a little less cluttered and give you more space to stretch out, kick back and relax.

2. Stock the fridge or whip up a feast

Great food is always part of a great holiday. And a staycation is no exception.
Indulge yourself by stocking the fridge with the food and drinks you would normally reserve for special occasions – artisan cheeses, special cuts from the butcher or that $10 sourdough you’ve always wanted to try.
Alternatively, dust off the kitchen apron and try your hand at a dish or two you’ve always wanted to cook, but never had the time to do so. One cheap and easy win is breakfast crepes – they only cost a few dollars to make and the whole family can have fun trying to flip them.

3. Explore (and support) your local neighbourhood

Chances are your local area has plenty of hidden gems you’ve never had time to try out.
Here’s your chance to explore them.
Check out that new café, head off on a bike ride you haven’t experienced before, or take the yoga class you’ve never got around to.
The main point is to leave the normal routine behind. Unwind and let yourself meander around locally at your own leisurely pace.

4. Go backyard camping

Who needs an expensive caravan?
There’s something about camping that kids love – from pitching tents to cosying up in a sleeping bag.
Use your staycation to set up a family backyard sleep out – complete with a contained mini firepit (that you can buy from Bunnings) to roast some marshmallows while teaching the kids about the star constellations.
If your home is an apartment, create an awesome indoor camp-out by gathering up sheets and pillows to build a snug blanket fort.
Turn off the lights, flick on the torches, and bring the outdoors inside with picnic dinner on a blanket on the floor.

5. Be a tourist in your own city

Ever noticed that overseas tourists often experience all the sights that locals don’t have time to?
A staycation is a great opportunity to tick through the tourist bucket list and see what overseas visitors rave about.
Head to museums, galleries and cathedrals (many offer free or low-cost entry) and soak in whatever your state capital has to offer.
A quick Google search of “What’s on in [your neighbourhood]” should also give you plenty more inspiration.
Don’t forget to grab a souvenir – maybe a fridge magnet or mug, as a memento of the special time you got to know your city a little better.

Relish everything your home has to offer

In the day-to-day rush of our lives, it can be easy to overlook that our home is our personal sanctuary. A place to enjoy downtime, relax and unwind.
Make the most of your home through the upcoming mega-holiday, and you could make amazing memories while not forking out the type of money you’d have to for a trip away from home.
Talk to us today for more ideas on making the most of your home – and home loan. Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Low cost renos to help keep your home cosy this autumn

Thu, 13 Mar 2025 00:28:00 GMT

Brace yourself, winter is coming…

It’s been a long, hot summer, but the seasons are shifting and it’s time to prepare for the cooler months ahead. A few simple improvements could help keep your home snug without overheating your power bills.
It’s almost time to pack away the boardies, swap sarongs for sweaters and cross from cricket to footy.
As we prepare for the cold to creep in, it may also be time to show your home some love.
A few budget-friendly improvements can make your home a haven of winter warmth, with the added plus of keeping heating bills down.
Here are three low cost renovation ideas to get you started.

1. Keep the cold out and the warm in

Fun fact: as much as 25% of winter heat loss can come from draughts (officially known as ‘air leakage’).
A simple but effective home renovation project is to find and fix gaps that are letting in cold air.
Energy Australia suggests installing door seals, and using a waterproof filler called ‘caulking’ to seal windows and around skirting boards.

2. Rethink home heating

Once your home is draught-proofed, it’s time to rethink home heating.
This can make a big difference to your hip pocket, because heating (and cooling) are the biggest energy guzzlers in Aussie homes , accounting for a whopping 40% of energy use.
So, if you’re planning to wheel out the trusty electric bar heater that has served you well for many years, it could be time to think again.
It turns out that reverse cycle air-conditioners are the most energy-efficient heater (and cooler) of all types, irrespective of fuel source.
Even an air con unit with a low efficiency rating (for example, 2 to 3 energy stars) can be significantly cheaper to run than other heating appliances.

3. Insulate

Wearing layers of clothing keeps us warm in winter. Yet we often leave our homes to shiver through the cold.
Adding insulation is the equivalent of wrapping your home in a warm woolly onesie. Except that it also helps your place stay cool in summer. What’s not to love?
Consumer group CHOICE says as much as one-third of an uninsulated home’s warmth is lost through the roof. So, if your budget is tight, insulating your roof cavity is a great first step.
If your budget extends further, or if you are building a new home, installing floor, wall and ceiling insulation can save hundreds of dollars on energy costs each year.

How to help manage the cost

Of course, it’s not too difficult to plan for small home improvements that can make your home more comfy in winter.
However, the reality may be that you need to foot the bill for a reno that’s a bit more substantial.
The good news is that your current home loan may provide a potential source of finance.
Or, we can explain other options such as a construction loan or renovation loan for bigger projects.
The main point is to talk to us today, and start taking steps to make your place warm and cosy this winter. Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Was that the shortest property downturn ever?

Thu, 06 Mar 2025 05:21:00 GMT

Have you been waiting for rates to drop?

The so-called market ‘downturn’ we saw over the last few months was a blink-and-you-miss-it affair. Home prices are once again on the up. We unpack what’s happening – and why now could be a good time to buy.
Jeepers. That didn’t last long.
Back in early January, CoreLogic declared Australia’s housing market had entered a downturn after property prices dropped -0.01% in November and -0.1% in December (followed by a -0.03% dip in January).
Fast forward to early March – just two months later – and CoreLogic reports “ Housing downturn reverses in February ”.
Have we just witnessed the shortest downturn on record? Or was it just a minor blip on the radar?
Here’s a closer look at what’s happening with home prices.

Lower rates have fuelled buyer confidence

When CoreLogic stated in January that “ the growth phase of the (property) cycle has come to an end ”, it had plenty of evidence to back up the claim.
Homes were taking longer to sell. Listings were up across the country, and buyer demand was stalling.
Events in February changed all this.
Expectations of a Reserve Bank of Australia (RBA) rate cut grew stronger, boosting buyer confidence .
Auction clearance rates improved , and the flow of freshly advertised ‘for sale’ listings slowed.
The much-anticipated 0.25% RBA rate cut , when it finally arrived, brought everything together to see home prices rise 0.3% in February, reversing the falls of the previous three months.

Will home prices keep rising?

According to REA Group , February’s rate cut not only lifted buyer sentiment, it also delivered an uptick in borrowing power and improved affordability.
And after a long period of higher rates, REA says buyers who held off purchasing are now re-entering the market.
Could this see home values continue to rise?
A lot hinges on interest rates.
The RBA has made it clear it’s in no great hurry to call further rate cuts , though that doesn’t mean it won’t happen.
NAB is predicting four more rate cuts over the next 12 months.
Westpac says rates could drop an additional 0.75% this year , and expects home prices to increase by 3% in 2025 , and by 7% next year.
AMP says Australia’s “chronic shortage of homes” could see home prices jump 3% this year .

Why now could be a good time to buy

FOMO (fear of missing out) should never be the main motivator for buying a home. After all, it’s probably the biggest investment you’ll ever make.
But as the last few months have shown, market downturns can be done and dusted in a matter of weeks, and sitting on the sidelines waiting for prices to fall can just mean paying more down the track.
Call us to know if you’re home loan ready right now, and we’ll get the ball rolling on a loan that matches your needs and budget. Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Major change coming to mortgage rules for university grads

Thu, 27 Feb 2025 00:50:00 GMT

Have you paid off your student loan?

Good news for the three million Australians who have a student debt. New rules are on the cards that could soon increase their borrowing power when applying for a home loan.
Heading off to uni can be a great investment in your skills and qualifications, potentially leading to a higher income over the course of your career.
The downside for many, though, is a lingering student debt.
More than just a balance to be repaid, a HECS/HELP debt can impact your ability to buy a home.
So, it’s great to hear that the federal government is pushing for lending rules to be loosened so that graduates have a better chance of getting started as home owners.

How a HECS/HELP debt can impact home-buying plans

Around 3 million Australians have an outstanding HECS/HELP balance.
HECS/HELP debts work differently from other types of debt – the balance doesn’t attract interest but it is indexed (typically upwards) each year in line with (the lower of) inflation or wages growth .
And unlike traditional debts, HECS/HELP repayments only kick in when graduates earn over $54,435 a year (2024-25 threshold), with a starting repayment rate of just 1% annually.
Sounds good, right? Well, here’s the thing.
University fees went up in recent years . And so did the indexation rate . Both of which have pushed up the average HECS/HELP debt.
This is hurting the borrowing power of many young university graduates who are trying to enter a property market that has also boomed in recent years.
That’s because under responsible lending rules, banks currently take a home buyer’s HECS/HELP debt into account – in much the same way as an outstanding credit card balance or car loan – when deciding how much they’ll lend.
Fortunately, that looks set to change.

New calls to loosen lending rules for HECS holders

Federal Treasurer Jim Chalmers recently called on financial regulator Australian Prudential Regulation Authority (APRA) to update its guidance to banks to make it easier for people with a HECS/HELP debt to take out a home loan by removing HECS/HELP debts from debt-to-income reporting.
Chalmers believes this would be a “commonsense” change, saying, “people with a HECS/HELP debt should be treated fairly when they want to buy a house and we’re working with the regulators to make sure they are.”
Meanwhile, the Australian Banking Association has said the potential to unlock more credit for prospective home buyers could assist them in realising the dream of home ownership.
Long story short, the government and bank regulators, including both APRA and ASIC, appear to be in agreement on making these changes promptly.
Of course, we’ll keep you in the loop with any updates, as changes could mean a generous uptick in your home loan borrowing power.

What it could mean for you

Having a HECS/HELP debt, or any other student debt, shouldn’t discourage you from exploring your home loan options if you’re keen to buy.
Get in touch to find out your borrowing power and discover if you’re home loan-ready today. Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

The scheme that’s helped 193,000 Aussies buy a first home

Tue, 18 Feb 2025 23:27:38 GMT

Do you want to buy in 2025?

If you’re in the market for a first home, there’s one scheme you should know about. It’s called the Home Guarantee Scheme, and it could slash the time it takes to buy a place of your own by several years. Here’s how it works.

Saving that all-important 20% deposit for a first home isn’t easy – especially given the current cost of living crunch.

In fact, the average time taken to pull together a first home deposit has now hit 10.6 years, according to CoreLogic .

But with the Home Guarantee Scheme (HGS), you may be able to buy with just a 5% deposit – without paying lenders mortgage insurance.

No wonder 193,000 first home buyers have used the HGS to get into the market since it launched in 2020.

How the Home Guarantee Scheme works

Instead of giving first home buyers a cash payment, which is (essentially) the case with the First Home Owner Grant , the HGS sees the federal government guarantee your home loan.

This can benefit first-home buyers in two ways.

First, under the HGS, lenders can let you take out a home loan with just a 5% deposit. Of course, some banks already offer this.

But if you have a deposit below 20%, you’ll usually be asked to pay lenders mortgage insurance (LMI), and that can cost many thousands of dollars.

That’s where the second upside of the HGS comes in.

Buyers using the scheme aren’t slugged with LMI, as the government acts as guarantor for your mortgage instead.

Three HGS options

The HGS is pitched at three types of buyers:

1. First Home Guarantee

The First Home Guarantee aims to help eligible first home buyers get a place of their own sooner.

In the current financial year, a total of 35,000 places are available.

2. Regional First Home Buyer Guarantee

If you’re planning to buy a first home in a regional area, the Regional First Home Buyer Guarantee could match your needs.

Only 10,000 places are up for grabs in the scheme this financial year, so reach out sooner rather than later if you’d like to explore this option.

3. The Family Home Guarantee

If you’re a single parent, the Family Home Guarantee is even more generous.

It allows eligible applicants (you don’t have to be a first home buyer) to purchase a home with as little as a 2% deposit without paying LMI.

The catch is that only 5,000 places have been made available for the 2024-25 financial year.

Why more first-home buyers are using the 5% deposit scheme

Just five years ago, around one in 10 first home buyers turned to the HGS for help buying a first home.

Today that figure is closer to one in three .

And it’s not just about rising property prices, higher interest rates or cost of living pressures.

The First Home Guarantee and the Regional First Home Buyer Guarantee have been expanded to include friends, siblings and other family members buying together, along with non-first-home buyers who haven’t owned a property in Australia in the past 10 years.

The fine print

The 5% first home buyer deposit scheme does have a few strings attached.

You will need to meet eligibility conditions.

These chiefly relate to your income and the maximum price you plan to pay for your first home – property price caps also apply .

The other thing to be aware of is that not all lenders have signed up to the HGS, so your options can be a little more limited.

Talk to us to get the ball rolling

If you’re interested in fast-tracking your path to home ownership, the 5% deposit HGS could be the solution you’ve been looking for.

Talk to us to find out if you’re eligible for the Home Guarantee Scheme – and discover the lenders that can help you get across the line.

RBA cuts the cash rate for the first time since 2020

Tue, 18 Feb 2025 23:18:08 GMT

What’s tipped for the rest of 2025?

Finally, a long-awaited reprieve for borrowers. The Reserve Bank of Australia has today cut the cash rate by 25 basis points to 4.10%. How much could this rate cut decrease your monthly mortgage repayments? And can we expect more cuts this year?

This is the first time the Reserve Bank of Australia (RBA) has cut the cash rate since it slashed rates to 0.10% in November 2020 in response to the COVID-19 outbreak.

Since then, we’ve had 13 cash rate hikes as the RBA attempted to rein in inflation.

RBA Governor Michele Bullock said in a statement that inflationary pressures are now easing a little more quickly than expected after recent data showed December quarter underlying inflation was 3.2 per cent.

“There has also been continued subdued growth in private demand and wage pressures have eased,” Governor Bullock said.

“These factors give the Board more confidence that inflation is moving sustainably towards the midpoint of the 2–3 per cent target range.”

How much might your mortgage repayments now decrease?

Unless you’re on a fixed-rate mortgage, hopefully your bank will soon follow the RBA’s lead and decrease the interest rate on your variable home loan.

For an owner-occupier with a 25-year loan of $500,000 paying principal and interest, this month’s 25 basis point rate cut means your monthly repayments could decrease by about $77 a month. That would put $924 a year back into your household budget.

If you have a $750,000 loan, your monthly repayments will likely decrease by about $115 a month – or $1380 per year.

Meanwhile, a $1 million loan could decrease by about $154 a month – or $1848 a year.

This all assumes that your lender automatically passes on the full 25-basis point cut to your home loan.

After so many years of rate hikes and higher interest rates one would hope they would, and there will be public and government pressure for lenders to do so (especially with a federal election around the corner).

Another thing to consider is that not all lenders automatically reduce variable home loan monthly repayment amounts in line with rate cuts.

To find out what your lender is doing with your loan, get in touch with us in a few days once the dust has settled.

How low are interest rates expected to go in 2025?

There are still seven more RBA meetings this year, during which the board may cut the cash rate further. But the RBA remained tight-lipped on whether more cuts will follow in their most recent statement.

Here are what economists at the big 4 banks are predicting.

– NAB: cash rate falling to 3.10% by February 2026 (four more cuts)

– CBA: cash rate falling to 3.35% by December 2025 (three more cuts)

– Westpac: cash rate falling to 3.35% by December 2025 (three more cuts)

– ANZ: cash rate falling to 3.85% by August 2025 (one more cut)

Are you worried about your mortgage? Get in touch

Despite this latest cut, there are still plenty of Australian households feeling the pinch of cost of living pressures and high interest rates.

If you fall into that category and haven’t had a home loan health check in a while, get in touch to see if you could be doing better on your home loan.

Some options we can help you explore include renegotiating with your current lender, refinancing to another lender, or debt consolidation.

Every household is different – and we’d be more than happy to help you come up with a tailored plan for yours.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

What happens to my home loan if interest rates fall?

Wed, 12 Feb 2025 23:35:48 GMT

Here’s what to expect

Great news for home owners – plenty of economists are tipping an RBA rate cut for February. Assuming it happens, once the celebrations have died down, what next? We explain what to expect when rates head south.

It’s been a long time between drinks for home owners celebrating a rate cut.

The last time the Reserve Bank of Australia (RBA) gave rates a chop was back in 2020 .

But the tide may be about to turn.

A growing chorus of economists – plus banks including NAB and Westpac – are expecting a rate cut of 0.25% when the RBA board next meets on February 17-18.

Of course, nothing is set in stone.

If we do see rates head lower though, it’s worth knowing how your home loan and repayments could be impacted.

What will happen to my loan rate?

If you have a fixed-rate home loan, it’s business as usual no matter what happens to the cash rate.

Your fixed rate won’t change and neither will your required monthly repayments.

That said, if you’re coming to the end of a fixed term, it’s worth having a chat with us about your next moves once the fixed rate expires.

The real action occurs if you have a variable rate home loan.

If the RBA cuts the cash rate, your variable home loan rate should fall too.

By how much? Well, banks don’t have to follow the cash rate. And history has shown that lenders haven’t always passed on rate cuts in full.

But banks may want to avoid potential backlash, especially given the current cost-of-living climate.

That would hopefully see most lenders pass on 100% of any rate cut. So, if the RBA cuts rates by 0.25%, your home loan rate should hopefully drop by 0.25% also.

How do you find out the new rate? Your lender will get in touch to let you know.

Will my repayments change if rates fall?

Not necessarily.

Some lenders automatically reduce home loan repayments in line with rate cuts.

Other banks, however, simply maintain your repayments at the old level. It’s just that more of your money goes towards paying off the principal (rather than the interest) each month.

This can be frustrating if you’re hankering for some extra money for your family budget each month.

However, some banks take the view that by maintaining your old repayments, they’re helping you pay more off the loan and get ahead with your mortgage.

To find out if your bank is automatically dropping your monthly repayments, or if you need to request for it to happen instead, get in touch with us and we can let you know.

How much might your mortgage repayments decrease?

For an owner-occupier with a 25-year loan of $500,000 paying principal and interest, a 25 basis point rate cut means your monthly repayments could decrease by about $77 a month.

That would put $924 a year back into your family budget.

If you have a $750,000 loan, your monthly repayments would likely decrease by about $115 a month – or $1380 per year.

Meanwhile, a $1 million loan would decrease by about $154 a month – or $1848 a year.

Worried about your mortgage? Get in touch

Despite a potential rate cut on the horizon, there are still plenty of households around the country feeling the pinch of cost of living pressures and high interest rates.

If you fall into that category and haven’t had a home loan health check in a while, get in touch to see if you could be doing better on your home loan.

Some options we can help you explore include renegotiating with your current lender, refinancing to another lender, or debt consolidation.

Every household is different – we’d be more than happy to help you come up with a tailored plan for yours.

How to finance your 2025 home renovation

Thu, 30 Jan 2025 23:26:00 GMT

Bathroom blitz? Kitchen kit out? Or perhaps some landscaping love might be on your house upgrade wishlist for 2025? If so, it’s worth knowing what reno finance options are available. ��

Bathroom blitz? Kitchen kit out? Or perhaps some landscaping love might be on your house upgrade wishlist for 2025? If so, it’s worth knowing what reno finance options are available. Today we’ll explain some ways to fund your home improvement project.

Spending on home renovations has boomed over the past five years , and it seems we’re not done yet.

The Housing Industry Association says high property values are giving Australians more home equity – and confidence – to go ahead with home improvements at near-record levels.

It’s exciting stuff, especially as home improvements can boost your lifestyle and your home’s value.

Here are some of the renovation loan options that could help transform your place into your dream home.

Use your offset account or redraw

You may have cash stashed in a home loan offset account. Or, perhaps you’ve been paying more than the minimum loan repayments, providing a source of funds via redraw.

Both could provide money to help fund your renovations.

But be sure to talk to us first about the possible impact on your home loan.

Savings held in an offset account, or those extra loan repayments, can help you save on loan interest.

So you’ll want to crunch the numbers before you dip into an offset account or redraw facility.

Top up your existing home loan

If you have sufficient home equity, you may be able to borrow a bit extra with your existing home loan through a loan top-up.

While this option may be more straightforward than switching to a new lender, it’s worth noting that some lenders can charge fees to top up a home loan.

Refinance to a new loan

Another possible source of reno funds could be refinancing to a new loan.

Your old loan may no longer have a competitive interest rate or the features you need.

The beauty of refinancing is that it can put any additional home equity you’ve recently acquired to work, which could provide the funds needed to pay for renovations.

The added sweetener could be interest rate savings and/or more flexible loan features.

Consider a construction loan

If you’re planning a major project, such as a new extension or a knock-down-and-rebuild, a construction loan could be worth a look.

A construction loan is purpose-built for renovation and building projects.

The funds are drip-fed to you as each stage of your project is completed. You only pay interest on the funds drawn down, and during the building phase you will typically only need to make interest-only repayments. This can help you save money on interest costs.

As an added plus, some lenders may provide pre-approval for construction loans even before you’ve chosen your builder.

Getting pre-approval can be a good way to know how much you can spend on your renovations, helping you set a project budget.

Understand the options available for your project

It’s difficult to start planning a renovation until you know just how much you can afford to spend.

So if you’d like to get a clearer idea of what’s possible for your 2025 renovation plans, contact us today and we’ll work hard to help you get rolling on your project.

The top 5 location turn-offs for Aussie home buyers

Thu, 30 Jan 2025 23:26:00 GMT

Location, location, location…

Ever spotted a bargain property and then thought to yourself: ‘What’s the catch?’ Well, more often than not there’s a good reason behind a lower-than-expected price tag. And while an undesirable location might not be a deal breaker for you, it could make it harder to sell later.

Beautiful home, dead quiet neighbours. Sounds brilliant, right?

Well, perhaps not if the property is next door to a graveyard.

There’s a lot to be said for the old adage ‘you can change a home but you can’t change the location’.

And new research from Compare the Market reveals the top five location turn-offs for home buyers.

It’s worth knowing what they are because, while these locations may help lower the price of the home, they can make things a little difficult for you later down the track when you try to sell.

1. Close to a tip

Landfills are a fact of life. But that doesn’t mean you have to live near one.

Close to one in three Aussies rate locations next to a dump as their top bugbear when considering where to buy (or rent – investors take note).

No surprises there. The sight and smell of rubbish is hardly a neighbourhood drawcard.

2. Next to the airport

“Close to transport” is often a popular sales pitch.

But under a flight path? Well, not everyone has Darryl Kerrigan’s sunny optimism when it comes to “location, location, location”.

One in five buyers say they couldn’t put up with airport noise.

3. Overlooking a graveyard

It may be the dead centre of town, and the neighbours aren’t likely to make much noise.

But 16.5% of buyers are spooked by the thought of a home next to a graveyard.

4. Alongside a highway

The relentless hum of traffic, exhaust fumes and the occasional screech of sirens.
It’s all too much for more than one in ten buyers who would walk away from properties located near a highway.

5. Next to a railway

It’s not a huge deal breaker for the majority of buyers.

But almost 7% are turned off by homes situated next to train lines.

Decide your location blacklist

What’s interesting from the above results is that there is no single location factor that the vast majority of buyers would shun.

Flight paths may matter to some, but aircraft noise is seen as a norm of urban living for others.

What matters is that you take a step back and consider ‘what are any negatives for the area?’ when you find a place you’re thinking of buying.

If there are potential downsides, it may not be the end of the world. You can always raise the issues as part of your price negotiations.

Or, if the location is seriously problematic (think wedged between a graveyard and a highway, and close enough to the airport to hear final boarding calls), it could be time to look elsewhere.

But you may compromise on other factors, such as land size or a spare bedroom, so you don’t have to settle for an undesirable location.

Talk to us

Deciding your ideal location may involve some give and take. A good starting point is finding out what you can afford to buy.

Get in touch today and we’ll help you work out your borrowing capacity.

Decisions decisions… Fixed-rate vs variable home loan rate

Wed, 22 Jan 2025 22:50:00 GMT

To fix or not to fix…

Amid growing expectations of rate cuts in 2025, sticking with a variable home loan rate can seem like a no-brainer. But not so fast. Locking in your home loan rate can also have upsides, including the potential for a lower rate right now.

Home loans come in all shapes and sizes. A common thread is that you’ll likely be given the choice of a variable or fixed interest rate.

It’s an important decision, as fixed rates can be very different from variable rates – and right now, some lender’s fixed rates are lower than their variable rates.

Let’s take a closer look at both options.

Variable-rate home loans

With a variable-rate loan, the rate you pay can move up or down in line with market interest rates.

If the Reserve Bank of Australia (RBA) raises the official cash rate, for example, your loan rate will almost certainly rise, which in turn increases your repayments.

Conversely, if the cash rate falls, your variable rate should also drop, which would result in lower monthly repayments.

The upshot is that you need to be prepared for your home loan interest rate (and repayments) to rise or fall during the course of your mortgage.

In exchange for this uncertainty, variable rate loans tend to offer more flexibility and features.

These can include a redraw facility, linked offset accounts, and being able to make fee-free extra repayments, all of which can make your home loan easier to live with and help you pay off the balance sooner.

Fixed-rate home loans

When you fix your home loan rate, the interest rate stays the same regardless of changes to market rates.

This means you know exactly what your repayments will be throughout the term of the fixed rate period (usually one to five years), which can help make household budgeting easier.

If market rates rise, you’re in front because your fixed rate won’t be affected.

The downside is that if interest rates fall, you won’t get the benefit of lower repayments.

The good news is that today’s fixed-rate home loans are generally more flexible than in the past.

Some allow extra repayments (often up to an annual limit) plus redraw. Others even provide offset accounts.

Even so, one issue to be aware of is ‘break’ fees .

These can apply if you bail out of a fixed-rate loan before the fixed term ends – something that may happen if you want to refinance to a lower interest rate loan sooner than you originally planned.

Break fees can be complex. But if interest rates have dropped since you fixed, you could be up for significant costs, potentially running into tens of thousands of dollars, which could wipe out any savings from refinancing.

This highlights the need to talk to us before locking in a fixed rate so you can make an informed choice.

Do fixed-rate loans come with higher interest rates?

This is where things get interesting.

Right now, fixed rates can actually be lower than variable rates, depending on the lender.

This is likely because some banks believe that the RBA may cut the official cash rate (perhaps several times) over the next couple of years, so they’re pricing this into their fixed rate options to make them more enticing.

Macquarie Bank, for instance, has a 2-year fixed rate of 5.69%, well below its 6.14% variable rate.

Whether the RBA cuts the cash rate, how many times it cuts it, and how soon all determine whether or not you come out ahead by fixing now.

A split rate loan – have your cake and eat it too

There is one possible way to enjoy the certainty of a fixed rate and the flexibility of a variable rate: a split rate loan.

This lets you divide your loan between a fixed rate and a variable rate. For example, 40% of your mortgage could be accruing interest at a fixed rate and the remaining 60% could be charged at a variable rate.

You get bragging rights about the lower fixed rate you’re paying, plus the features of a variable rate loan.

It’s a bit like hedging your bets, with some additional benefits.

Want to know more?

Still not sure which option might suit you?

Contact us today to find out more. We don’t have a crystal ball, but we can sit down and work out what’s important to you – and then which of the above options aligns with those needs.

Three financial New Year’s resolutions to tackle 2025 head-on

Mon, 13 Jan 2025 23:48:00 GMT

Happy New Year for 2025!

How are your New Year’s resolutions coming along? If you’re like most people, they’re likely related to health, fitness or abstinence. But why not consider a financial one too? Here are three resolutions worth considering for 2025.

There’s no denying that 2024 was a tough year for many mortgage holders – in no small part due to the hope of rate cuts dangling just out of reach, coupled with inflation.

But by kicking off the year with one or two of the ideas below, you could be in a better position to tackle 2025 head-on, come what may.

1. Call us for a home loan health check

Do you know the interest rate on your home loan?

Don’t stress if you don’t, about 40% mortgage holders can’t recall it.

Not knowing the rate is usually a good sign that it’s time to check if your mortgage is still well-suited to your needs.

An analysis by RateCity shows the average borrower who has not refinanced their home loan in the past 12 months has paid almost $6,000 more interest during that period as a result.

Rest assured we’ll help make the process painless. Simply get the ball rolling by giving us a call today.

2. Cut unnecessary expenses from your budget

When was the last time you had a thorough look at your spending account?

It’s good to get into the habit of conducting regular expense audits.

After all, many of us have been guilty of subscribing to one too many streaming services that we rarely use – let alone takeaway coffees, takeaway meals and other impulse purchases.

Little tweaks here and there can add up.

For example, a daily $5 takeaway coffee habit costs you $1825 per year. Switching to a DIY French press brew can cost just $350-$450 per year.

3. Leverage your equity to achieve other property goals

A home loan doesn’t just have to be a debt.

It can also be a valuable tool that lets you work through a personal bucket list by putting home equity to work.

And you could be starting 2025 with more equity than you realise.

Back in January 2023, the median home value across Australia’s state capitals was $770,374, according to CoreLogic .

Fast forward to now, and the median value has increased to $897,580.

That means that over the past two years the average city homeowner in Australia has gained almost $130,000 more equity in their property, which they could possibly leverage for other investments.

In fact, that $130,000 rise in equity is the equivalent of a 20% deposit for a $600,000-$650000 investment property.

Alternatively, you could use that equity for home renovations to improve your primary place of residence.

Call us today to get a clearer picture of your home’s potential equity – and how you could use it to tick off your wish list in the year ahead.

House, apartment or townhouse? The pros and cons of each

Mon, 13 Jan 2025 23:48:00 GMT

Let’s look at the different types of homes you can buy

There’s much more to property in Australia than just houses or units. And if you’re in the market for a home or investment property, it helps to know your townhouses from terrace homes so that you can choose a place that’s suited to your goals and needs.

Australians are blessed with choice when it comes to buying a family home.

Nationally, Australia has 10.9 million private dwellings .

The sheer scale of properties points to a wide variety of housing types to suit different budgets and lifestyles.

So, it can pay to cast your net wide.

With this in mind, let’s take a look at the main types of housing you can choose from.

Houses – freestanding, semi or terrace?

Houses dominate the property scene in Australia, accounting for a whopping 70% of the nation’s private residences .

But not all houses are the same.

‘Detached’ houses are freestanding, or standalone, residences.

That’s quite different from semi-detached houses , which share a common wall with a neighbouring home – something often seen in rows of terrace houses, typically dating from the 19th and 20th century .

The pros of houses: houses have historically shown a higher rate of capital growth than other types of residential property.

The cons of houses: houses often come with a price premium over apartments . As a guide, the median price for a house nationally is $879,680, compared to $669,700 for apartments.

Apartments

Apartment living has gained a big following in recent years, with one in six (16%) Australians calling an apartment ‘home’ .

And they continue to grow in popularity.

Realestate.com.au says searches for apartments have been trending upwards since mid-2020, accounting for almost 40% of all ‘buy’ searches in late 2024 .

The pros of apartments: part of the appeal of apartments is affordability. However, they can also offer the advantage of low-maintenance living (think no lawns to mow each weekend).

The cons of apartments: one thing to watch out for is strata levies . These cover the cost of building maintenance and repairs, and newer developments with more facilities can come with higher strata fees .

Townhouse or villa?

Not keen on an apartment, but looking for something more affordable than a house?

The solution could be a townhouse or villa.

Townhouses make up 13% of dwellings across Australia . They typically have two storeys while a villa is usually a single-storey home.

The pros of townhouses: the small garden or courtyard space associated with townhouses and villas can offer residents more private space.

The cons of townhouses: both townhouses and villas are part of a strata scheme, which makes it worth keeping an eye on strata fees.

Duplexes

Duplexes can tick a bunch of boxes. They’re a modern version of a semi-detached house, often with two adjoining homes constructed on a larger block, connected by a single wall.

While duplexes are less common than houses or apartments, they have the potential to let you buy a home for almost half the price of a regular house .

The pros of duplexes: a duplex can combine the privacy of a house with the affordability and low maintenance of a townhouse or villa.

The cons of duplexes: according to REA Group , owners of both duplex homes must agree to a building insurance policy that covers both sides of a duplex. This is something to look into before buying.

Talk to us to find out what you can afford

The type of property that’s right for you is a very personal decision.

What you are able to buy can be shaped by both personal preference and your borrowing power. And more often than not, trade-offs and compromises occur.

Call us today to know how much you can afford to borrow. It could shape your choice of home.

Merry Christmas! And thanks for your support in 2024!

Sat, 28 Dec 2024 05:33:00 GMT

Season’s Greetings!

With the holiday season upon us, we’d like to express our heartfelt thanks to all our amazing clients for your trust and support throughout 2024.

With the hope of rate cuts always dangling just out of reach, coupled with inflation, 2024 was tougher than many families anticipated.

Please know that we’re always here if you ever want to discuss your mortgage – including ways we could potentially help you reduce your monthly repayments.

Looking ahead, 2025 offers plenty of promise (maybe we’ll start getting those highly anticipated RBA rate cuts!), and we’re ready to walk alongside you to tackle your goals and aspirations – whether they be buying your first home, second home, a holiday home or an investment property.

But first, we hope you take a well-deserved break to enjoy the magic of the festive season.

Whether it’s spending quality time with loved ones or simply unwinding with some holiday cheer, this is your moment to relax and recharge.

The next 12 months may bring more surprises, but one thing remains constant – our commitment to being here for you every step of the way.

So, throw on that festive jumper (the uglier, the better!), savour the holiday treats, and celebrate all you’ve accomplished this year.

May your festive season be joyful, your happiness be abundant, and your challenges small. We can’t wait to help you continue your property journey in 2025!

Have you refinanced recently? It could be time this summer break

Sat, 28 Dec 2024 05:33:00 GMT

How much could you save on interest in 2025?

If you haven’t looked into refinancing since the start of higher interest rates, it might be time to ask yourself ‘why not?’ New research shows it could be time to try again – especially if you want to start 2025 off on the right foot.

A new report from Canstar shows more than one in five borrowers were able to negotiate a better interest rate from their lender this past year.

One in ten successfully switched to a new lender in the last 12 months.

Even so, fewer home loans have been refinanced this year compared to 2023.

With rates looking like they might stay higher for longer, it could be worth taking a fresh look at refinancing over the summer break.

What’s holding borrowers back?

According to Canstar, around 5% of borrowers tried to refinance in 2024 but didn’t have enough home equity.

A further 5% didn’t meet the bank’s requirements.

It’s a situation dubbed ‘mortgage prison’ – where you’re stuck paying more on your home loan because you don’t qualify for a lower rate home loan.

As Canstar notes, a lot of people think they’re in mortgage prison.

But if you haven’t tested the lock recently, now could be the time to try.

Why it could be time to revisit refinancing

Even if you’ve had a go at refinancing in the past, it’s worth talking to us to see if you could qualify for a new loan today.

On the home equity front, home prices increased nationally by 5.5% in 2024. So you could have more equity than you realise.

Also, if you have a solid record of regular repayments, some lenders may be willing to stress-test refinancers using a loan serviceability buffer as low as 1% ( below the standard 3% ).

The important thing is that you speak with us to get to know your options.

How much could you save by refinancing?

Well, that depends on how big your current home loan is, what your current interest rate is, and how much you reduce that rate by.

But an analysis by RateCity shows the average borrower who has not refinanced their home loan in the past 12 months has paid almost $6,000 more interest during that period as a result.

Is refinancing difficult?

Almost one in five (17%) borrowers surveyed by Canstar said they had no plans to refinance because they believe “it’s too much like hard work”.

Let’s clear the air on that one.

As home loan professionals, we’ll help you with the legwork, track down a home loan that meets your needs, help with the paperwork, and liaise with lenders on your behalf.

The bottom line is that we can streamline the refinancing process for you.

Put us to the test.

Get in touch today to see if your home loan is still suitable for your needs – and if not, we’ll help you find one that is.

How did property prices go in 2024? And what’s tipped for 2025?

Thu, 12 Dec 2024 06:40:00 GMT

What’s happening in your neck of the woods?

As we head towards the end of 2024, let’s take a look at how property markets performed over the last year – and discover what the experts say may lie in store for home prices in 2025.

2024 has been a year of change, with property values and market conditions shifting across many of our state and territory capitals.

In fact, the only constant has been the Reserve Bank of Australia’s cash rate , which has held steady at 4.35% since November 2023.

After a year that saw home values rise nationally by 5.5%, according to CoreLogic , it’s worth looking at what we can expect in the new year.

The Australia-wide picture

November 2024 saw home values rise nationally by a barely perceptible 0.1%.

Technically speaking, it’s the 22nd straight month of growth since January 2023. But realistically, 0.1% hardly qualifies as a cracking pace of growth.

Quite simply, CoreLogic says the market is losing steam, and a downturn is gathering momentum – particularly in Melbourne and Sydney.

That’s good news for buyers who may be able to take advantage of softer price growth in 2025.

However, in a market as large and diverse as Australia, it pays to drill down to local trends.

With this in mind, let’s take a look across our major capital cities.

Queensland

Brisbane home prices have climbed 12.1% over the past year. Can the growth be maintained? Maybe, though perhaps not to the same extent. Domain is predicting price growth ranging from 5-7% for houses, and 7-9% for apartments in 2025.

New South Wales

Sydney is up 3.3% over the past year and likely hit a cycle peak in August. Home values have flattened or fallen ever since, says CoreLogic, with the city’s median home price of $1.2 million proving an affordability challenge. Domain is predicting a 4-6% rise in home values through next year.

Victoria

Melbourne took out the wooden spoon for property price growth in 2024, recording a 2.3% fall in prices over the last 12 months. The new year could bring a change of pace. Domain predicts house values could rise 3-5% in 2025 though apartments are expected to drop by up to 2%.

Australian Capital Territory

Home prices in Canberra have barely budged in 2024, declining by just 0.1% in the past 12 months. Domain is taking an optimistic view, expecting house values to rise by 3-5% next year, while unit values could drop by up to 4%.

Tasmania

Hobart values fell 1% in the year to November, bringing the total falls to 12.1% since the market peaked in March 2022. However, more affordable prices plus generous stamp duty reforms launched in mid-2024 could make 2025 a big year for first home buyers in Tassie.

South Australia

Home values in Adelaide have jumped 14% over the past year. However, CoreLogic says Adelaide’s 2.8% rise in values over the past three months was the lowest since June 2023. Even so, there may be plenty of steam left in the market, with Domain forecasting a 7-9% rise in prices in 2025.

Western Australia

Perth has seen home prices soar 21% over the past 12 months. But with listings up 33% in November, CoreLogic says the pace of price growth is slowing. Domain is expecting prices to rise by a more modest 8-10% next year – still nothing to sneeze at.

Northern Territory

Prices in Darwin have barely budged this year, mustering up just 0.9% growth over the past 12 months. Next year may be better. SQM Research is predicting home values in Darwin could rise anywhere from 3% to 10% in 2025 depending on interest rates and population growth.

Get to know your borrowing power

A cooler market could be the opportunity you’ve been itching for to buy a property next year.

Call us today if buying a first home, investment property or upgrading your current home is on your radar for 2025 – we’ll help give you a clearer idea of your borrowing power.

Thinking of buying a holiday home? Here’s what to weigh up

Thu, 12 Dec 2024 06:40:00 GMT

Thinking of your own private getaway?

The coming weeks will see millions of Aussies enjoy a well-earned getaway, and for some, a memorable holiday will inspire plans to buy a holiday home. But is it a good idea? And can a weekender still stack up financially? We explain what to consider plus tips to fund a vacation property.

It’s that time of year when we lock up our home, load up the car, and hit the highway to unwind with an all-too-brief sea or tree change.

It can add up to a wonderful experience, and some holidaymakers will stretch the vacation buzz a lot further by purchasing a holiday home.

But given the current state of property prices, is a weekender a smart move? Here’s what to weigh up.

A holiday retreat is a major outlay

No matter whether you’re thinking of a coastal retreat or hinterland hideaway, homes in popular holiday spots can be pricey.

As a guide, an apartment in Coolum on Queensland’s Sunshine Coast, can set you back about $870,000.

If you’re thinking of a house in Byron Bay on the NSW north coast , you’ll likely need a budget of around $3.5 million.

That said, there can still be relatively affordable holiday spots.

A unit in Victoria’s seaside town of Portland , about four hours drive from Melbourne, can cost around $304,000, And in the wine growing regions of WA’s Margaret River , or Tanunda in South Australia’s Barossa Valley , you may be able to pick up a house priced from around $670,000-$770,000.

Can a weekender still be a smart investment?

Wherever you buy, a holiday home is likely to involve an outlay of several hundred thousand dollars.

That sort of money could pay for a lot of vacations around the nation – and across the world.

So, first and foremost a holiday home should stack up as a good investment.

This is where it’s worth putting down the pina colada and taking off the rose-tinted glasses.

Ideally, you probably want your holiday home to deliver long-term capital growth.

The thing is, vacation properties tend to be located in regional areas where price growth can be very different from our big cities.

That’s not to say regional neighbourhoods don’t tick the box for capital gains.

CoreLogic points to areas such as Mackay, Geraldton and Townsville , which are seeing “exceptional growth” driven by affordability and lifestyle appeal.

However, not all regional markets are booming.

The holiday town of Batemans Bay, on NSW’s south coast, and Victoria’s coastal city of Warrnambool, for example, have both experienced declining values over the past year, according to CoreLogic.

Long story short, be sure to research any area you’re looking at buying into to get a feel for how property values are likely to move in the future.

Can a holiday property pay its way?

Gone are the days when most holiday homes stood empty for most of the year.

Platforms like Airbnb and Stayz offer a chance to put a vacation retreat to work earning short-term rental income.

The catch is that various state governments are limiting the number of nights these properties can be offered for rent each year.

Also, a number of councils such as Hobart City Council , have raised rates for short-term accommodation properties.

These factors need to be accounted for in your holiday home budget.

On the plus side, if your vacation property is rented out or available for rent, you may be able to claim at least some of the ongoing costs as tax deductions each year .

Funding your holiday home

Loans for holiday homes work in much the same way as a regular mortgage, but with a few differences.

Demand for properties in holiday hot spots can be highly seasonal. This increases the risk for lenders, who may ask you to stump up a bigger deposit compared to an owner-occupied home loan.

Your vacation retreat could also be seen as an investment property, meaning you could be asked to pay a higher investment loan rate .

The big plus is that if you are a home owner, you may be able to use your existing home equity in lieu of a cash deposit on a holiday property.

Get in touch

Call us today to find out more about loans to buy a holiday home.

It could turn a vacation pipedream into a fun-filled, financially rewarding reality for your family.

Thinking of installing a swimming pool for summer?

Thu, 28 Nov 2024 00:22:00 GMT

Fancy a quick dip?

There are few better ways to beat the summer heat than floating in your very own pool. With a range of price points to choose from, a pool can be affordable, but will it add value to your property? And how will you pay for your backyard oasis?

Fun fact: more than 3 million Aussies have a backyard swimming pool or spa .

That’s about one-in-eight Australians, or as many as one-in-four in areas like the Gold Coast.

This popularity isn’t surprising.

Pools offer plenty of fun, with perks that go beyond staying cool in summer.

A pool can help you stay fit, encourage your kids to develop water confidence, and when it comes to home entertaining, a swimming pool can do lots of heavy lifting.

How much does a pool cost?

Before pencilling in dates for poolside barbecues, it’s important to set a budget for your swimming pool.

At the more affordable end of the scale, an above-ground pool can cost around $3,500 to $12,000.

If you’re keen on an inground pool expect to pay a lot more, with your budget likely needing to start at about $35,000 and can go as high as $100,000.

Bear in mind, a pool usually needs a few extras including a filter to keep the water clean. You’re required by law to install childproof fencing , and some basic landscaping will help keep your pool clean and inviting.

All these extras should be included in your budget.

Don’t forget to allow for ongoing expenses too.

The additional power and water consumption plus pool supplies such as chlorine can all add up.

Depending on the size of your pool, regular maintenance can cost between $65 and $165 each month.

Can a pool add value to your place?

Pools are super popular when it comes to real estate.

In 2023, “pool” was the most-searched term among home buyers across Australia.

Even so, the jury is out on how much value a pool will add to your home.

Real estate group Ray White says your property’s value is expected to rise by at least the cost of installing a swimming pool.

So if you spend, say $50,000 on a pool, you could hope that the value of your place rises by a minimum of $50,000.

Still, a pool doesn’t always increase the number of interested buyers at sale time. The cost and effort of maintaining a pool has the potential to turn some buyers away.

A quick call to a local real estate agent can shed light on whether pools are a sought-after feature in your area.

Ways to fund your swimming pool

The next step is to decide how to pay for your pool.

Dipping into savings means avoiding interest charges though it can be a good idea to have sufficient spare cash available to manage unplanned bills or expenses.

Using a personal loan could keep savings intact, and the fixed term provides a clear end date when the slate will be cleared.

Or, you may want to tap into home equity and add the cost of a pool to your home loan – which can come with the opportunity to review your current loan to check that it’s still a good match for your needs.

Ready to dive in?

You’ll want your new pool to last for many years – but perhaps not the loan that pays for it.

That’s why it’s important to talk to us about financing your swimming pool.

We’ll dive into the market to track down the option that’s suited to your needs, leaving you free to straighten up your backstroke, dust off the pool noodles and focus on the fun times ahead in your backyard paradise.

Buying land to build on later: what you need to know

Wed, 27 Nov 2024 22:06:00 GMT

Spotted that perfect plot of land for your future?

You’ve seen the perfect piece of land but you’re not quite ready to build. No problem – a land loan can be a handy finance solution. However, it can work a bit differently from a regular home loan. Here’s what you need to know.

Not everyone wants to buy an established home or even a house and land package.

Sometimes you just want to buy a vacant block, pay it down and give yourself a breather before paying for the cost of building a home.

Or maybe you’ve seen an exceptional block listed for sale that ticks all the boxes for your ideal future home site – and it just seems too good an opportunity to miss.

Whatever the case, it could be possible to take out a loan for land only. Here’s how it works.

What is a land loan?

Land loans, also known as vacant land loans, are dedicated to financing the purchase of a vacant block.

In some respects, these loans work along the same lines as a traditional mortgage in that you pay a deposit, borrow a set amount and then select fixed versus variable rate options.

There may even be the opportunity to add an offset account or make interest-only payments rather than principal plus interest repayments.

But it pays to read the fine print. Depending on the lender and product you choose, land loans can come with unique conditions that you need to be aware of.

You may need a bigger deposit

Vacant land can potentially take longer to sell than an established house and land.

This raises risk for a lender, should you default on your repayments and (after other possible avenues are exhausted) the bank has to repossess and sell your property.

Banks may manage this risk by asking borrowers for a bigger deposit – one that goes beyond the standard 20% down payment.

The bigger the block, the bigger the deposit you may be required to have, particularly if you’re buying vacant acreage.

You could pay a higher rate

As lenders may see vacant land as higher risk, you may be asked to pay a higher interest rate compared to a regular home loan.

This highlights the importance of talking to us before you commit to buying.

By doing so, you can be more confident that you can manage the loan repayments – and are paying a competitive interest rate.

You may be required to build within a set timeframe

In general, lenders often like to see that a borrower has plans to build on vacant land within a few years of buying the block.

Your lender may even require you to construct a home within a set time period. Not always, but sometimes.

This is another factor you should talk to us about.

A requirement to build by a specific deadline has the potential to reshape your plans, including what you can afford to build and how you’ll finance it (potentially a construction loan).

Talk to us before you buy

Buying vacant land now and building later can seem like a cost-effective way to get your dream home in your ideal location.

But there are plenty of other factors that lenders will also want to consider before approving an application, including access to the site, the shape and make-up of the land, and what service utilities you’ll be able to tap into.

So if you’ve been eyeing off a vacant block, give us a call first to find out what land loan options might be available.

Do you really need a building inspection?

Thu, 14 Nov 2024 02:29:00 GMT

Here’s why you may not want to skip it

Your home is possibly the most valuable asset you will ever own. So it’s worth taking precautions to help ensure you buy a place that has a clean bill of health, free from budget-busting hidden nasties.

Even the most attractive homes can hide unwanted surprises, and it’s not always easy to spot a problem property.

Arranging a pre-purchase pest and building inspection gets a professional on the case to possibly reveal any dodgy or deteriorating building work or hard-to-spot pest infestations.

It can help you avoid unplanned repair bills and/or provide a red flag that you’re looking at a property with the potential to turn your home-buying dream into a costly nightmare.

What does a pest and building inspection involve?

A pre-purchase building inspection involves a qualified person, often a licensed builder, physically inspecting a property to check for serious defects such as faulty footings or rising damp, which can be expensive to fix.

You can organise a building inspection in isolation, or for a small extra cost you can often add in a pest inspection. This can help alert you to whether or not you’ll be sharing the home with a variety of destructive creepy crawlies such as borers or termites.

Experts say common faults and defects picked up by pest and building reports include active termite infestations, construction faults and the need for plumbing and wiring to be replaced due to safety concerns.

These sorts of issues can leave a buyer facing substantial – and often unplanned for – expenses once they take ownership of the property.

How much does a pest and building inspection cost?

Buying a home often brings a raft of upfront costs, and it can be tempting to cut back where possible.

But a pre-purchase pest and building inspection is one expense you probably don’t want to sidestep.

Exactly how much you pay will depend on the service you use and the size of the home.

As a guide, HiPages says a building inspection fee on average can range from about $200-$300 for a smaller property to $400-$500 for an average-sized house.

Add in a pest inspection, and you could be looking at around $100-$150 extra.

What if the property gets a bad pest/building report?

If a home gets the thumbs down after a pest/building inspection, it’s not necessarily the end of the world – especially if the property ticks plenty of other boxes for you.

You can use a pest and building report to try and negotiate a lower price.

The key is to be confident that any offer you make takes into account the cost of fixing any faults noted in the pre-purchase inspection.

That can mean gathering quotes from builders and/or pest exterminators before you make a formal offer.

Alternatively, you may decide it’s not worth the risk, and start your home hunt afresh.

Talk to us for more information on the pre-purchase checks worth making before committing to buy a home. It could be the difference between buying a quality property versus a bricks and mortar lemon.

Can we expect the RBA to cut back rates this summer?

Thu, 07 Nov 2024 23:15:00 GMT

Here’s the latest from the RBA

With just one RBA rate decision left for 2024, homeowners may be holding onto hopes of a summer cut. We look at when rates may start falling – and how you could possibly give yourself a rate cut before Christmas.

“Are we there yet?” It’s the catch cry of kids on long summer road trips, and it could just as easily apply to homeowners waiting for much-anticipated rate cuts.

The good news is that we appear to be getting closer – with many banks forecasting a possible RBA rate cut by the end of summer.

Rates on hold for November …

The Reserve Bank of Australia (RBA) kept rates on hold in November , despite inflation falling to 2.8% , which is well within the RBA’s preferred 2-3% inflation range.

So, what’s holding up rate cuts? And why does it seem like the goalposts keep shifting?

It turns out the RBA is concerned that part of the decline in inflation “reflects temporary cost of living relief” (think the $300 power bill credit ).

Basically, the RBA is worried that inflation remains too high and the outlook is still a little too uncertain to make any rate cuts right now.

Banks expect rates to fall in early 2025

What the RBA is aiming for, is “sustainably returning inflation to target” (that’s the 2-3% band). And it cautioned this could still be a way off.

That makes the chances of a festive season rate cut at the RBA’s next meeting (December 10) unlikely.

For the record, RBA Governor Michele Bullock didn’t give any hint on the direction of interest rates – either up or down.

The banks, however, are a lot more open – and optimistic – about their interest rate expectations.

The Commonwealth Bank , which had previously tipped a December rate cut, is now pencilling in the following meeting (February 18) for the first of what could be a string of rate cuts.

Westpac, ANZ and AMP also all anticipate the RBA to cut the cash rate as early as February, while NAB is forecasting a rate cut as early as March 2025.

Why wait? Variable rates are already falling

While all this may make for a happy new year, February may seem a long way off – especially if you’re sweating on a rate cut (and remember, there are no guarantees).

But you may not have to wait around for the economy or the RBA to shift in your favour.

It could be possible to give yourself a rate cut in time for Christmas.

According to Mozo, growing expectations of future rate cuts have seen a number of lenders take the knife to their variable rates, with some cutting their variable rates below the 6% mark .

This may be helping to drive a 2.1% uptick in the volume of home loans being refinanced over the past month.

Talk to us today

Waiting is never much fun. Refinancing now could help free up your household budget and contribute to a little extra Christmas cheer.

If that sounds good to you, contact us for a review of your home loan. We can run through your situation and let you know if there are ways to save on your current home loan interest rate.

How to nail a home loan if you’re self-employed

Thu, 31 Oct 2024 04:37:00 GMT

Here’s how to apply like a boss

It’s the great Australian dream for many: giving the 9-to-5 grind the flick and running your own show. But when it comes to taking out a home loan, being your own boss can dish up some unexpected hammer blows.

Rightly or wrongly, lenders tend to see self-employed borrowers as a higher risk compared to employees . That’s largely because, by and large, their income isn’t as guaranteed.

In addition, it’s likely their earnings won’t be the same each pay day – they may differ, sometimes substantially, from one month to the next.

In a lender’s eyes this has the potential to impact their ability to make regular loan repayments.

So if you own one of Australia’s 2.6 million small businesses , or you’re one of the nation’s one million independent contractors , here are some tips on how to convince a lender to back you.

Show you’ve been in business for a while

Banks often feel more comfortable if you have been self-employed for a while.

That can mean showing you’ve held your Australian Business Number (ABN) for at least a year or two. It demonstrates the business has got legs and possibly generates a reasonable income for you.

Gather proof of income

While employees can simply stump up a couple of pay slips as proof of income, if you’re self-employed you’ll likely need to pull together several pieces of paperwork as evidence of income.

The requirements vary between lenders.

You may be asked to provide your last two years of financial statements, including business and personal tax returns (a good incentive to stay up-to-date with your tax!). Or the bank may just want to see several recent business activity statements.

In some cases, you may be asked for an income statement signed by you and your accountant that confirms your financial position and that you can afford the loan repayments.

With so much variation, it’s important to speak with us to know what different lenders look for.

Showcase your other assets

It’s not a bad idea to gather evidence of personal savings and investments.

A healthy track record of regular saving, in particular, can go a long way towards convincing a lender that you can handle home loan repayments.

Don’t hide your income or exaggerate expenses

The Australian Tax Office (ATO) estimates that about 10% of small businesses under-report income (aka cash-in-hand jobs) or exaggerate/overclaim expenses. Not only can this get you in hot water with the ATO, but it can also impact your borrowing capacity.

That’s because generally speaking, the lower your income, the lower the repayments a lender may expect you’ll be able to afford each month.

Low-doc loans for self-employed home buyers

You may have heard about low-doc home loans .

These are purpose-built loans designed for self-employed borrowers who don’t have sufficient documents to apply for a regular home loan, hence the name “low doc”.

The beauty of low-doc loans is that they can provide a pathway into the property market.

The downside is that with less proof of income, the bank may see you as higher risk. And that can mean paying a higher interest rate.

The good news is that the higher rate may not apply for the life of the loan.

If you build up a record of reliable loan repayments, the bank may let you convert your mortgage to a full doc loan at a later stage, potentially providing the savings of a lower rate.

Not every lender offers low-doc loans. Talk to us to know which, if any, low-doc loans are suitable for your circumstances.

Get the ball rolling

Borrowing to buy a home may involve a little extra effort when you’re self-employed but it can be done.

And if you’ve created a successful business with a strong track record of generating a profit and income for yourself, the process can be straightforward and result in you landing a regular ol’ home loan.

The catch is that running your own show is likely to mean you’re stretched for time to put the application together.

If that sounds like you, give us a call. We’ll help take care of your home loan while you’re taking care of business.

What’s going on with negative gearing?

Thu, 31 Oct 2024 04:37:00 GMT

That age-old debate is gearing up again

Negative gearing is in the headlines again. But what is it all about, and could it affect you? We explain how negative gearing works, why it’s so popular among investors, and why it’s attracting fresh attention.

Australians love property. So much so that more than one-in-ten adults ( 2,268,161 Australians ) own an investment property.

So why is property such a popular investment?

Well, landlords can earn regular, consistent rental income. That’s extra cash to pay off the investment loan.

Additionally, over the past 100 years, national property prices have risen 10.9% per year on average, according to AMP insights.

This kind of return can provide a decent capital gain when the owner sells – which may also be eligible for a 50% capital gains tax (CGT) discount .

But there’s a third factor that can make property such an attractive investment, and that’s the potential tax savings of negative gearing.

How negative gearing works

‘Gearing’ simply means borrowing to invest.

‘ Negative gearing ’ is where the costs of owning the property, such as loan interest, council rates, insurance and so on, exceed the rental income the property generates.

The investor then claims a loss on the property via their tax return (this loss can be claimed even though the property’s value, aka capital gains, might have increased during that period).

The advantage of negative gearing is that this loss can be offset against other income, including your regular wage or salary.

The end result is the potential to save on your tax bill.

The tax savings can stack up

A simple example here will help.

Let’s say Deb’s annual salary is $125,000. At 2024-2025 tax rates , she pays tax plus Medicare levy totalling $28,288.

Deb recently bought an investment property. It generates $25,000 in annual rent, and the ongoing costs (including, but not limited to, strata levies, landlord insurance and loan interest) add up to $35,000 each year.

This leaves her with a loss of $10,000.

Deb now claims that loss on her tax return.

This will push her taxable income down to $115,000 ($125,000 salary less $10,000 property loss).

At this point, Deb’s tax (plus Medicare levy) is cut to $25,288, giving Deb an annual tax saving of $3,000.

This tax saving is more just than a sweetener.

It’s extra cash that can go towards repaying the investment home loan.

One of the controversies surrounding negative gearing is that many investors are unlikely to really be making a loss on their investment property because the value of their property usually increases each year.

The counter-argument to that however is that those capital gains are already subject to capital gains tax (albeit, usually discounted at 50%).

Why is negative gearing back in the news?

The latest kerfuffle around negative gearing arose because Federal Treasurer Jim Chalmers let slip that he had asked the Treasury for modelling around negative gearing and its impact on housing supply .

Prime Minister Anthony Albanese had stated “ We have no plans to touch or change negative gearing .”

But of course, nothing is set in stone when it comes to politics.

That said, it would take a brave government to scrap negative gearing.

After all, those 2.2 million property investors are also voters – about half of whom negatively gear their properties .

Keen to buy an investment property?

It always makes sense to talk to a tax professional to know whether you could benefit from negative gearing.

As mentioned above, about half of property investors employ the strategy – it’s not the right fit for everyone.

Either way, if you’re keen to become a property investor and want to explore finance options that could help make that a reality, get in touch with us today.

We can help you assess your borrowing capacity and give some insights into how you could leverage the equity in your current property to make it happen.

How much does LMI really add to a home’s cost?

Thu, 31 Oct 2024 04:37:00 GMT

Finding it hard to reach a 20% deposit?

Saving for a 20% house deposit is like house training a wilful Labrador. It requires plenty of patience and persistence. Not your thing? You could take out lenders mortgage insurance (LMI). But how much extra does that cost? And can you avoid paying for it? (for the LMI, not the dog…)

LMI is a type of insurance that protects the lender (not you or any guarantors) if you can’t keep up with your home loan repayments.

It’s typically applied to home loans when your deposit is less than 20%. And right now, that’s the case for many home buyers.

A recent Mozo study found 84% of Australians saving a deposit can’t currently afford the full 20% deposit needed to avoid LMI – in no small part due to increasing property prices.

In fact, the national median property price is now $973,300, up from $949,400 in December last year and $649,300 in June 2019So, let’s shed a light on how much LMI can cost – plus ways to make the expense more manageable or possibly disappear altogether.

How much LMI could I pay?

LMI typically works out to about 1% to 2% of your loan value , depending on the size of your deposit and the size of your loan.

The more you can stump up as a deposit, the lower the LMI premium can be.

We’ll use this handy LMI estimator to show how it works (feel free to give it a go yourself).

Let’s say you’re buying an apartment costing $500,000. If you have a 10% deposit of $50,000, LMI will likely cost around $8,680.

It all depends on the price of the property you’re buying and your deposit amount. For example, the LMI premium can be as high as $36,480 if you have a $150,000 deposit for a $1,500,000 home.

The good news is that there are ways to manage – and potentially even bypass – LMI. Here are three ideas to consider:

1. Talk to us

Unlike other types of insurance, you can’t shop around for the cheapest LMI provider. Your bank will organise cover and let you know how much you’re up for.

However, different lenders use different LMI insurers. So the premium can vary depending on the lender you choose.

That’s why it’s important to talk to us.

We can explain what the LMI premium is likely to be for each lender you’re considering. This could see you potentially save on LMI.

2. Pay LMI off gradually

Instead of paying LMI in a lump sum, your lender may agree to add the cost to your loan balance.

This way you can pay LMI off gradually as part of your normal home loan repayments, but the downside is you’ll likely be paying interest on that LMI amount over the life of your home loan.

Remember that example we used earlier of a $500,000 apartment with a $50,000 deposit? Adding the LMI premium to your home loan in that scenario could result in your monthly repayments increasing by about $45-65 per month over the life of a 30-year home loan, depending on the interest rate at the time.

Alternatively, some LMI insurers can allow you to pay your LMI premium in monthly instalments until you’ve got a suitable amount of equity built up in the property that your lender is satisfied with.

3. Have LMI waived altogether

Like the sound of sidestepping LMI completely?

Here are a few strategies that could scratch the cost of LMI from your buying budget:

– Use your job: some lenders waive LMI for workers in certain professions such as doctors, lawyers, accountants, vets, engineers and pharmacists.

– Tap into the Home Guarantee Scheme: this scheme sees the Australian government guarantee your loan, allowing first home buyers to buy with just a 5% deposit, or as little as 2% if you are a single parent – and no LMI to pay.

– Ask a family member to guarantee your loan: a guarantor can provide additional security, such as the equity in their own home, to raise the security on your loan up to the equivalent of a 20% deposit.

Next step? Contact us

If you’re having trouble saving up for a 20% deposit, contact us today.

We can help give you a clearer idea of what you could be up for in LMI, and help you discover any steps you may be able to take to keep a lid on the cost.

How long it takes to save a deposit (and how to fast-track it)

Thu, 31 Oct 2024 04:36:00 GMT

How’s your patience going?

Planning to buy your first home? It takes (on average) about five to six years to save a deposit at present. But who’s got the patience to save for six years? Today we’ll look at four ways you could fast-track home ownership.

They say patience is a virtue. But the narrator/protagonist of the poem that coined that famous phrase was an idle vagabond – not exactly an inspiration for eager homeowners in a competitive market.

So today we’ll throw patience out the window and walk you through some ways you could beat the national average of 5.6 years when it comes to saving a house deposit (all while keeping your virtue!).

1. Buy with less than a 20% deposit

It is possible to buy a home with a deposit of less than 20%. Some lenders will take a 10% deposit. Others may accept a deposit as low as 5%.

The downside is that with anything less than 20%, you will usually be asked to pay lenders mortgage insurance (LMI), unless you tap into the scheme in number 3 below.

LMI protects the lender (not you) if you can’t keep up the loan repayments.

The downside is that the one-off LMI premium can be pricey, potentially adding more than $10,000 to the upfront cost of buying a home.

You may be able to add the cost of LMI onto your home loan and pay it off over time, although this will increase your repayments and you’ll end up paying interest on the insurance premium.

That said, paying LMI offers a way to get into the market sooner, before property values potentially rise higher.

It’s a solution that can work for some first-home buyers, and we can explain if it could work for you too.

2. Have a guarantor in place

A guarantor is a person, usually a close relative such as mum or dad, who provides additional security for your home loan.

This security usually takes the shape of the guarantor’s home equity. It means guarantors don’t need to hand over any cash, and they can often specify what percentage of your loan they will guarantee.

With a guarantor in place, you may potentially be able to borrow 100% of your home’s value without paying LMI, although lenders still like to see that you have a strong savings record, often with at least a 5% deposit under your belt.

If you have a close family member who is happy to be your guarantor, talk to us about the different home loan options available.

3. Tap into the First Home Guarantee scheme

No guarantor? No worries. If you can save a 5% deposit you could be eligible for a spot in the First Home Guarantee (FHG) scheme.

The FHG sees the federal government guarantee up to 15% of your loan.

While you won’t receive a cash payment, the government guarantee can get you over the line for a loan with just a 5% deposit, and the real sweetener is that you won’t need to pay LMI.

Places in the FHG scheme are limited, and eligibility conditions apply. So talk to us to find out if the scheme offers a pathway for you to buy a place of your own sooner.

4. Using your super account to fast-track savings

The First Home Super Saver Scheme could also be worth a look.

The scheme could boost your savings for a deposit by 30% compared to a regular savings account, according to the federal government . All you need to do is make voluntary contributions to super – up to $15,000 annually.

Now here’s the good bit: voluntary contributions into your super are taxed at only 15%, which is usually less than your marginal income tax rate.

Plus your super account usually has the potential for higher investment returns compared to the interest paid on a regular savings account.⁣

When you’re ready to buy, you can withdraw the money you’ve voluntarily contributed – up to $50,000 – plus any associated earnings.

Better still, if you’re buying with a partner, together you can withdraw up to $100,000 plus associated earnings.⁣

Why fast-tracking your deposit may be important

Last but not least, it’s important to note that PropTrack’s national average calculation of 5.6 years assumes a deposit equal to 20% of today’s median home prices.

However, it’s more likely than not that national property prices will be even higher by the time you’ve saved up your house deposit – no matter whether that’s in three, five or six years.

Long story short, the longer you take, the higher your deposit might need to be.

So the sooner you act, the better off you could be.

If you’d like help, get in touch with us today. We can run through your situation and let you know which of the strategies above might be a good fit.

Could rate cuts mean house prices heat up again?

Thu, 31 Oct 2024 04:36:00 GMT

To buy, or not to buy?

Thinking of holding off buying until interest rates fall? Wait until you see what could happen to home prices. Here’s why it could make sense to buy sooner rather than later if you’re home loan-ready.

September saw the nation’s official cash rate kept on hold once again. But there is growing consensus that the RBA may cut the cash rate at one of its next few meetings.

Several of the big banks, including Westpac and NAB , are expecting rate cuts in the first half of next year.

Others, such as the Commonwealth Bank, are forecasting a rate cut in time for Christmas

While lower rates can’t come soon enough for many struggling mortgage holders, there is one issue that has been largely overlooked, and that’s how home prices might respond to a cash rate cut.

Here’s what the experts say may happen.

How home values could respond to rate cuts

First up, it’s worth pointing out that higher rates have been with us since mid-2022 .

Yet property values have climbed rather than cooled since then, with the national median value rising from $752,507 in June 2022 to $807,110 today .

With that in mind, if interest rates fall, many pundits believe home values could head even higher.

The question is, how much higher?

Ray White Economics has done the maths based on past property price movements following a long-awaited rate cut.

According to their analysis, home prices nationally could rise by 0.6% within just one month of a rate cut.

REA Group has teased out the numbers further, saying that based on current median values, a 0.6% price rise could add an extra $5,000 to the average cost of a home across Australia.

And that’s for just one rate cut.

SQM Research director Louis Christopher says four cuts next year, while still a more remote possibility, could cause a huge rebound in property markets that have recently been weaker – such as Melbourne and Sydney.

The impact in your state capital

Exactly how home prices respond to rate cuts is likely to vary between locations.

Here’s what Ray White Economics and REA Group say could happen in capital cities in the first month after one official rate cut:
– Sydney: values rise 1.4% adding an extra $15,300 to the median property value.
– Melbourne: values rise 1.0%, pushing up the median price by $8,000.
– Brisbane: values climb 0.4%, adding $3,400 to home prices.
– Canberra: values increase 0.5%, pushing up prices by just over $4,000.
– Adelaide: values rise 0.3%, adding $2,300 to property prices.
– Perth and Darwin: no change to values.

It’s worth stressing that these numbers reflect how the market has responded to rate cuts in the past. Things could be very different in the future.

Perth, for example, currently has one of the nation’s strongest property markets , and Ray White Economics suggests that home values there could rise further following a cut to the cash rate.

Should I buy now?

Holding out for interest rate cuts may seem to make sense. After all, lower rates can boost your borrowing power.

But as we have seen, it could also work against you.

Lower rates may push up home prices, and potentially fuel increased competition among buyers.

That’s why we believe the “right” time to buy is when you are ready.

And today’s spring market comes with the added advantage of more choice for buyers.

According to CoreLogic, the flow of freshly-advertised housing stock hasn’t been this high at this time of the year since 2021.

So if you’re interested in buying your first or next home (with the potential benefit of getting one or several rate cuts soon after your purchase), get in touch with us today.

We’ll help you assess your borrowing power in the current market, and if you find the right house, we’ll help you find the right loan for it.

Why 9 out of 10 first-home buyers use a mortgage broker

Thu, 26 Sep 2024 00:52:00 GMT

Here’s how we can help

Remember the first time you stepped into a gym? It’s unlikely you swaggered your way over to the free weights rack and started busting out squats. Well, it turns out buying your first home can be just as daunting, with 91% of first-home buyers turning to a mortgage broker for guidance.

When it comes to financial decisions, they don’t come much bigger than buying a home.

So it’s no wonder that plenty of first-home buyers feel a mix of nerves and excitement.

It’s also understandable that more than one-in-two first-home buyers feel the need for support throughout the home-buying process.

And for nine out of ten first-home buyers, that valuable support comes from a mortgage broker, according to a recent report by lenders’ mortgage insurance (LMI) provider, Helia.

How a mortgage broker helps

Finding a home you like is just part of the home-buying equation.

Identifying a home loan that is right for your needs, with a competitive rate, completes the picture.

But without skilled help this can be easier said than done.

The Helia survey found close to half (45%) of first-home buyers find it difficult to research which loans are right for them. More than one-in-two (52%) anticipate challenges in obtaining the loan they need.

This is where mortgage brokers can help.

We spend time getting to know you and your financial needs. This allows us to narrow down the choice of home loans that may be a good match for your needs.

We also know what lenders look for when they approve a home loan.

We can explain whether you’re home loan ready right now, or discuss the steps you can take to help pave the way for home loan approval in the future.

Better yet, we’ll stay in touch to offer tips and encouragement along the way.

We’re about more than a home loan

The benefits of a mortgage broker go beyond helping you land a home loan.

According to Helia’s study, first-home buyers say mortgage brokers:
– help home buyers understand their financial situation and borrowing power
– provide valuable support, guidance and expertise throughout the complex buying journey
– help save you time and effort.

We can also tap into our wealth of experience to suggest strategies and schemes you may not have considered, such as rentvesting, having a close relative act as a guarantor for your home loan, or the federal government’s 5% deposit First Home Guarantee scheme .

After all, there are multiple pathways to home ownership, and options such as rentvesting can open up new suburbs for you to buy in, while letting you live in the location of your choice.

Get in touch with us today to find out more.

TikTok vs talking to your broker? It’s no contest

Thu, 26 Sep 2024 00:52:00 GMT

Keeping it Reel

TikTok and Instagram reels are fun, fast and free – but it’s important to be picky about whose content you’re viewing, especially if you’re in the market for a home loan.

Chances are, if you’re reading this blog via a social media site, then you’ve also watched a TikTok or Instagram video before, too.

In fact, more than 8.5 million Australians are active on TikTok and almost 14 million on Instagram – making both platforms key players in Australia’s social media landscape.

Social media platforms certainly helped us while away the hours during COVID lockdowns, and they’re still keeping us entertained as we check out what Korean office workers eat for lunch, short clips of our favourite comedians, or discover what a family of 10 has for breakfast.

But while many of the videos seem like harmless fun, there are some pitfalls you might want to avoid in the financial services landscape.

69 million views for #Mortgage

Interestingly, almost one-in-three Australians (30%) say they turn to social media for money guidance .

And Finder research shows people act on what they see, especially younger subscribers.

Almost one-in-two Gen Zs (48%) have taken action on their finances following guidance from a content creator, compared to 17% of Gen X.

That’s no real surprise. After all, the hashtag #TikTokmademebuyit has gained 31.8 billion lifetime views and counting.

What is surprising, is how many Australians head to TikTok or Instagram looking for home loan tips.

For example, #Mortgage content has racked up 69 million views on TikTok alone in the past 12 months.

Knowing who you can trust on TikTok

On one hand, it’s great that social media is breaking down money taboos.

And there’s no doubt that TikTok, Instagram, Facebook and LinkedIn can be handy sources of information for home buyers.

The catch is that almost anyone can post on social media, and when we’re talking about mortgages, which is the largest financial decision most people will ever make, the last thing home buyers need is dodgy advice.

So it pays to check who is behind the video.

Australia is one of the few countries globally where influencers on social media have to be suitably licensed before they can offer advice on financial products.

Mortgage brokers also have to follow strict industry rules when it comes to marketing and advertising. And many brokers are supported by their aggregator’s compliance team who double-check content for accuracy and other legalities.

However, TikTok and Instagram don’t just show videos created by Australians.

The platforms’ algorithms are designed to deliver more of the same sort of content you’ve shown an interest in.

So, it’s likely that if you start watching posts on financial strategies around home loans, debt recycling, debt consolidation or property investment strategies, you could come across content created by people based outside Australia, in countries where the rules are far less rigid, different, or non-existent at all.

The bottom line

No matter whether you’re just starting your home buying journey, or you’re ready for the next step on the property ladder, social media can be an entertaining and accessible source of information.

Just be sure to check that any content you’re viewing on home loans or investment property loans comes from a licensed mortgage broker based in Australia. Better still, pick up the phone and give us a call.

Sure, we’d (probably) lose in a dance-off against your average TikTok creator.

But we can provide you with home loan information tailored to your situation. And that can give you a lot more value – potentially in a lot less time – than trawling through thousands of #homeloan videos and posts.

The home loan feature 70% of new borrowers are hooked on

Fri, 13 Sep 2024 06:08:00 GMT

Here’s what they’ve all been angling for

When it comes to home loan features we’re spoiled for choice. Even basic loans can come with a fisherman’s basket full of options. But one feature in particular is being targeted by seven out of 10 home buyers.

Faced with high interest rates and a cost of living crunch, home owners in droves are using home loan offset accounts to their advantage.

One of the nation’s biggest banks, NAB, reports that almost 70% of new home loan customers are opting for an offset account , up from 50% just two years ago. And it can help them save on interest.

How do offset accounts work?

An offset account is typically an everyday account (or multiple accounts) linked to your home loan.

You won’t earn interest on the money stored in the offset account/s. Instead, the balance is deducted from, or ‘offset’ against, the balance of your home loan when loan interest is calculated.

Say for instance you have a home loan of $400,000 and $20,000 in the linked offset account. You’ll only pay interest on $380,000 ($400,000 less $20,000).

This can reduce your monthly interest costs. And as your monthly repayment amount stays the same, more of each regular repayment goes towards paying off the loan balance. That is: more of your repayment amount goes to paying down the principal component of your principal + interest loan.

This in turn further reduces next month’s interest cost, too.

In fact, Macquarie Bank calculates that based on the above scenario with $20,000 in your offset account over the life of a 30-year loan (with an interest rate of 6%), you can save more than $87,000 in interest, and shave more than three years off your loan.

Even better, money in the offset is usually available to withdraw if needed – so the cash can be made available for unexpected bills.

How to use an offset account to your advantage

The bigger the balance of your offset account, the more you’ll likely save on loan interest.

According to NAB, one way to grow the value of your offset account is with a ‘three Cs’ strategy: crediting, consolidating and cutting back where you can.

Asking your employer to ‘credit’ your salary directly into the offset account could help maintain a higher balance.

If you have cash stored in a savings account, you could consider ‘consolidating’ it into your offset account. You may be able to earn interest of up to 5% on a savings account but if your mortgage rate begins with 6%, chances are you’ll save more with an offset account than you’ll earn on a savings account. Plus, interest savings in an offset aren’t taxed.

Meanwhile, ‘cutting’ back household spending where possible can help you boost the balance of your offset account to improve interest savings.

It’s an approach being used to great effect by plenty of home owners. NAB reports a 55% increase in the value of its offset accounts since the pandemic – rising from $29 billion in 2020 to more than $45 billion today.

Is a home loan offset account right for you?

Despite the popularity of offsets, they may not be a suitable choice for everyone.

An offset home loan can sometimes come with a higher rate than a more basic loan, and unless you consistently have a reasonable balance in the linked offset account, you could end up paying more than you save in interest.

Also, the money you store in an offset account could be used elsewhere as an investment – so it’s worth weighing up whether to prioritise reducing your home loan now or investing for the future.

If you’re not sure where to begin, contact us today to find out if a home loan offset could help you get ahead with your mortgage and save on interest.

Fixed rates tumble: a sign of things to come?

Fri, 13 Sep 2024 06:08:00 GMT

Ever thought about locking in a fixed rate?

When will interest rates fall? It’s the question everyone is asking right now, and while speculation swirls about future rate cuts, the latest moves in fixed rates suggest we may not have to wait too much longer for variable interest rates to head south.

While about 4-in-5 Australian households are currently on a variable-rate mortgage , fixed-rate home loans shouldn’t be overlooked.

Locking into a fixed rate can offer several advantages, including certainty of repayments – which may make budgeting easier – as well as protection from possible rate hikes during the fixed term.

Right now, the direction of fixed rates is attracting plenty of attention.

Many lenders are cutting their fixed rates

A growing number of lenders, including several major banks, are starting to cut fixed rates across all terms, according to Mozo’s latest banking round-up .

Macquarie Bank, Commonwealth Bank, HSBC, Bank of Queensland, Westpac and its stable of brands – St.George, BankSA and Bank of Melbourne – have all recently cut some of their fixed rates.

They were joined by smaller lenders such as Hume Bank, MOVE Bank and Great Southern Bank, which also dialled down their fixed rates.

What’s especially exciting is that a number of these rate cuts were surprisingly large, in some cases worth half a percent or more for 2- to 3-year fixed rate terms.

Why are fixed rates falling?

Home loan interest rates – both variable and fixed – are shaped by a variety of factors.

When it comes to fixed rates, a key driver can be lenders’ forecasts of where they believe interest rates are headed.

In this way, fixed rates can be a bellwether for the direction of future interest rates.

Among the major banks, Commonwealth Bank expects a 0.25% RBA rate cut in late 2024.

ANZ is anticipating the RBA to cut rates from about February next year .

NAB has pencilled in a rate cut by mid-2025 , and Westpac is expecting several rate cuts starting in March 2025 .

The good news is that none of the big four banks seem to be anticipating rate hikes any time soon, and that’s great for those with a home loan.

What could this mean for you?

The trend to lower fixed rates suggests variable rate cuts may not be too far away either.

Right now though, fixed rates can be lower than variable rates depending on your choice of lender, fixed term and the size of your deposit.

If you’re currently struggling with your home loan repayments, locking in a fixed rate for the next 1, 2 or 3 years might help give you some certainty and home loan repayment relief.

But you’ve got to weigh that up against the potential of any variable rate cuts that you could miss out on in that same time period.

Bear in mind, predictions of rate cuts are exactly that – forecasts, not guarantees of lower rates.

Another option to consider is splitting your home loan between fixed and variable rates, which can allow you to get the best of both worlds: the certainty of a fixed rate plus the savings of a variable rate if interest rates start to head south.

Call us today to understand if fixing or splitting your loan rate could help you save.

How much has your home’s value risen by?

Thu, 29 Aug 2024 00:30:00 GMT

Time in the market rather than timing the market

We’ve all heard the rule of thumb about property being a long-term investment. Well, get this: many home owners have seen the value of their property quintuple within the timeframe of a typical 30-year mortgage.

Ask any long-term home owner what they originally paid for their property, and chances are they’ll respond with an eye-wateringly low figure.

Plenty of Australians look back on the price they paid for their home and marvel at how low it seems relative to current values – often while breathing a sigh of relief that they bought when they did.

This is not a recent trend.

Property has a strong track record for growth

Fun fact: over the last 100 years , residential property values in Australia have risen by an average of 10.9% annually.

Sure, there can be short term dips and periods when values plateau, but the broader trend has been upwards .

In dollar terms, this price growth can be mind-boggling.

Take Sydney, for instance, where the median house price back in mid-1992 was $221,770 . Thirty years later, in 2022, the median value was $1,124,421. Today, it is $1,473,038 .

It’s a similar story across all our major cities.

But what if you purchased more recently? What sort of increase in value has your home seen?

How much have home values increased since you purchased?

CoreLogic delved into the history books to see how national property values have risen since the year of purchase, starting with the mid-90s.

Looking at the results below, it’s pretty clear that the longer you’ve owned your home (or investment property), the bigger the potential rise in value.

Buyers who purchased about 30 years ago in 1995 could find their property is now worth more than five times what they originally paid thanks to a 437% increase in value.

If you purchased about 20 years ago back in 2005, your home may have jumped in value by 148% (2.5 times more than you bought it for).

Closer to the present, homes purchased in 2020 may have seen a 34% rise in value.

And even if you purchased your home last year, you may have already notched up capital growth of 4%.

Increase in national home values since year of purchase

1995: 437%
2000: 308%
2005: 148%
2010: 94%
2015: 57%
2020: 34%
2023: 4%

Source: CoreLogic article . Direct link to graph here .

Why a rise in your home’s value matters

A rise in your home’s value is worth much more than bragging rights at your next barbecue.

Increasing property values are a key source of household wealth in Australia.

Better still, a rise in your home’s value can make it easier to refinance to a more competitively-priced home loan, or provide the equity to invest in a rental property or achieve other personal goals such as funding your kids’ education.

Talk to us to start your property journey

The upshot is that when you buy a home – either as a first home buyer or upgrader – it’s worth keeping one eye on the future.

With the passage of time, the price you paid today can start to look like a better deal than it felt at the time, and you could be grateful you purchased when you did.

Call us today to find the home loan that helps you get started on your property journey, or to unlock equity in your current property.

Property market set to blossom this spring

Thu, 22 Aug 2024 04:25:00 GMT

The weather and market are heating up

The sun is out – and so are the buyers! Spring is traditionally a peak period for property, and there’s a good reason why spring 2024 is shaping up to be a bumper season. Here’s how to prepare if you’re planning to buy in the weeks ahead.

At last! It’s time to pack away the winter woollens, and dust off the t-shirts and shorts.

Spring is just around the corner, and that means sellers will be sprucing up their homes to attract as many buyers as possible.

Spring has always been a popular time for sellers and buyers alike. Gardens look lush, the warmer weather sees us head outdoors, and a home purchase can be settled in time for Christmas.

But there’s another reason why spring 2024 is likely to be especially busy.

20% more homes to choose from

Over the past decade, spring has seen new listings jump by more than 18% across the country, according to CoreLogic .

This gives buyers a wider selection of homes to choose from – and they certainly take advantage of it. Home sales across the country typically rise by more than 8% in spring.

This year, buyers could have an even bigger choice of homes to pick from.

According to CoreLogic , autumn and winter have seen real estate listings flow onto the market at an above average pace.

That’s seeing the market shift towards more of a balance in supply and demand – especially compared to last year, when sellers had the upper hand.

Even so, buyers should prepare for the spring selling season.

Quality homes don’t stay on the market for long. In Perth, for example, the median selling time is just 10 days at the moment , so buyers who act fast can have a competitive advantage.

3 steps to give yourself an edge

In the fast-paced spring market, home buyers could put themselves ahead of the competition by following three simple steps:

1. Establish a wish list

The more properties you inspect, the easier it can be to lose track of what you really want in a new home.

Cut through the confusion by making a list of must-have features. Follow this up with a rundown of features that are nice but not essential.

Having a wish list to work from can be a real time saver as it lets you focus on properties that tick all the boxes for your ideal home.

2. Know what you can afford

There’s no room for guesswork when it comes to buying a home.

Talk to us for a clear idea of your borrowing power. This lets you set a buying budget so you know which homes sit comfortably within your price range.

3. Have your home loan pre-approved

Nothing says you’re a serious buyer like having mortgage pre-approval. It’s a simple step that can eliminate a large part of the stress associated with home buying.

And if you’re buying at auction, pre-approval lets you bid with confidence while setting a clear limit for your highest bid.

We can help you arrange home loan pre-approval for a loan suited to your needs.

We’ll spring into action on your behalf

As the weather starts to heat back up, so too will the housing market. So if you’re looking to buy, now is a good time to get organised so that you’re home loan ready if the opportunity arises.

Call us for a personalised chat about your property goals, and discover how we can help you achieve them with a home loan that suits your needs.

How to buy an investment property using your home’s equity

Thu, 22 Aug 2024 04:25:00 GMT

How to become a property investor

Want to grow your investment portfolio but have most of your wealth tied up in your family home? You may be able to leverage recent gains in the property market as equity for an investment property. Let’s take a look.

We all have a few financial goals.

And right now, investing in a rental property is one of the more popular investment goals among Australians.

In fact, more than one-in-five Australians (21%) aspire to own investment properties to build their wealth, according to MLC’s Financial Freedom report . And interestingly, this percentage increases to 27% for Gen Zs and 23% for Gen Ys.

Investors are also piling into property, with lending for investment properties up more than 30% over the past year, according to Australian Bureau of Statistics data .

It’s not hard to see the appeal.

Rents have surged 39.7% over the past five years, rental vacancy rates are wafer thin at 1.3% , and home values nationally have jumped 13.5% since January 2023

Recent property price increases can hold the key

CoreLogic’s latest Pain and Gain report reveals that property profits have just hit a 14-year high.

This saw homes resold in the first quarter of 2024 dish up a median profit of $265,000.

So how does ‘cashing out equity’ in recent property gains work if you don’t sell your home?

Here’s one example.

Let’s say you bought a $750,000 house five years ago that, due to property price increases in recent years, is now valued at $1 million.

And let’s also say you took out a $600,000 loan for that house, which you’ve managed to pay down to $500,000.

By refinancing that remaining $500,000 home loan balance into a $700,000 loan (70% of your property’s new market value), you can unlock $200,000 in equity to use as a deposit for an investment property.

It’s also worth noting that when using this strategy banks will typically let you borrow up to 80% of a property’s market value.

So if you upped the ante and refinanced to an $800,000 loan, you could unlock $300,000 in equity.

This allows you to enjoy all the perks of becoming a property investor – including earning rental income, capital gains and possible tax benefits – potentially without drawing upon cash savings.

Better still, if your rental property grows in value, the rising equity in that property can be used to invest in additional properties.

Other strategies to become a property investor

There are plenty of pathways to becoming an investor.

You may have the funds available to pay a cash deposit.

Or you might be thinking of holding onto your current home, and using it as a rental after you upgrade to your next home.

Or, you might have other investment goals outside the property market altogether (such as using your home’s equity to invest in shares or boost your super balance).

What matters is that you know the options available for your situation.

Like to learn more? Call us today to find out how you could become a property investor.

Does your job come with home loan perks?

Thu, 08 Aug 2024 01:29:00 GMT

Let’s take a look

Your job can provide more than an income. When it comes to being approved for a home loan, certain roles can enjoy favourable treatment from lenders. So today we’ll look at some of the occupations that can offer up home loan perks.

One of the first things a lender will look at when you apply for a home loan is your ability to manage repayments. And for most of us, that comes down to having a job that pays a regular income.

However, not all jobs – and types of income – are treated in the same way by every lender.

From nurses and other essential workers – to lawyers and accountants – various occupations can enjoy special treatment.

Essential workers – additional types of income considered

Where would we be without our essential workers – the nurses, firefighters, police and ambulance officers who play such a key role in our communities?

Despite the valuable services they provide, essential workers aren’t usually among the top income earners, and they can struggle to buy a home of their own near their work – especially those within 15kms of Sydney and Melbourne CBDs.

However, a number of lenders are helping out in a variety of ways.

Some banks have introduced home loans designed for essential workers that come with lower interest rates. According to Mozo , this can see essential workers pay some of the lowest rates in the market.

Other lenders take a more generous approach to the types of income essential workers earn when it comes to determining their loan serviceability.

For instance, some banks will include 100% of an essential worker’s overtime pay in their income calculations. Others will add in allowances received by essential workers.

The definition of ‘essential workers’ varies across lenders and policies, but can include:

– frontline ambulance officers
– paramedics
– firefighters
– police officers
– corrective services officers
– nurses
– aged care or disability workers
– teachers
– early childhood educators
– defence or military personnel.

Lenders’ mortgage insurance waiver

Several of the big banks offer other types of support that can make home buying more accessible.

Westpac, for example, may waive lenders mortgage insurance (LMI) for nurses and midwives who only have 10% deposit.

Usually, LMI is applicable when borrowers have a deposit below 20%.

A $90,000 per year minimum income is needed for the below professions (casual incomes calculated over 48 weeks) to apply with just a 10% deposit with Westpac:

– audiologist
– chiropractor
– midwife
– occupational Therapist
– osteopath
– physiotherapist
– podiatrist
– psychologist
– registered Nurse
– radiographer
– sonographer
– speech Pathologist
– optometrists
– pharmacists
– veterinary practitioners.

Meanwhile, for the below professions there is often no minimum income requirement to secure a loan with a 5% deposit and no LMI:

– dentist
– general practitioners
– hospital-employed doctors (intern, resident, registrar, staff specialist)
– medical specialists (as per the Medical Board of Australia).

Perks for home buyers in professional occupations

Home buyers who work in high-income professions may find it less challenging than essential workers to pull together the funds to buy a home. But they too can be eligible for a few home loan sweeteners.

The most common perk is a waiver of LMI , even for borrowers with a deposit as low as 5%.

As a guide, buying an $800,000 home with a 5% deposit of $40,000 would normally attract an LMI premium of $35,000 .

LMI waivers are usually available to medical professionals, lawyers and accountants , though they can extend to sports and entertainment stars. They’re generally offered because banks are keen to form long-term relationships with these customers.

Call us today

It can take a bit of hunting around to know which lenders provide valuable perks for your occupation.

And if your job involves shift work – or long hours such as a doctor or lawyer – the last thing you want is to spend your spare time trawling the mortgage market. One way to save time is to call us.

We can explain the various benefits you may be entitled to across a range of loans and lenders, and discuss any conditions banks may impose.

Why multi-bedroom homes could be appealing for investors

Thu, 08 Aug 2024 01:29:00 GMT

Is fear of rejection holding you back from your life goals?

Fri, 26 Jul 2024 05:23:00 GMT

Here’s how to overcome it

Scared to apply for a home loan? You’re not alone. Fear of rejection has stopped one in five Aussies from applying for finance over the past year. We explain what’s driving this fear, and how you can boost your chances of getting approved.

No one enjoys rejection. But despite this, there are plenty of times in life when we put ourselves in a position where rejection is a possibility.

From applying for a new job to asking the love of your life to marry you, the risk of a knock back isn’t too far away.

Yet we give it a go because the rewards of success outweigh the disappointment of being turned down.

It’s the same when it comes to applying for a home loan.

Sure, you could get a ‘no’ from a lender. But if you get the thumbs up, you’re on the way to buying a home!

This is worth bearing in mind because a new survey by Finder shows that over the past year, one in five (19%) Australians have avoided applying for finance, including home loans, out of fear they’d be knocked back.

The rejection concern that bothers borrowers

According to the research, one key aspect of being knocked back for a loan raises particular concerns for people – and that’s what rejection could do to their personal credit rating.

Let’s set the record straight here.

Being rejected for a loan is unlikely to affect your credit score – a knockback won’t even appear on your credit file.

The thing that is much more likely to impact your credit rating is applying for a loan in the first place.

When you submit a loan application, the lender will usually take a look at your credit report. This is called a ‘hard enquiry’.

It is these enquiries that can lower your score, and they can stay on your credit file for up to five years.

That’s why it makes sense to minimise the number of loan applications you make.

Better still, try and stick to one application and get it right the first time. And that’s where we can really help you out.

How to overcome fear of home loan rejection

Applying for a home loan can be nerve-wracking. After all, there’s a lot riding on loan approval.

But if fear of rejection is holding you back, there is a simple solution. And that’s getting in touch with us.

We can walk you through your credit report to explain any issues that could raise concerns with a lender. And if your credit score is a little low, we can share tips on how to improve it.

Keep in mind though that your credit score is just one piece of the picture that banks look at.

We look at your total position in terms of home loan readiness.

Your income, household expenses, any other debts, and a variety of additional criteria that vary between lenders, all go into the mix of factors that decide whether you get the green light for a loan.

We’ll review it all, help you iron out any kinks in the application, and then line you up with a lender (and loan) that’s a good fit for you.

Low deposit scheme opens up to New Zealander visa holders

Fri, 26 Jul 2024 05:23:00 GMT

Want to buy your first home in Australia?

Kiwis hoping to buy a first home in Australia have just scored gold! The popular Aussie low-deposit home buying scheme has been opened up to visa holders from across the Tasman. Here’s what you need to know.

Sure, the Kiwis have the All Blacks, the glaciers and landscapes fit for a Hobbit.

But Australia offers New Zealanders something that could deliver more of an adrenaline rush than bungy jumping in Queenstown.

And that’s the chance to buy their first home in Australia with as little as a 5% deposit.

The popular Home Guarantee Scheme (HGS) lets Aussie citizens and permanent residents buy their first home in Australia with just a 5% deposit. There’s a version for regional first-home buyers , too.

Single parents can also use the scheme to buy a home with a 2% deposit.

And Housing Australia has just confirmed to us that New Zealand Special Category Visa (SCV) holders are now considered ‘permanent residents’ for eligibility purposes for the HGS (more on the SCV below).

But first, how does the scheme work?

The HGS helps first home buyers and single parents buy a place of their own even when they have a deposit smaller than the standard 20%.

Essentially, the government acts as a guarantor for the home buyer’s loan, so there is no need to pay lenders mortgage insurance (LMI), which can help you save on upfront costs.

Not paying LMI can save buyers anywhere between $4,000 and $35,000, depending on the property price and deposit amount.

How many New Zealanders could benefit from this change?

Australia and New Zealand have always shared a special bond. And we always welcome our mates from across the ditch.

That’s seen a steady stream of travel back and forth across the Tasman, but in recent years Kiwis have been pulling up stumps and moving to Australia in big numbers.

In the 2022-2023 financial year, more than 41,000 New Zealanders relocated to Australia on an SCV, according to the Australian Bureau of Statistics. That’s around 3,400 Kiwis arriving in Australia on an SCV every month.

This visa – while it has the word “special” in it – is the main visa New Zealanders get when visiting Australia and allows them to visit, study, stay, and work in Australia and is granted upon arrival (so long as they meet certain security, character and health requirements).

It can also allow them to directly apply for Australian citizenship – a pathway that many of the 670,000 Kiwis living in Australia would have completed.

Can’t see anything about New Zealanders on the official HGS website?

Here’s the good news.

We reached out directly to Housing Australia, which runs the HGS, to confirm that New Zealanders can apply for the low deposit scheme.

It turns out that New Zealanders who hold a Special Category Visa Subclass 444 (SCV) are now regarded as permanent residents for the scheme and are therefore eligible to apply.

Of course, there are other eligibility conditions. These include maximum price caps on the home you can buy, with price caps varying across the country. The most straightforward way to find out if you might be eligible to take advantage of the HGS is to call us. We can walk you through the scheme, and explain whether or not you are eligible to apply.

Not all lenders have signed up to the HGS

No matter whether you’re a dinky-di Aussie or a Kiwi making a fresh start in Oz, it’s important to know that the HGS is not available through every lender.

We can let you know which banks have signed up to the scheme, and help identify loan options from participating lenders that may suit your needs.

It’s also important to know that places within the scheme are limited, and who knows how long New Zealand SCV holders will be considered ‘permanent residents’ when applying for the scheme, so get in touch with us today to get the ball rolling.

How much could you expect to borrow for a home in 2024?

Fri, 26 Jul 2024 05:23:00 GMT

Do you know your borrowing capacity?

As property prices hit record highs across a number of cities, it’s no surprise that new home loan balances are also nudging towards fresh peaks. Today we’ll reveal what the ‘average’ new home loan is in your state, and provide you with some handy tips to help bring down your balance sooner.

High interest rates and a cost of living crunch haven’t stopped home values rising 8% nationally over the last 12 months.

According to CoreLogic that’s added an extra $59,000 to the average Australian home’s value .

It’s great news for home owners, but not so good for buyers, who may have to take out a bigger loan to fund a property purchase.

On the plus side, not everyone is having to upsize their home loan.

In some cities, new mortgage sizes are staying pretty still or becoming slightly smaller.

What’s the average in your state?

Across Australia the ‘average’ new mortgage is at a record high of $626,055 as of May 2024 , according to the Australian Bureau of Statistics. That’s up from $584,607 just 12 months earlier in May 2023.

That means you’d need to be able to make mortgage repayments of about $3,875 per month (assuming that you take out a 30-year principal and interest home loan at 6.3%).

However, ABS data shows plenty of variation in new loan sizes in different states and territories.

Here’s what’s happening across the country:
NSW – the average new home loan size is currently $767,584, up from $720,029 in May 2023.
VIC – average new home loan is $601,891, slightly up from $598,949 in May 2023 but well below the peak of $651,364 in January 2022.
QLD – the sunshine state’s average new home loan size is $586,627, a solid increase on the May 2023 average of $521,609.
SA – average new home loan of $541,775, a big jump on the May 2023 average of $467,438.
WA – average new home loan of $538,860, up from $472,080 in May 2023.
TAS – the Tassie market has seen very little movement in new loan sizes. The current average is $462,324, just a few thousand dollars shy of the $465,313 average in May 2023.
ACT – the average new home loan across Canberra is $614,242, up from $589,130 in May 2023.
NT – in the Top End, the average new home loan has increased slightly, currently sitting at $437,427 compared to $424,873 in May 2023.

How to potentially whittle away your home loan sooner

No matter where in Australia you are buying a home, managing a home loan can be stressful at a time when interest rates are high.

So, it’s important to look for ways to help ease the pressure.

Choosing an offset home loan, for example, can let you put spare cash to work by helping to lower your monthly interest charges.

It can also allow you to build up a savings buffer while also reducing the overall interest you pay on the loan, and thus, bring the balance down quicker.

If you are unlikely to have substantial savings, looking for a loan that lets you make small, extra repayments at no additional cost can be a way to pay down the loan sooner, and save on interest costs.

Even something as simple as switching from monthly to fortnightly loan repayments could deliver savings on your interest repayments over the course of the loan.

Paying half the monthly amount every fortnight can mean paying the equivalent of an extra month’s repayments each year, helping you forge ahead with the loan without too big an impact on your household budget.

What matters is that you speak to us about a mortgage that suits your unique needs. One that gives you the benefits of the loan features you need, plus a competitive interest rate.

So if you’ve got your eye on a potential new home – or just want to find out your borrowing capacity so you can start searching – get in touch with us today.

50,000 low-deposit spots open for first home buyers and single parents

Thu, 04 Jul 2024 02:17:00 GMT

Keen to buy your first home?

The new financial year has kicked off with a bang for first home buyers! A whopping 45,000 more places have opened up for them under the Home Guarantee Scheme, as well as 5,000 more spots for single parents. Here’s how it could help you buy a home sooner.

Home ownership has long been the great Australian dream, but high property prices are making it tough to save a 20% deposit for many young families.

That’s where the federal government’s Home Guarantee Scheme (HGS) comes in.

It gives first home buyers a leg up into the property market even if they have just a 5% deposit, and it’s proving to be very popular.

In fact, it’s helped more than 160,000 Australians buy or build their own home since the scheme launched four years ago.

Places in the HGS are capped each year, but the good news is that an extra 50,000 spots have just been announced for the 2024-25 financial year .

Not sure what the scheme is about?

Let’s take a closer look at what’s involved by answering a few FAQs.

What is the Home Guarantee Scheme?

The HGS helps first home buyers and single parents buy a place of their own even when they have a small deposit.

Essentially, the government acts as a guarantor for the home buyer’s loan, so there is no need to pay lenders mortgage insurance, which can be a big saving on upfront costs.

In fact, not paying LMI can save buyers anywhere between $4,000 and $35,000, depending on the property price and deposit amount.

Who does the scheme help?

The HGS covers three separate programs, each with a different type of home buyer in mind.

The First Home Guarantee helps eligible first home buyers get into the market with as little as a 5% deposit. From 1 July 2024, an extra 35,000 places became available.

The Regional First Home Buyer Guarantee is dedicated to helping first home buyers who live in regional areas buy a home with just a 5% deposit. An extra 10,000 places have opened up for the 2024-25 financial year.

The Family Home Guarantee supports eligible single parents to buy a home with as little as a 2% deposit. This will help up to 5,000 families this financial year.

Am I eligible for the Home Guarantee Scheme?

You’ll need to tick a few boxes to be eligible for the HGS.

In particular, there are limits around the maximum purchase price for a home under the scheme . The upper limits vary between cities and across regional areas from state to state, and are adjusted each financial year.

One way to find out if you’re eligible is to call us and we can walk you through the various requirements.

Do all banks support the Home Guarantee Scheme?

No. Lenders choose to be part of the HGS, and while there is a reasonably wide choice of banks to pick from, not all lenders have signed up.

The Real Estate Institute of Australia says the “best way to see if you can qualify for the scheme and seek pre-approval is to speak with a mortgage broker”.

To date, mortgage brokers have secured up to 80% of the HGS placements, and we can guide you through the application process, answer any questions you may have about buying a first home, and recommend a home loan option suited to your needs from the lenders that are part of the scheme.

Call us today to find out more about buying with a 5% deposit – and zero lenders mortgage insurance. You could be in your own home a lot sooner than you expected!

Will home prices keep rising over the next year?

Thu, 27 Jun 2024 01:30:00 GMT

Looking to buy anywhere at the moment?

Property prices are expected to keep climbing higher through to mid-2025 – though not everywhere, according to a new report. We reveal where prices are tipped to go up, and where prices are expected to fall.

What a crazy financial year it’s been for property prices.

Despite a cost of living crunch and high interest rates, home values Australia-wide have soared 8.3% over the past 12 months, according to CoreLogic .

Will prices keep heading north? Or can we expect the market to cool at some stage?

These are key questions for home buyers who may be weighing up whether now is the right time to buy.

To get some answers, we turned to Domain’s latest forecast report , which sets out expected property price movements over the next 12 months.

The big picture: prices set to keep rising

According to Domain, several factors are set to push Australian home prices higher over the next year.

On one hand, we’re seeing a tight supply of new homes being built, combined with lower than usual numbers of homes listed for sale .

On the other side of the ledger, strong buyer demand is being fuelled by a growth in migration.

As Domain puts it, the “push-pull between affordability and availability” will be the factor that shapes Australia’s property market between now and June 2025.

Price growth is expected to differ between cities

That’s not to say home prices across Australia will move in the same direction and at the same pace.

Let’s take a quick tour around the nation to see what Domain believes lies in store for home buyers (and apologies to Hobart and Darwin residents – neither city was covered in the released report).

Brisbane

Brisbane’s property market has notched up an impressive 16.3% price growth over the past year. And Domain says there’s more growth to come.

With a forecast for 6-8% price growth, Brisbane’s median house price could hit a record high of up to $998,500 by mid-2025. Apartment values are expected to increase by 4-6%.

Sydney

If Domain’s prediction of 6-8% price growth proves accurate, Sydney’s median house price will hit a new record high of up to $1.76 million by this time next year.

Apartment prices (median) are also expected to reach a new record of up to $855,000 based on forecast price growth of 4-6%.

Melbourne

Melbourne’s housing market is expected to remain a little cooler, with growth between 0-2% expected – leaving median house prices between $1.03 million and $1.05 million. Unit prices are expected to do better, potentially rising by up to 4%.

Regional Victoria is the only market where Domain expects house prices to cool, with falls of 0-3% expected by mid-2025.

Adelaide

Adelaide could be on track to become a million-dollar city if Domain’s forecast of 7-8% price growth pans out. It could see Adelaide’s median house price hit a record high of up to $984,000 by June 2025.

Unit prices are anticipated to grow by up to 6%, helping the city’s median apartment price push through the $500,000 barrier.

Perth

There’s no denying Perth has had a bumper year, with a 22% jump in home prices over the past 12 months. And according to Domain there’s plenty of gas left in the tank.

With price growth of 8-10% possible over the year ahead, Perth could notch up a record-high median house price of between $840,000 and $856,000 by this time next year. In the unit market, prices are expected to jump 4-5%.

Canberra

Canberrans can expect mild house price growth, with values forecast to climb by up to 4%.

Unit prices in the nation’s capital are expected to increase by 1-4%.

What to weigh up

Domain’s forecasts are just that – predictions, not facts.

Along with factors that could push prices higher, the property listing site also cautions that a tighter jobs market and stagnating incomes could put downward pressure on prices.

Long story short: the right time to buy is when you feel ready to get into the market.

We can’t say for sure how property prices will move.

But we can provide clear answers on your borrowing power, help you understand if you’re in a position to land home approval, and help you find a home loan that’s right for your needs.

Rate cuts? Pencil them in for 2025

Wed, 26 Jun 2024 23:08:00 GMT

How are you managing with your mortgage?

Put the party pies on ice and postpone those rate-cut celebrations for a while yet. The much-touted rate cuts we’ve been waiting for may not arrive until 2025.

Here’s why rates could be staying higher for longer, and how to take action yourself.

June saw the Reserve Bank of Australia (RBA) keep the cash rate on ice – yet again.

Rates haven’t budged since November last year, and with the RBA not due to make another rate call until August , interest rates will remain in a holding pattern for at least two more months.

For home owners struggling to manage their home loan at current interest rates, it begs the question: ‘what happened to all the talk about rate cuts in 2024?’

Here’s what’s happening.

One reason why rates aren’t moving

Just a few months ago, some of our biggest banks were predicting interest rates would start to slide sooner rather than later.

The Commonwealth Bank and Westpac , for instance, expected rate cuts as early as September.

That’s now looking increasingly unlikely.

The reason lies with inflation.

The RBA is intent on getting inflation down to 2-3% .

Unfortunately, inflation is not playing along.

It’s currently sitting at 3.6% . So close, but not quite there.

When are rates likely to fall?

The RBA expects it could be “some time yet” before inflation is happily nestled in that 2-3% range – the point at which long-awaited rate cuts may start to kick in.

It’s not much of a date for home owners to work towards, though the big banks have a few time frames of their own.

Westpac and NAB now both see rates heading south from December. And while CommBank recently stated it expected rates to fall in November, there are signs it’s losing hope for a 2024 rate cut.

“Given the challenging underlying inflation backdrop, as well as a labour market that is loosening more gradually than expected, the runway is shortening between now and November,” CBA’s head of Australian economics, Gareth Aird, said.

“The risk to our call is increasingly moving towards a later day for an easing cycle.”

Meanwhile, ANZ doesn’t expect a rate cut before 2025. Ditto Citi economists and a growing number of other experts .

Long story short, even if we do get a December 2024 RBA rate cut, it’s probably fair to say we won’t see those cuts flow through to home loans until early next year.

And a note of caution: the RBA mentioned in its June statement that it is “not ruling anything in or out”.

It’s a grim reminder that a rate cut is not guaranteed before another rate hike.

This is why it’s so important to take action of your own.

How to manage higher rates

Revisiting your household budget, identifying areas where you can cut back, and tucking spare cash into an offset account to save on loan interest are all steps worth considering.

And don’t forget, tax cuts for 13.6 million Australians kick in from 1 July.

That could provide extra cash each pay day to help pay off your home loan.

It’s also a good idea to speak to us for a home loan review. We can let you know if you still have the loan that’s right for your needs, or if you could save by switching – without having to wait for RBA rate cuts. Better still, rising national property values may mean you could be in a great position to refinance.

Talk to us today for more tips on managing your home loan repayments and possibly trimming your loan rate. It may mean the party pies can come out sooner!

Is a tree or sea change on your horizon?

Thu, 13 Jun 2024 00:08:00 GMT

Ever dreamed of leaving the rat race behind?

Fresh air, no bumper-to-bumper traffic and more affordable home prices. There’s plenty of appeal in regional living, including a chance to potentially reduce your home loan.

The classic tune ‘Home among the gum trees’ is fast becoming a lifestyle anthem for a growing number of Aussies.

A surging number of city-slickers are heading to the bush or bay, new Commonwealth Bank research shows.

In fact, metro to regional relocations are now 20% higher than pre-Covid.

It goes to show that regional towns and cities have a lot going for them.

So what’s the appeal?

Along with a laidback lifestyle and the chance to see Skippy on your way to work, rather than countless sets of traffic lights, a key drawcard of regional living is more affordable housing.

Where are people moving?

The Sunshine Coast in South East Queensland is currently the nation’s most popular destination for Australian movers, securing a 16% share of net internal migration over the past 12 months.

Other popular areas outside our nation’s capital cities include the Gold Coast, Wollongong, Newcastle, Lake Macquarie, Moorabool, Geelong, the Alexandrina region, the Fraser Coast and Launceston.

Western Australia is also becoming an increasingly attractive destination with Busselton, Capel, Greater Geraldton, Northam and Albany all making their way onto various hotspot lists this quarter.

Regional home values vs city prices

Across Australia’s capital cities, the median home value is about $864,780, according to CoreLogic .

By comparison, the median value across regional markets is $626,888.

That’s a whopping $237,892 difference.

The price gap can be far bigger depending on where you’re moving from and moving to.

In Sydney, for instance, the median house value is $1,441,957. Head to regional NSW, and you could pay closer to $760,000 for a house – a saving of around $680,000!

Regional living can help cut loan repayments

Buying a more affordable home can have other flow-on benefits, such as a lower stamp duty bill.

It can also have a huge impact on home loan repayments.

For example, let’s use the above figures and pretend you’re deciding between purchasing an $864,780 capital city home and a $626,888 regional area home.

To keep things simple, let’s say you’ve saved up $173,000 for a 20% deposit on the $864,780 home – and you’ve also got extra money set aside to cover any stamp duty expenses or other fees (the exact amount would vary state to state).

Let’s also assume a home loan rate of 6.4%, which the Reserve Bank of Australia says is about the current average principal and interest variable rate, and a 30-year loan term.

On this basis, the initial mortgage for the city home would be about $692,000 and the monthly mortgage repayments on the city home would come to around $4,329 each each month.

For the regional property, your initial mortgage would be about $454,000 (assuming you put the full $173,000 towards the deposit) with monthly repayments in the order of $2,840.

That’s a monthly saving of $1,489 by moving to a regional area – extra money to spend on your home, yourself or your lifestyle.

What about capital growth?

No one can say with certainty how property values will perform in the future.

What we can do however is look at how house prices have performed across regional areas in recent years.

CoreLogic says values in regional areas have jumped 51.1% ($212,000) nationally since March 2020, compared to an average of 31.5% ($207,000) across our state capitals.

So in terms of dollar values, the capital gains across both markets have been fairly similar in recent years.

Ready for your home among the gum trees?

Okay, regional living isn’t for everyone.

Even for committed fans, moving from a capital city to a regional area calls for careful planning and research.

But if you’re hankering for a home with a more manageable mortgage, give us a call today to discuss loan options that could help you get that tree or sea change happening sooner.

Why three-in-four Aussies turn to a broker for home loan help

Thu, 06 Jun 2024 00:42:00 GMT

We’ve got your back

You might have seen a headline or two about a particular big bank being at war with brokers. Nothing could be further from the truth. Our mission is – and always will be – putting you first. That’s why three in every four borrowers now come to us for help.

Borrowers are more spoilt for choice than ever before when it comes to home loans.

But who has time to sort through over 100 lenders in the market to pick out a loan that’s suited to your needs?

Your mortgage broker does.

But for the big end of town, increased competition can mean lower profit margins (and unhappy shareholders!).

That doesn’t mean brokers are at war with any particular bank though, as a few articles stated in the Australian Financial Review over recent weeks (here’s a great non-paywalled response ).

As Mortgage and Finance Association of Australia (MFAA) CEO Anja Pannek succinctly put it : “Positioning banks as competing with brokers is like saying Hilton hotels is competing with travel agents, instead of Hyatt and Sofitel. It completely misrepresents how the mortgage broking industry works”.

What brokers do is streamline the home loan process. It’s just one of the reasons why mortgage brokers are the go-to choice for 74.1% of home buyers (and that figure has been steadily increasing!).

But our role isn’t just about helping you find a competitively-priced home loan with the features you may need.

We go much further.

Here are three other ways you can benefit from the support of a mortgage broker.

We work in your best interest

Behind the friendly face of your mortgage broker is a serious legal obligation.

We are bound by a Best Interests Duty .

It means we are required by law to always put your best interests first, providing home loan options that are based on your unique needs.

That matters because if a loan isn’t the right choice for you, it may not save you money in the long run, no matter how low the rate is.

Banks are not bound by the best interests duty.

Brokers can help guide the way

Buying a home is possibly the biggest purchase you’ll ever make.

It’s also something you’ll probably only do a handful of times over your life. But this is something we help people through every day.

We can act as a trusted guide to help you navigate the complex process of buying a home with confidence.

We can also help you assess your borrowing capacity, so you can buy with confidence, and we can explain where you can consider making shifts in your budget to become home loan-ready sooner.

And because we’re focused on making things more straightforward for you, we take the jargon out of home buying – we can help you get your head around complex issues like lenders’ mortgage insurance, or how to prepare if you’re buying at auction.

It’s all about mentoring our customers at every stage of their property journey.

We’re here for the long term

You and your home loan are likely to be together for a while. And we’ll be right there with you.

Our regular home loan reviews provide reassurance that your loan continues to be the right option for you, even as your life changes and evolves.

And when you’re ready to kick new goals – from renovating, to buying your next home, investing in a rental property, or simply refinancing – we’ll be ready to help guide you through the process.

Like to know more about how we can help? Call us today and discover why three out of every four Australian families come to a broker first.

First home buyers turn to Bank of Nan and Pop

Thu, 30 May 2024 04:49:00 GMT

Established: before Bank of Mum and Dad

Nan and Pop have always been good for birthday money, but one-in-10 grandparents are taking their generosity to the next level: helping their grandkids buy a first home.

Most of us have special memories of pocketing a few treats from Granny and Gramps.

But it turns out those small gestures of affection we knew as kids are morphing into something far more valuable than a few sneaky lollies before dinner or a surprise Lego set.

Research by Compare the Market shows almost three-quarters of Aussie grandparents are giving their families a financial helping hand .

Around 13% are lending money, 9% are chipping in with household bills, and one-in-10 are helping their grandkids buy a first home.

It goes to show that we’re never too old for grandparents’ treats.

But if your Gramps and Granny are keen to help you get started in the property market, it’s important to have some open conversations first.

How grandparents can help

It’s not unusual for first home buyers to need support from family – especially in this day and age – and it can come in a variety of ways.

One option is for a close relative to act as a guarantor for a first home buyer’s loan .

It’s a big ask for grandparents though.

If the borrower can’t keep up the loan repayments, a lender can ask the guarantor to pay off the debt – something that could leave Nan and Pop financially skewered.

If they can afford it, another way for grandparents to help their grandkids buy a home is by gifting money.

What to be aware of

A cash gift doesn’t have to be huge to make a difference.

It can help grow a deposit or go towards upfront buying costs such as lenders’ mortgage insurance.

However, there are traps to be aware of.

You could get a ‘please explain’ from a lender when they see a lump sum of cash land in your bank account.

The bank may want to be sure it’s not a loan that grandma and grandpa expect to be repaid.

So, it can be a good idea for grandparents to write a letter spelling out that they are gifting the money unconditionally with no strings attached.

And while this should go without saying, it would be negligent of us not to stress the importance of nan and/or pop being completely sound of mind when gifting any money.

The last thing you’d want to do is leave them short in funding their retirement, or start a rift (or legal battle) with other family members who love and care for them as much as you.

Talk to us to find out how family can help

Buying a first home is a special milestone, and it’s extra special when family members rally around to lend a hand.

But as we’ve outlined today, it’s not without its potential pitfalls.

So call us today to find out the different ways your family might be able to help you buy a place of your own.

What you should know before buying ‘subject to finance’

Thu, 23 May 2024 07:01:00 GMT

You can’t be too careful

Not sure if you’ll get the thumbs up for a home loan? But you really, really like that house that just popped up? Making an offer ‘subject to finance’ could be the right move. Here’s how it works.

Picture this. You’ve seen a home you’re crazy about, and you don’t want to miss out to another buyer. So, you sign on the dotted line and hand over your deposit.

Things are getting real now. But what if they’re not? What if you struggle to land a home loan?

It’s a scenario every home buyer dreads.

If you have to back out of the contract because you can’t get loan approval, you could lose your deposit.

One possible solution, however, is to make your offer ‘subject to finance’.

Why make an offer subject to finance?

In practical terms, making an offer subject to finance means an extra clause is added to the sale contract.

Essentially, it can allow the buyer to walk away from a sale with their deposit intact if mortgage finance can’t be arranged within a set timeframe.

Understandably, the seller won’t wait around forever. So, the time allowed to secure loan approval can be tight, often a matter of days.

However, a subject to finance clause could help you avoid a last minute race for finance – a pressure-cooker situation that could see you accept a loan or lender that’s not right for your needs.

The downside of buying subject to finance

There is a catch to making an offer subject to finance: the seller doesn’t have to agree to it.

In today’s property market, homes are selling fast – in as little as 10 days in some neighbourhoods .

With that sort of buyer demand, there may not be much incentive for a seller to agree to an offer that’s subject to finance.

Or, if you’re buying at auction, the sale is usually unconditional. Chances are you won’t have an opportunity to alter the sale contract.

These drawbacks highlight the value of speaking to us before you go home hunting.

Having your loan pre-approved, for example, can take away a lot of the uncertainty around securing finance.

Can I buy before I sell?

When you’re ready to climb the property ladder, another key question is often whether it’s better to sell first and buy later.

With money in the bag from the sale of your old home, you may be less concerned about making an offer subject to finance.

That said, if you see a place you want to buy before your home sells, a bridging loan could cover the funding gap.

The beauty of a bridging loan is that this type of finance usually requires interest-only payments, not principal and interest payments.

The downside is that the interest rate tends to be higher than for a traditional home loan.

Talk to us today

There’s a lot to plan for when you’re buying your next home.

Call us to streamline your purchase. From subject to finance offers to bridging loans, upgrading can be a lot less stressful when you know the options.

Not feeling the budget love? 4 ways you could still get ahead

Thu, 23 May 2024 07:01:00 GMT

Rest assured, we’re here to help

If the latest federal government budget is leaving you hungry for perks and savings, you’re not alone. We’ve had a brainstorm and here are four ways you could start working towards your property goals now.

The 2024 federal budget is out, and you might be wondering what’s in it for you.

Sure, an energy rebate of $300 annually can help take the sting out of electricity bills, though at $75 per quarterly bill, it’s not a huge saving.

But you don’t need to rely on the federal budget.

Here are four strategies that could get your wealth growing.

1. Helping hands for first home buyers? There’s plenty available

Disappointed that the federal budget didn’t offer more support for first home buyers?

There is still a wide choice of home buying assistance schemes to pick from.

Take a look at:
– The Home Guarantee Scheme that lets eligible first home buyers, regional Australians, and single parents buy a place of their own with a low deposit (between 5% and 2%) and zero lenders mortgage insurance.
– The First Home Owner Grant , which is usually worth $10,000 but can be up to $30,000 (depending on your state) when you buy or build a new home.

Don’t forget stamp duty concessions (in most states) and the First Home Super Saver Scheme that can let first home buyers use their super to grow a deposit.

Not sure what you’re eligible for?

Talk to us to find out which first home buyer schemes you can tap into.

2. Rate relief for home owners? Make it happen sooner

Why wait for the Reserve Bank of Australia to cut rates?

You may be able to pocket rate savings of your own.

Lots of savvy home owners are jumping ship, with around $16.02 billion worth of home loans refinanced in March 2024.

It goes to show that savings can still be up for grabs for borrowers who switch to a lower rate home loan.

Call us today to find out how your loan shapes up, and discover how much you could save by switching.

3. Property investors: harness your property’s equity

Lending to property investors has jumped 31% in the past year .

It’s being driven by an 11% rise in property values since January 2023 – a jump that’s seen home owners notch up thousands of extra dollars in home equity.

The good news is that this home equity could potentially be used in place of a cash deposit to invest in an investment property.

Talk to us today about unlocking your home equity and becoming a property investor.

4. Tax relief: Stage 3 tax cuts are on the way

The federal budget has confirmed that 13.6 million Australians will pocket tax savings from 1 July.

And there’s a good chance you’re among them.

The Stage 3 tax cuts are expected to deliver an average tax saving of $1,888 a year , or about $36 weekly.

On the face of it, that’s not a game changer when it comes to your weekly budget, but it can help you in more ways than one.

That’s because it can also boost your borrowing power if you’re buying a first home, upgrading to your next home, or planning to invest.

RateCity has crunched the numbers , finding that for a single person on an income of $100,000, the Stage 3 tax cuts could add an extra $21,000 to their borrowing power.

A couple with a combined annual income of $150,000 could see their borrowing capacity jump by almost $30,000.

Call us to know more

If the federal budget has left you hankering for more, it’s time to take matters into your own hands.

Whether you’re a first home buyer, home owner looking to save on your home loan, or property investor looking to grow your wealth, call us today for insights into how you can take the next step in your property journey.

Here’s why your borrowing power might soon get a lift

Thu, 09 May 2024 04:21:00 GMT

Do you know how much you could borrow?

Who doesn’t love a tax cut? Most of us are now only weeks away from saving on our tax bills, with Stage 3 tax cuts to kick in from 1 July. But another key advantage is that the tax cuts could give your borrowing power a nice boost.

The upcoming Stage 3 tax cuts have received plenty of attention – some good, some bad – so we won’t focus on the politics of it today.

But they are still expected to benefit about 13.6 million Australians , and how much tax you might save depends on your income.

A person on the national average wage of around $73,000 will pocket a yearly tax saving of $1,504 , says the federal government.

If your income is, say, $100,000, you could expect to save $2,179 in tax each year.

For households juggling a cost-of-living crunch, the tax cuts can’t come soon enough.

But if you’re in the market for a new home, the tax cuts may offer an unexpected sweetener: a handy boost to your borrowing power.

What is ‘borrowing power’?

Your borrowing power, or borrowing capacity, refers to the amount a lender is willing to lend to you.

It’s based on several factors including the size of your deposit, your household expenses, and your after-tax income (or take-home pay).

The higher your after-tax income, the more you may be able to borrow.

That could mean being able to buy a home sooner, or buying a more expensive property.

How the tax cuts might affect your borrowing power

RateCity has crunched the numbers, finding that for a single person on an income of $100,000, the Stage 3 tax cuts could add an extra $21,000 to their borrowing power.

A couple with a combined annual income of $150,000 could see their borrowing capacity jump by almost $30,000.

It makes the upcoming tax cuts great news if you’re in the market for a first home, or if you’re upgrading to your next place.

Even if you don’t plan to borrow more, the increase to your take-home pay may make your current home loan repayments more manageable.

Other ways to boost your borrowing power

You may not need to wait for the Stage 3 tax cuts.

It is possible to increase your borrowing capacity in other ways, including:

1. Trim spending

Cutting back on non-essential expenses could free up extra cash to grow your deposit.

As household expenses are a factor many lenders look at when determining loan eligibility, trimming back regular costs could add to your borrowing power.

2. Cut back your credit card limit

When you apply for a home loan, lenders will look at the maximum limit on your credit card – not the outstanding balance.

That’s because you could max out the card just after buying a home, leaving less cash to manage mortgage repayments.

Contacting your card issuer to request a lower credit limit – or cancelling it altogether once paid off – could raise your borrowing power.

3. Increase income

Sure, it’s easier said than done.

But if you can take on extra shifts for a few months, convince the boss you deserve a pay rise, or start a side hustle, your bank balance – and borrowing power – could both benefit.

Find out how much you could borrow

Yes, there are online calculators that roughly estimate your borrowing power.

The catch is that these don’t take into account the different criteria applied by each lender. And they don’t know you, your expenses and your goals.

That’s why it’s important to talk to us to get a more accurate picture of your borrowing power.

We can get to know you, your expenses, and the kind of property you have your eyes set on, and then help you come up with a plan to try and make it happen.

Low deposit scheme helps over 150,000 families buy sooner

Thu, 09 May 2024 04:21:00 GMT

How to buy your first home sooner

Whether you’re rat running your local streets, or have a knack for always picking the fast-moving supermarket queue – everyone loves a good time-saving hack. Well, today we’ll let you in on a scheme that could get you into your first home years – yep years – sooner!

When you’re saving for a first home, growing a 20% deposit can be a tough challenge.

It’s certainly not made any easier by national property values soaring higher each month and cost of living challenges.

But there is one potential solution that has seen 156,000 first home buyers, single parents and regional Australians buy or build a home of their own over the past four years – it’s the federal government’s Home Guarantee Scheme (HGS).

How to buy with just a 5% deposit

The HGS helps eligible first home buyers and single parents buy a home sooner by requiring only a small deposit.

The scheme has three different parts.

First home buyers can take advantage of the First Home Guarantee , or the Regional First Home Buyer Guarantee if they live outside a major city, while the Family Home Guarantee is pitched at single parents buying a home.

The common thread is that the scheme lets eligible buyers get started on the property ladder with a smaller deposit – and no need to pay lenders mortgage insurance (LMI).

First home buyers may need as little as a 5% deposit, while solo parents can buy with just a 2% deposit.

The HGS doesn’t provide a cash payment or a deposit for a home loan.

Instead, the Federal Government guarantees the loan, which is the key to buying with a small deposit while avoiding LMI.

A head start on the property ladder

The big plus of the HGS is that it gives buyers a head start in the property market.

According to Domain’s latest First Home Buyer Report , it can take over six years to save a 20% deposit on an entry level home, depending on where you buy.

The catch is that by the time you’ve saved that sort of deposit, home prices may have soared higher, pushing the goal posts further out of reach.

However, the beauty of the HGS is that it lets first home buyers jump into the property market about four years earlier (on average) than they normally would.

Not all lenders are part of the HGS

The HGS does have eligibility requirements, including income thresholds and property price caps that differ by state.

Give us a call, and we can explain whether or not you’re eligible.

The other thing to be aware of is that not all banks have signed up to the HGS.

That’s why it’s so important to speak to us at an early stage.

We can save you plenty of time, by explaining which lenders offer low deposit/no LMI home loans under the HGS, and put forward to you loans and lenders that suit your needs.

Don’t delay, places are limited

The HGS is only available to a limited number of home buyers each financial year.

And not surprisingly, places tend to fill fast.

So if you’d like to find out more about using the scheme in the rapidly approaching new financial year – and whether you might be eligible to buy with just a 5% deposit and zero LMI – get in touch today.

How to know if you’re paying a fair price

Thu, 09 May 2024 04:21:00 GMT

‘She’s a real beauty, ain’t she?’

We all love the idea of nabbing a bargain property, but for most home buyers the real issue is whether they’re overvaluing a place – and paying too much in the process.

Buying a home is an exciting prospect, but it’s perfectly natural to have a big dose of nerves given that you’re likely committing to spending hundreds of thousands of dollars (or millions!).

But with a bit of research, and some other handy tips below, you can help protect yourself when the bidding or negotiations begin.

Why it’s important to pay a fair price

Paying above the odds for a home can have serious financial impacts.

The more you pay, the more you may need to borrow to fund the purchase. That can mean paying higher loan repayments, potentially leaving your budget thinly stretched, especially if interest rates rise again.

Worst case scenario, you could get caught out by a bank valuation that comes in lower than the purchase price – leaving you facing a funding shortfall.

The question is, how do you know if the asking price for a home is in line with the market, or if it’s completely over the top?

Research helps you nail the market

One way to hone in on what a home is worth is to have a pre-purchase valuation.

This involves a professional valuer examining the property and arriving at a value based on factors such as the location and size/condition of the home.

The catch is that a valuation can cost between $200 to $600.

It also takes time to organise, and in a fast-moving market the delay could see you miss out on a property.

A cheaper option is to do plenty of your own research.

Websites like realestate.com.au or domain.com.au can show the median house and apartment values for individual suburbs.

This gives you a good starting point, though as each home is different you’ll need to drill down further.

Factors that can impact market value

Some factors can see broadly similar properties have very different market values. Things to watch for include:
– The lot size a house sits on.
– The number of bedrooms and bathrooms.
– The condition of a home.
– Availability of parking (off-street parking is a plus!)
– Orientation. North-facing homes receive more natural daylight, and so often require less artificial lighting or heating.
– Energy efficiency. PropTrack found three out of five (59%) buyers say eco-features such as solar panels are important to help save on power bills.
– The street. Be wary of streets that become a commuter parking lot on weekdays.
– Views and outlook.
– Zoning and planned developments.

Bearing all these features in mind, check out recently sold properties similar to the one you’re planning to buy.

Pay particular attention to the final sale price – not the asking price. It is the selling price that sets the market.

Don’t be afraid to negotiate

If you have done your homework, you should have a reasonable idea if the asking price of a place is close to the mark or wishful thinking.

Remember, you may also have scope to pay less by negotiating on price. Bear in mind though that the longer negotiations take, the greater the danger of someone else jumping in and snatching the property from under you.

Get in touch with us about pre-approval

Last but not least, give us a call to discuss some of the benefits of home loan pre-approval.

It can help you act quickly when you see a home you’re interested in buying, and it sets a buying limit so you can negotiate with confidence.

Can you remember your home loan interest rate?

Fri, 19 Apr 2024 04:50:00 GMT

Here’s why it pays to remember it

Where you put your car keys, who won the footy premiership three years back, the new prime minister of New Zealand’s name – all very much socially acceptable things to forget. Your home loan rate shouldn’t be on that list.

It’s a fair bet that your home loan repayments are one of your biggest household expenses.

Yet it’s surprising how many borrowers haven’t kept up with what their home loan rate currently is.

In fact, a new report by Mozo shows that 42% of mortgage holders have no idea what interest rate they’re paying on their home loan.

And it’s an oversight that can cost home owners dearly.

How does your loan rate shape up?

It’s not just that large numbers of borrowers can’t pinpoint their loan rate.

Mozo also found one-in-five home owners have never compared rates since taking out their loan.

Your home loan may have had a competitive rate back in the day, but in a rapidly changing mortgage market, that may no longer be the case. And with the cash rate at its highest since late 2011 , there’s little room for complacency.

For a quick check of how your home loan rate stacks up, head to your latest loan statement to find out what it is. It should show the rate you’re paying. Or call us, and we’ll let you know.

By way of comparison, the average home loan interest rate for owner-occupiers is currently 6.4%, and 6.3% for new home loans, according to the Reserve Bank of Australia .

Why it pays to regularly review your home loan

Staying on top of your loan isn’t just about the rate you pay.

Your loan might have been the right choice for you a few years ago. But our lives evolve, and your mortgage may not have the features you need for your current lifestyle and budget.

That’s why it’s worth taking a close look at your loan at least annually, or whenever you experience a major life change such as starting a family.

Understanding how your loan is performing for both rate and features is easy. Speak to us about a home loan review.

As part of our review, we can let you know:
– the rate you are paying;
– if your loan offers the features you want; and
– whether you could save by refinancing.

Is refinancing right for you?

If you’ve been wondering if you could do better on your home loan, give us a call today to discuss your refinancing options.

We’ll help you work out if refinancing is the right step for you and how much you could save by switching to a new loan and/or lender.

Homeowners now an extra $71,000 richer (on average!)

Thu, 11 Apr 2024 00:57:00 GMT

How much equity do you have in your home?

You may not feel richer, but if you’re a homeowner, there’s a decent chance your personal wealth has surged over the past 12 months thanks to soaring property values. And it could open up a world of exciting possibilities.

Sometimes you’ve just got to shake your head in disbelief at the resilience of the property market.

Despite a cost of living crunch and higher interest rates, national home prices have somehow ploughed on over the last year and a bit.

CoreLogic says home values nationally are up $71,832 since January 2023 – a jump of 10.2% in just 14 months – which averages out to an increase of $5,130 per month.

To put that into perspective, last financial year the average full-time Australian worker earned $6,565 per month after tax.

The thing is, higher values can give homeowners much more than a warm inner glow.

Rising property prices can also provide opportunities to boost your wealth further – without having to hammer in a For Sale sign out the front.

Let’s take a closer look.

Your home equity can unlock further wealth

An uptick in your home’s value can drive an increase in home equity – assuming your mortgage hasn’t increased.

Home equity is the difference between the market value of your home and the balance of your home loan.

So if your home is valued at $1,000,000, for example, and you have $500,000 left on your home loan, your home equity is $500,000.

The exciting thing about home equity is that it’s not just a number on a page. It can be a valuable resource that helps you forge ahead financially.

Three ways to make home equity work harder

Plenty of banks let you use home equity as security for additional borrowing or to refinance your current home loan – all without having to sell your home.

Here are three ways you could make your newly enlarged home equity work harder:

1. Refinance to save on interest

Your home loan is probably one of your biggest household expenses.

Refinancing to a new loan or lender can help you save with a more competitive rate, or by taking advantage of loan features that help you pay off the mortgage sooner (such as an offset account).

And the more home equity you have, the easier it can be to refinance.

2. Use your home’s equity to fund an investment property

Your home equity may be used as a deposit on an investment property in lieu of cash savings.

By becoming a landlord, you could benefit from regular rental income, potential tax savings, and an increase in the value of your rental property over time.

Not to mention having a nice little nest egg that could help fund your retirement or – if you’re feeling particularly generous – pass on to your children.

3. Put home equity to work funding renovations

One of the beauties of home ownership is that you can add value to your property – regardless of what the market is doing – with a few well-planned renovations.

But how do you fund those renovations if you’re tight for cash?

Well, one way is to tap into your home equity to fund the renovations.

So how does ‘cashing out equity’ work?

It might sound complicated – but we promise it’s not.

Let’s say you bought an $800,000 house three years ago that, partly due to last year’s property price surge, is now worth $1 million.

And let’s also say you originally took out a $600,000 loan for that house, which you’ve managed to pay down to $500,000 (you little beauty!).

By refinancing that $500,000 loan into a $700,000 loan (70% of your property’s new market value), you can unlock $200,000 in equity to help fund your renovations or as a deposit to buy an investment property.

It’s also worth noting that banks typically let you borrow up to 80% of a property’s market value.

Which means if you upped the ante and refinanced to an $800,000 loan, you might be able to unlock $300,000 in equity. So if you’d like to make your home equity work harder, call us today for a clearer picture on how much equity you have – and how you can tap into it to potentially grow your wealth.

Plot twist: Millennials are Australia’s most active property investors

Thu, 11 Apr 2024 00:57:00 GMT

Have you looked into rentvesting?

When it comes to buying investment properties, younger Australians are punching above their weight, with Millennials taking the title as the nation’s most active generation for property investment.

Investors are continuing to flock to the property market, with the Australian Bureau of Statistics saying the volume of new investor loans in February was 21.5% higher compared to a year ago .

Investment loans now make up over half of the growth in new loans over the past year.

But in an unexpected twist, it isn’t older generations of Aussies who are leading the charge to buy rental properties.

Younger investors flex their muscles

New data from the Commonwealth Bank shows Millennials (those born between 1981 and 1996) accounted for almost half (46%) of the bank’s new property investors in 2023.

And almost one in three of those buyers purchased an investment property on their own, without the help of a partner.

Gen Xers (1965 – 1980) are also snapping up rental properties, accounting for 37% of CommBank’s new investment property loans throughout 2023.

Rentvesting – get into the market sooner

Rentvesting is buying property where you can afford, possibly a smaller property in a lower-cost area, and then renting where you want to live.

The CommBank data shows plenty of investors are taking this approach and it makes sense: the average investment loan size is just over $528,000 compared to $624,000 for owner occupiers .

And remember, if you purchase the right property, as an investor you could expect to earn rental income. That’s extra cash for loan repayments.

In this way, rentvesting could be an opportunity to get started on the property ladder sooner rather than later, without having to make too many lifestyle sacrifices. As the investment property grows in value over time, it can become the stepping stone to buy an owner-occupied home.

The market seems attractive for investors right now

The property market offers plenty of appeal to investors right now.

Rental vacancy rates are at a record low of just 0.7% nationally . Property listings have increased in most cities , giving buyers more choice, and the past 12 months have seen rents skyrocket 11.4% across our state capitals.

Add in growing expectations that interest rates will start to fall later this year, and CoreLogic says it’s likely that property values will continue to rise, giving those who buy today the potential to notch up handy capital gains.

Are you ready to become a property investor?

Talk to us today to find out how much you could borrow, and your likely loan repayments. It could help you become a property investor sooner!

FOMO, FOBO and FOOP – how they can hold you back

Thu, 28 Mar 2024 00:25:00 GMT

Here’s how to strike the right balance

Nobody likes missing out on a good thing. But then again, who likes overpaying? So how do you strike the right balance when both fears can work against one another?

The property market rarely stands still. Interest rate movements, the number of homes listed for sale, and even the time of year can all drive shifts in the market.

And change plus commitment isn’t something we’re all comfortable with.

It can even see us put mental traps in place that mean we panic about missing out on a good buy, or alternatively, we convince ourselves it’s better to sit things out on the sidelines.

Let’s take a look at three mind games that can work against home buyers – and how you could beat them.

Fear of missing out – uh oh, FOMO

FOMO can be a real thing for home buyers, and it’s possibly starting to have an impact on the property market once more.

According to REA Group , today’s buyers are being gripped by a sense of urgency to make their move into the market.

The reason?

Growing expectations of interest rate cuts are sparking concerns that property values may soon skyrocket again.

Already, research firm CoreLogic says market data points to further growth in home prices.

The result is that autumn is shaping up as a particularly busy season as buyers look to race in before values head higher.

So should you sprint into the market too?

Well, before racing in to buy a home, have a chat with us and we can let you know if you’re home loan ready today.

Fear of better options – let go of FOBO

Some buyers never quite get into the market because of nagging doubts that an even better property could come along.

The thing is, no home is perfect. Buyers often find a bit of compromise is what gets them into the market.

To avoid FOBO, jot down the essential features you’re looking for in a home. Then back it up with a list of nice-but-not-necessary features.

If you can find a property that ticks the boxes for all, or most, of the must-haves you can be confident you’re buying a place that will suit the majority of your needs.

Fear of over-paying – forge a path past FOOP!

It’s possible that humans have wrestled with the question “am I paying too much?” for centuries.

No one wants to pay over the odds for their home.

However, this shouldn’t freeze you into taking no action at all.

Two simple steps could help dispel concerns about whether you’re paying too much for a property.

First, do plenty of research and check out comparable home values in the area you plan to buy in. It can help you identify if the asking price for a place is reasonable or over-the-top.

Remember, you can always attempt to negotiate on price – especially if you have home loan pre-approval, which shows sellers you’re a serious buyer.

Second, and perhaps more importantly, remember that property values typically rise over time.

For example, data from SQM Research shows that back in 2009 the average asking price for a house in Sydney was about $755,000. Fast forward to March 2024, and that figure has jumped to more than $1.9 million.

Hence the saying: “time in” the market generally beats “timing” the market.

Because if you plan to hold your home or investment for the long term, chances are you’ll look back at what you paid, and be glad you purchased when you did.

But … to help make sure you don’t purchase a house that’s beyond your means, get in touch with us today and we can help you work out your borrowing power.

In turn, you’ll be able to work out what your home buying budget is, and what your monthly home loan repayments will likely be.

Explainer: how construction loans work

Thu, 21 Mar 2024 00:00:00 GMT

Time to roll up the sleeves?

There’s something very special about moving into a newly built home or putting the finishing touches on a major renovation. Maybe it’s the look and feel of new paint and fresh flooring, or just knowing you’ve kicked a worthwhile goal.

Whatever the motivation, plenty of Aussies are rolling up their sleeves right now, with the value of building approvals jumping 14.7% from December 2023 to January 2024.

Meanwhile, on the renovation front, we’re not just pimping our pads for looks and lifestyle.

Almost half the home renovations carried out in 2023 were designed with a ‘green’ focus to improve energy efficiency, according to Houzz Research.

The upshot is that planning a new build or renovation can be exciting and rewarding.

But long before you kick back and enjoy the fruits of your (or your builder’s) labour, you may need to decide how to pay for it all.

And a construction loan could be the right tool for the job.

How do construction loans work?

Construction loans work a bit differently from regular home loans.

Instead of receiving a lump sum from the lender, which is usually the case with a traditional home loan, a construction loan drip feeds funds in line with various stages of the project.

If you’re building a new home, for instance, a lender will typically make progress payments across five main stages, including:
– laying the slab;
– erecting the frame;
– reaching lock-up:
– fitting out your home; and
– completion of construction.

This arrangement can offer valuable advantages.

For starters, paying out smaller sums during the construction period may provide a level of protection for the borrower against a builder being paid for work that isn’t completed.

In addition, while the project is underway loan interest is only calculated on the funds drawn down, not on the final total value of the loan.

During the construction period, you’ll generally be asked to make interest-only payments. This can be a lot kinder on your household budget than principal plus interest payments, especially if you’re renting while the builders are at work.

What to watch for with construction loans

Building projects don’t last forever (though it can feel that way at times), and neither do construction loans.

When your new home or renovation is complete, your construction loan will typically roll into a regular home loan.

It can all sound very simple – and it usually (with any luck) it is.

However, a key challenge with construction loans is that they’re not offered by every lender.

That’s why it can be important to speak to us at an early stage.

We can help you identify lenders with construction loan options that meet your needs and budget, and guide you through the application process.

Our support can save you time and leave you free to focus on your building project.

So if you’re looking to build or renovate, talk to us today about your funding options and we’ll aim to help you get the ball rolling on your construction project sooner.

Why offset accounts are hitting new highs

Fri, 15 Mar 2024 02:32:00 GMT

Want to pay off your home loan sooner?

Spare cash can be tight right now (cost of living crunch, anyone?). But if you’ve still got some savings plus a home loan, there’s a way you could make your surplus funds work harder.

Ever heard of an offset account? They’re becoming an increasingly popular add-on feature to home loans, with new data showing that homeowners are stashing money in their offset accounts at a record pace.

In fact, balances in offset accounts have increased to 11% of credit limits , the highest share since APRA started collecting data on this particular stat in March 2019.

This essentially means that, on average, people with offset accounts are only paying interest on 89% of their mortgage each month.

So how do home loan offset accounts work?

An offset account is a cash account linked to your home loan.

The bank doesn’t pay you interest on the offset account. Instead, the balance of the account is deducted from (or ‘offset’ against) the balance of your home loan when loan interest is calculated.

For example, say you have $20,000 in an offset account and a home loan worth $615,000, which is about the size of the average new mortgage Australia-wide .

Instead of monthly interest being based on the full $615,000, the lender will only charge interest on $595,000 – that’s the $615,000 loan minus the $20,000 in the offset account.

This means you pay less loan interest each month.

And there’s an added bonus: because your loan repayment amount stays the same, more of each payment goes towards paying down the loan principal, which in turn helps to reduce next month’s interest cost.

And so on and so forth.

In this way, offset accounts are a way for borrowers to swing the mortgage pendulum more in their favour, with savings on interest plus the potential to pay off their home loan sooner.

Why are offsets so popular right now?

Long story short, offsets are increasingly popular right now in no small part due to high interest rates.

And because no interest is paid on the balance of the offset account, there is no tax impact.

That’s quite different from having a separate savings account, where a high income earner can lose a sizeable chunk of their interest earnings to tax.

The icing on the cake is that the home loan interest rates that lenders charge are typically higher than the interest returns they pay on savings accounts.

This means offset accounts can let borrowers make their spare cash work harder by saving more on loan interest than they could earn with a regular savings account.

Last but not least, some lenders allow you to have multiple offset accounts (with debit cards attached!) linked to the one home loan, which can allow you to put all your money to work each month – as opposed to having it in different buckets across a number of low-interest transaction accounts.

What to consider with offset accounts

First and foremost, the money you put into your offset account is potentially money you could be investing elsewhere.

So you’ll have to weigh up whether that money is better served by helping you pay off your home loan sooner, or investing towards your future in other assets.

Secondly, it’s important to be confident you are paying a competitive home loan interest rate.

That’s because offset home loans may come with loan fees and/or higher interest rates than more traditional loans. Not always, but sometimes.

Last but not least, offset accounts don’t tend to work with fixed-rate home loans. But … there are ways you could split your home loan so that it’s part fixed and part variable (with your offset account attached to the variable side).

That’s why talking to us about your home loan needs is important. We can compare across our wide panel of lenders to help line you up with a loan that matches your needs – and discuss whether an offset account might be a suitable option for you.

How long does it really take to get a home loan?

Thu, 07 Mar 2024 22:19:00 GMT

Turnaround times have reached record speeds at some banks

Need a home loan in a hurry? You could be in luck. Plenty of lenders are keen to crunch loan approval times at present – but there’s a lot borrowers can do to potentially speed up the process, too.

Finding a home to buy can take time, and when the right place comes along it can feel as though you need to sign the sale contract fast to stake your claim.

But from there you’re going to need a home loan, and that’s where timing becomes critical.

The good news for home loan applicants is that average turnaround times have reached new record speeds at some of the bigger banks, while processing periods for smaller lenders have also reduced, according to the latest Broker Pulse survey.

But don’t let that lull you into a sense of complacency.

It’s important to have your loan ready to go by settlement – usually six weeks after you’ve signed and exchanged contracts (however this period of time can potentially be negotiated with the seller).

Otherwise, if you don’t have finance sorted by settlement date, the seller may be able to charge interest and penalty fees.

So, there can be a lot riding on getting your home loan approved in a timely fashion.

The general rule for loan approval times How soon your home loan can be arranged often varies between lenders.

Some lenders boldly claim that it can take as little as an hour.

But that’s not usually the case.

To try and play it safe, allow about four to six weeks from the time you submit an application to having the funds available.

But of course, if you require funds sooner than that, then it could be a matter of us helping you line up a lender with quicker turnaround times (and then having us hassle them a bit for good measure).

What’s usually more important, however, is that you focus on the home loan that matches your needs, rather than racing in for a mortgage that can be arranged in record time.

5 ways to help speed up the home loan process Fortunately, borrowers can do plenty to try and speed up the loan process.

Here are five steps you can take to help keep application and approval times tight:

1. Talk to us first We can explain your borrowing power, let you know how big a deposit you may need, and check if your finances are in the shape it takes to get the green light from lenders. We also have access to resources that estimate how long approval times currently are with potential lenders.

2. Get your paperwork together Gather all the documents a lender is likely to ask for, including copies of payslips, birth certificates and other ID, plus bank account statements for the past 3-6 months. If you’re unsure, this is a step we can help you with!

3. Try and hold off on any major changes Big life changes, such as starting a new job or business just before you apply for a loan, can leave lenders asking questions. Try to maintain your budget – your usual spending/saving patterns – and your current job, to avoid a ‘please explain’ from lenders, which could delay loan approval.

4. Double-check you’ve completed the application accurately Any mistakes on your application form can see the paperwork returned to you for corrections, putting the brakes on the whole process. Once again, we can help minimise any potential discrepancies in your application.

5. Ask us about loan pre-approval Waiting until you’ve paid a deposit to apply for a mortgage can be a high-stakes, high-stress strategy. Loan pre-approval is a way to help you speed up the loan application process while also potentially boosting your bargaining power with vendors.

Call us today for more tips on getting your loan across the line – we’d love to help you move into your new home sooner.

Where are the bargain homes located in your suburb?

Thu, 29 Feb 2024 01:45:00 GMT

Here’s how to potentially narrow your search

Location may be a big driver of property prices, but in any given suburb a few streets can be all that separates paying top dollar for a home or potentially scoring a bargain. Here’s how to use a tool to find pockets of value in any given neighbourhood.

Each suburb has its own median house price, and sites like realestate.com.au can provide a useful guide to median values for a particular postcode.

However, the median is obviously only the middle point in each suburb’s dataset – and it’s common for prices to vary widely across a single suburb.

Fortunately, there is an easy online tool that can help you identify more affordable pockets in the suburbs you’re looking to buy in.

New interactive price tool

PropTrack has developed an interactive property price tool that reveals the median values across different parts of each suburb.

The price differences can be surprising.

For example in Beecroft, on Sydney’s leafy north shore, the median house price is about $2.4 million.

But as PropTrack’s price tool shows, in certain parts of Beecroft, the median rises to more than $2.8 million.

Yet, several streets away, that figure is closer to $2.2 million.

There is a reason for the $600,000 difference.

The more affordable parts of the neighbourhood lie adjacent to the M2 Hills Motorway.

It’s a similar story in Melbourne’s popular inner suburb of Fitzroy North .

Known for its character-filled terrace houses, Fitzroy North has a median house value of $1.6 million.

But if you want to live near Edinburgh Gardens – the suburb’s attractive parkland – be prepared to pay closer to $3 million.

In Brisbane’s Fortitude Valley, the trendy James Street Market side of James Street has a median house price of $3 million, whereas across the road towards Brunswick Street there’s a median house price of under $1.9 million.

These price differences are not unusual.

According to a PropTrack analysis , home buyers can typically save around $365,000 by buying in the more affordable areas of a suburb.

In some neighbourhoods though the price gap becomes more of a chasm.

In the Perth suburb of Subiaco, for instance, several pockets of homes have median values topping $2 million.

Head just around the corner to Subiaco Oval and the surrounding homes are priced closer to $840,000.

What to watch with bargain buys

By this stage you’ve probably noticed a trend.

Nearby features can have a real impact – good and bad – on surrounding property values.

Access to the beach, great views or a local park can push property values higher.

On the other hand, homes bordering a 6-lane highway or nearby industrial estate can offer bargain buying – as long as you’re prepared to live with whatever is keeping the price lower.

And then there may be not-so-obvious factors – such as flood zones or upcoming changes to council zoning – so it’s worth doing your research.

After all, there’s a lot you can do to renovate a home, but you can’t change the location.

Seizing opportunities

That said, pricing differences within suburbs can offer opportunities to save.

A single street can be all that separates an expensive home from its more affordable neighbour.

Buying in the cheaper neighbourhood lets you enjoy all the amenities of the more expensive postcode, without the higher price tag.

It’s also worth keeping tabs on any planned local developments that could have the potential to transform today’s ugly duckling pocket into tomorrow’s upmarket enclave.

Thinking of buying? Call us today to understand your borrowing power – it’ll help let you know where you can afford to buy.

Home buyers rejoice! More listings are hitting the market

Fri, 23 Feb 2024 01:30:00 GMT

More choice for house hunters

Great news for home buyers! After an extended run of low listings, the number of homes coming onto the market is skyrocketing. So could this have an impact on the property market? Let’s take a look.

Take a look around your local suburb, and chances are you’ll see freshly minted For Sale signs popping up all over the place.

That’s because a large number of homes are coming onto the market.

Research firm PropTrack says the property market is off to a strong start for the year, with the number of new listings nationally on realestate.com.au up 12% year-on-year in January.

Melbourne and Sydney had their busiest January in over a decade.

Activity was also strong in Hobart, Brisbane and Adelaide, with Canberra experiencing its busiest-ever January for new listings.

Only Perth bucked the trend, recording slightly fewer new listings this year compared to January 2023.

Why the uptick in listings?

The rise in new listings reflects strong demand, very low unemployment and population growth.

Home buyers are also enjoying a more stable interest rate outlook.

February saw rates remain on hold, and PropTrack says financial markets are now expecting a reasonable chance that interest rates may start to fall later in the year.

What does more listings mean for home buyers?

More homes coming onto the market gives buyers the benefit of increased choice, and that’s a real plus if you are looking for your first home or upgrading to your next place.

But the rise in listings may not push home prices down.

That’s because we are still seeing plenty of keen buyers.

As a guide, CoreLogic estimates 115,241 homes were sold over the three months ending January 31 – an 11.9% increase on the same period last year, with high levels of migration being a big driver of demand.

CoreLogic adds that expectations of lower rates later this year could see house price growth accelerate.

How you can prepare

More choice can be a good thing for buyers. However, it can become easy to lose track of what you’re looking for in a property, especially if you’ve attended a large number of inspections.

That’s when it helps to draw up a list of must-have home features (such as aspect, block size or parking requirements) followed by nice-but-not-necessary features (like, say, a swimming pool or a shed) to assess each home you visit.

It also makes sense to be ready to act when you see a property you’d like to buy.

Having home loan pre-approval in place lets you set a buying budget, so you can focus on homes within your price range. It also means you can make an offer with confidence – and stay one step ahead of less-organised buyers.

Talk to us today to get your home loan ducks in a row and take advantage of a wider choice of homes listed for sale.

They’re back! Why property investors account for one-in-three new home loans

Thu, 15 Feb 2024 23:51:00 GMT

Ever thought about becoming a property investor yourself?

Lending to property investors is soaring once again. We lift the lid on what’s driving investor interest – and what it could mean for the property market throughout 2024.

It looks like property investors are back … and in a big way.

The latest ABS figures show that in December 2023, banks lent over $26 billion in new home loans – and one-third of this figure, a whopping $9.5 billion, was to property investors.

That equates to 36.2% of all housing loans – the highest market share for property investors since mid-2017.

It’s also quite an uptick from December 2020, when the ABS says investors took out just 23.6% of mortgages.

So why the big shift in recent times?

What makes an investment property so attractive?

There are many reasons why people may love owning a rental/investment property.

An investment property can be a source of extra income, and right now, some investors are pocketing very attractive rental yields (that’s annual rent divided by the purchase price of the property).

PropTrack, for example, is reporting yields as high as 9% in some suburbs.

Investors may also expect to see their property grow in value over time, which could add up to some pretty impressive capital gains.

CoreLogic looked at the results of 86,000 property resales in the third quarter of 2023, and found 93.5% were sold for a profit, with the median gain coming at $298,000. Not bad at all.

And home values are tipped to jump a further 6% in 2024, according to ANZ Bank .

Add in rental vacancy rates hitting record lows of 1.1% in January 2024 , and many investors are attracting good tenants, which can be great for cash flow.

How could the return of investors impact the market?

On a personal level, buying an investment property could potentially be a boost for your long-term financial well-being.

ABS has acknowledged that rising household wealth in Australia is being supported by house prices that have continued to grow despite higher rates.

More broadly, PropTrack points out that the re-emergence of investor activity “heralds good news for the overall health of the market, helping to drive more new construction”.

Long story short, the benefits of more rental properties could extend beyond individual investors.

Is an investment property on your radar?

If you’re thinking about buying a rental property, or you’d like to add to your current property portfolio, talk to us today about your options for an investment loan.

We can help you work out how much equity you may be able to leverage, as well as your overall borrowing capacity.

From there, we can help you track down a suitable mortgage with a competitive rate from our broad suite of lenders, leaving you free to focus on finding your ideal investment property.

4 tips for self-employed home loan applications

Thu, 08 Feb 2024 03:43:00 GMT

Here’s how to apply like a boss…

Applying for a mortgage when you’re self-employed may have you jumping through more hoops. But it needn’t deter you from getting into the property market. Here are 4 tips to help you apply for a mortgage like a boss.

Being your own boss sure has its advantages: the flexibility of setting your own hours, building your own business to represent your values, having someone else fetch you coffee…

But when it comes to home loans, you may have more to prove than the average applicant.

You see, lenders may view you as a little more risky. That’s because, in their eyes, you may not have a steady paycheck to make those all-important repayments.

But being self-employed needn’t stop you from getting your slice of the great Australian dream.

Planning ahead and knowing what lenders generally look for could give you an edge when it comes to mortgage application success.

1. Get your finances in order

As a self-employed applicant, having rock-solid finances is important.

Even if your business is booming, most lenders will see you as more of a risk for defaulting. That’s because self-employed incomes can be less consistent.

Lenders want to know that the likelihood of you making regular repayments is high.

And to mitigate risk, loan options available to you may have a lower loan-to-value ratio (meaning you may need a higher deposit) and/or have a higher interest rate.

So, to prepare to apply, consider getting your finances in check by:

– Building up a healthy credit score.
– Lowering your living expenses by focusing on the essentials.
– Saving up a healthy deposit (aka genuine savings) and a cash buffer.
– Running your business on accounting software such as Xero, MYOB or Hnry so you can provide up-to-date and accurate profit and loss statements.

2. Gather your documents

It’s important to keep your business and personal finance documents up to date, so you’ll be ready to rock and roll.

For verification of income, many lenders require two years worth of lodged business and personal tax returns.

It’s a great idea to tell your accountant in advance that you’re planning on applying for a home loan. That’s because some of the financial wizardry they apply to lower your tax bill might work against your application and lower your borrowing capacity.

Also, keep in mind that business owners who do lots of “cash jobs” can find it harder to obtain a home loan because they have less income to show for their work.

On top of running your credit score, some lenders may want statements from loans and credit cards for proof you can make regular repayments.

They may also want to see verification of assets such as any property, savings and investments.

Some lenders may want to see the whole kit and kaboodle when applying for a loan. Some may need less.

And some offer low-doc loans if you don’t have extensive documentation. But they may come with higher interest rates or the need to pay lenders mortgage insurance (or both).

Exactly what documents are required depends on the lender and the type of loan.

3. Choose your lender wisely

Not all lenders are comfortable providing self-employed loans for the reasons mentioned above.

And every time you apply for a home loan your credit history is “pinged”. The more this occurs, the more of a red flag this may pose to lenders.

So targeting lenders that have a track record of approving self-employed loans might be a wise move.

Having a reputable mortgage professional on your side may be helpful here. Which brings us to our next point …

4. Get in touch with us today

Just as you’ll want to give your accountant plenty of notice, so too will you want to reach out to a mortgage broker sooner rather than later.

That’s because we can help you work out your borrowing capacity, and provide you with other tips that you can start working on now that may eventually help make your application more attractive to lenders.

So if you’re self-employed and think you’ll be seeking a home loan in 2024, get in touch today.

When will the next RBA cash rate call be made?

Thu, 08 Feb 2024 03:43:00 GMT

When do you think rates might move next?

Happy days! The Reserve Bank kept rates steady in February. But a shake-up in the number of times our central bank meets each year is raising questions about how long the rate pause will last. Here’s what we could expect.

It seems fitting that in a month known for Valentine’s Day, the Reserve Bank of Australia (RBA) has shown borrowers some love by keeping the cash rate steady at 4.35%.

In reality though, the latest rate pause has nothing to do with romance or affection.

It’s more to do with keeping a lid on rising living costs.

After months of steadily rising prices, inflation looks to be heading south – currently sitting at 4.1% , down from 7.8% in December 2022.

That’s exactly what the RBA has been aiming for with their interest rate hikes.

Long story short, home owners can breathe easy – for now at least.

But when will the next cash rate decision be made?

RBA rate calls won’t be as frequent in 2024 Aussies are used to RBA rate decisions being made on a monthly basis, with a break for the holiday season each January.

That’s changing this year.

Instead of 11 meetings, the RBA will meet just eight times to decide interest rate movements, handing down their decision on the second day of:

– February 5-6
– March 18-19
– May 6-7
– June 17-18
– August 5-6
– September 23-24
– November 4-5
– December 9-10

What do less frequent meetings mean for borrowers?

So, whatever rate decision is made in March, home owners need to live with it for almost two months until the RBA meets again in May.

As such, some pundits believe fewer meetings will naturally lead to fewer rate movements. Farewell to back-to-back rate hikes every month, for example.

However, experts also warn it might lead to bigger increases or decreases as the RBA has fewer opportunities to move the needle.

And that’s not to say individual lenders can’t, or won’t, change their home loan rates whenever they like, regardless of RBA rate decisions.

For example, Mozo reports that a number of lenders lifted their variable rates in December 2023 despite the RBA keeping the cash rate steady.

Buy now or wait for rates to fall?

While the February rate pause will be welcomed by borrowers, the RBA has cautioned that further rate hikes “cannot be ruled out”, especially if inflation starts to climb again.

Even so, plenty of lenders including NAB , the Commonwealth Bank and Westpac , expect to see interest rates fall this year.

There are no guarantees – a lot can happen over the next 12 months. But it does raise questions about whether now is a good time to buy a home, or if it makes sense to hold off until rates head lower.

On one hand, a drop in interest rates could boost your borrowing power.

The catch is that lower rates could stimulate home buying activity, potentially driving home prices higher.

If this happens CoreLogic warns we could see new measures introduced to contain housing credit risk such as changes to lenders’ loan-to-value ratios.

So when might be the right time to buy?

We believe the ideal time to buy a home is when you feel ready to do so.

And a good way to find out if you’re ready is to speak to us about your borrowing power.

We can help you crunch the numbers to let you know how much you could borrow, which in turn helps you figure out what kind of property you could afford to buy.

If that sounds like a good plan to you, give us a call today.

First home buyers charge back into the market

Thu, 25 Jan 2024 06:23:00 GMT

Know anyone keen to buy their first home?

Hats off to Australia’s first home buyers! The latest lending data shows they’re refusing to let last year’s rate hikes and rising property values dampen their goal of buying a home. Here are five tips to help you buy your first home in 2024.

You’ve gotta hand it to first home buyers in the current market.

Not only were they faced with 13 cash rate hikes in just 18 months – which can obviously affect borrowing capacity – but property prices still rose 8.1% in 2023, according to CoreLogic .

Still, they won’t be deterred.

The latest lending data from the Australian Bureau of Statistics shows a massive 20.3% jump in the number of loans to first home buyers last year.

But it takes more than grit and determination to buy your first home. A few handy hints can also help.

If you’re hoping to buy your first home, below our top tips can help you become home loan-ready in 2024.

1. Make a visit to your mortgage broker your first step

First home buyers are often unsure about what’s involved in buying a home. That’s fair enough.

We can help you know where you stand in terms of loan approval, the costs you should plan for, and the steps you can take now to help improve your finances.

2. Save, save and save some more

Lenders like to see you have a decent track record of regular saving. It shows you have the discipline to manage home loan repayments.

Take a look at your budget, work out where you can trim back, and consider funnelling as much into savings as possible.

It may mean cutting back on luxuries and treats for a while but it’s not forever. And the more you save now, the less you potentially need to borrow.

3. Consider lowering your credit card limit

When you apply for a home loan, lenders are often more interested in the limit on your credit card than the balance outstanding.

That’s because you could, in theory, max out your card after buying a home, which may affect your ability to manage mortgage repayments.

The average card limit is about $9,500, according to a Finder analysis of RBA data .
Shrinking this down (with a quick call to your card issuer) might get you over the line for the loan you need.

4. Check out first home buyer support schemes

There’s a tonne of potential support for first home buyers – from First Home Owner Grants (FHOG) to possible savings on stamp duty.

We can explain what you might be eligible for, but research of your own can narrow down your choice of property.

Some support payments are only available if you buy or build a new home, and many have property price caps.

5. You may not need a 20% deposit

Sure, a 20% deposit is a target worth aiming for.

But you may be able to buy with less.

The First Home Guarantee and Regional First Home Buyer Guarantee let first home buyers get into the market with just a 5% deposit and no lenders mortgage insurance.

That might mean you’re ready to buy now!

Call us today for a chat about buying your first home, and discover how we can help you find a home loan that matches your needs at a competitive rate.

How your deposit size can shape the rate you pay

Thu, 18 Jan 2024 08:00:00 GMT

Keen to buy a new home in 2024?

It’s commonly known that the bigger your deposit, the smaller your home loan, and thus, the lower your monthly repayments. But today we’ll look into another way your deposit size could reduce your repayments: by potentially reducing your interest rate.

A question we’re commonly asked (believe it or not!) is “how can I get a lower interest rate?”

There’s no straightforward answer to this one as it usually depends on a myriad of factors, including whether lenders see you as high risk or low risk, the competition in the market at the time and, as we’ll discuss today, how big your deposit is – or more technically, your ‘loan to value’ (LVR) ratio.

What’s LVR?

To cut through the jargon, LVR refers to how much of your home’s value you’re borrowing.

If you plan to buy a home priced at, say, $600,000 using a deposit of $120,000, you’ll need to borrow $480,000, or 80% of the property’s value. For lenders, this means you have an LVR of 80%.

Why does this matter?

Well, a bigger deposit lowers your LVR. This in turn helps reduce the risk you represent to a lender.

A loan with an LVR of 80%, for example, may be seen as less risky than one with an LVR of 90%.

As a general rule, lenders tend to reward borrowers for that reduction in risk with a lower home loan interest rate.

But note: these figures don’t include stamp duty and other up-front costs, which you may also need to budget for.

Average interest rates by LVR

Mozo checked out the average variable rates for different LVRs .

As you can see below, for home loans with an LVR of 95%, meaning a 5% deposit, the average variable rate is about 7.38%.

Borrowers who can pull together a slightly bigger deposit may see their rate fall. As a guide, on an LVR of 90% (deposit of 10%), the average variable rate falls to 7.13%.

That’s a potential rate saving of 0.25%. This may not sound like much. But along with lowering your monthly repayments, a lower rate could mean paying less in interest charges over the life of your loan.

– LVR 95%: average variable rate of 7.38% p.a.
– LVR 90%: average variable rate of 7.13% p.a.
– LVR 80%: average variable rate of 6.85% p.a.
– LVR 70%: average variable rate of 6.81% p.a.
– LVR 60%: average variable rate of 6.77% p.a.

How your LVR can see you save in other ways

Your LVR doesn’t just shape the rate you’re likely to pay.

If you have a small deposit, usually less than 20%, you could be asked to pay lenders mortgage insurance (LMI).

This is a type of cover that protects the lender if you can’t keep up your loan repayments.

LMI can be a substantial up-front cost.

There are options for first home buyers with a small deposit to avoid this expense. The First Home Guarantee Scheme , for instance, allows eligible buyers to purchase a first home with just a 5% deposit and no LMI.

What if I’m refinancing my home loan?

If you’re refinancing your mortgage, your LVR will be shaped by home equity.

The same basic rule applies. The more equity you have in your place, the smaller the loan you may need.

This may help lenders see you as a lower risk (all other things being equal), so chances are you may be offered a lower rate.

How we can help

With so many loans and lenders to choose from, home loan interest rates can vary widely.

Yes, your deposit or home equity can play a role in the rate you pay. But a variety of other factors come into play also.

That’s why it’s important to speak to us if you’re buying a first home, your next home, or refinancing.

We can help you find a home loan that’s suited to your needs at a competitive rate in line with your LVR and any other contributing factors.

The pros of having a mortgage broker on your side

Thu, 11 Jan 2024 03:39:00 GMT

How a mortgage broker can help you

What exactly can a mortgage broker do for you? Well, we don’t mean to toot our own horn, but we can make your home loan journey a whole lot easier, letting you focus on the fun part: planning for your new home!

The words “home loan application process” can strike fear in the hearts of many.

Trawling through different loan products is a time drain. The bureaucratic tape can be a headache. And let’s not forget banks scrutinising your finances.

But it doesn’t have to be a drag.

The majority of home loan seekers have now cracked the code: turning to mortgage brokers to help them land a loan.

In fact, between July and September 2023, mortgage brokers wrote 71.5% of all new residential home loans in Australia, according to the MFAA .⁣⁣

That’s the second-highest mortgage broker market share the industry has ever recorded.⁣

Let’s find out why so many Australians have jumped on the broker bandwagon.

1. We do the legwork for you

Let’s face it, life gets busy. You’ve probably got a million things on your plate.

Carving out time to deep dive into home loan products across lenders can be tough. And often overwhelming.

Mortgage brokers can take that tedious task off your hands – we can assess your situation and find home loan options to suit you and your goals.

We’ll even lodge paperwork and apply on your behalf, then chase things up to ensure everything goes as smoothly as possible.

And fret not: all brokers are bound by a best interests duty.

That means we’ll always put your best interests first – not ours nor the bank’s!

2. We could help boost your chances of success

When looking around for a loan, having a knowledgeable professional on your side could be a game-changer.

We can explain the whole home buying and loan process, which is particularly helpful if you’re a first-home buyer or if it’s been a while since you’ve applied for a mortgage.

We know the application process inside and out and can prime you to have your paperwork and finances ready to roll the moment the perfect property comes along.

We have a wide range of lenders within our network – potentially providing you with access to a variety of home loan options across different banks and lenders.

Whether your financial situation is complex or straightforward, we can use our panel of lenders to help you find a suitable loan. We can also let you know which lenders have a history of approving applications similar to yours.

This potentially cuts down on countless hours trawling through lender websites for the right type of home loan. It may also lower your risk of rejection, which can negatively impact your credit score.

3. You’ll get continued support

Once you’ve been approved for a home loan, the party doesn’t stop there.

We can continue to support you by regularly reviewing your rate with your bank on your behalf.

That way you can avoid the “loyalty tax” – where new customers tend to get the lower rates.

You can contact us any time with any questions you may have. And when you’re ready to refinance, unlock equity in your home, or anything else finance-related, we’re here to help.

Get in touch today

Are you ready to make the home loan process a whole lot easier?

Get in touch today to get the ball rolling. We’ll take care of finding your home loan so you can focus on planning for your new home.

5 New Year’s resolutions for your home loan

Thu, 04 Jan 2024 04:48:00 GMT

Here’s to 2024!

Thought of a New Year’s resolution yet? Or perhaps you’ve broken one already? Either way, check out our list of possible mortgage goals for 2024 – try one, or have a go at them all – to save a bundle in the year ahead.

It’s that time of year when Aussies love to set resolutions.

According to Commonwealth Bank research , as we dive into 2024, three out of four Australians will make at least one financial resolution, often involving plans to follow a budget or spend less.

But when it comes to New Year goals, it’s worth shining a spotlight on your mortgage.

After all, it’s likely to be your largest debt, and setting (and achieving) a few goals for the year ahead can help you pocket savings and become mortgage-free sooner.

Here are our top 5 home loan resolutions for 2024.

1. Give your home loan a health check

Don’t just assume you still have the home loan that’s right for you.

Chances are, life has dished up a few changes over the past few years.

Or maybe there are big things on the horizon for 2024 – like starting a family, upgrading to your next home, or tackling a major renovation.

Checking that your mortgage is still well-suited to your needs can be a starting point to achieve these goals.

Talk to us about a free home loan health check to be confident you’re heading into 2024 with a loan that still ticks all the boxes for your situation.

2. Ditch lender loyalty

Interest rates soared in 2023. Yet less than one in 10 home owners refinanced their home loan to get a better deal last year, according to Canstar research .

At the start of 2024 we’re still seeing big variations in rates between banks, with many lenders still offering lower rates to new customers, according to Reserve Bank of Australia (RBA) statistics .

So, staying loyal to a lender can cost you.

We can compare your mortgage to many others in the market to see how it shapes up in terms of rate, features and flexibility.

That’ll help you decide whether to stay, or save by switching to a new loan and/or lender.

3. Check you’re not paying for features you don’t use

Home loan features can be very handy, but the more features a loan has, the higher the rate (or fees) may be.

That’s not a problem if you regularly use features such as, say, an offset account to save money.

However, if you’re not using particular loan features, you could save with a more basic loan that potentially comes with a lower rate.

Not sure which features your loan offers? Call us today for a quick rundown and we’ll help you check it all out.

4, Plan now for the end of a fixed rate

The fixed-rate cliff is not over yet.

The RBA says 450,000 home owners will roll off a super-low fixed rate in 2024.

If that includes you, it could pay to act now.

We can help you plan ahead and decide the right course of action – be it reverting, refixing or refinancing – so that your finances won’t be too squeezed when the end of your fixed rate rolls around.

5. Leverage your home loan to achieve other property goals

A home loan doesn’t just have to be a debt.

It can also be a valuable tool that lets you work through a personal bucket list by putting home equity to work.

And you could be starting out 2024 with a lot more equity than you realise.

Back in January 2023, the median home value across Australia’s state capitals was $770,374, according to CoreLogic .

Fast forward to January 2024, and the median value has increased to $832,193 .

That might mean extra money (aka equity) up your sleeve to build wealth through an investment property, for example.

Call us today to get a clearer picture of your home’s potential equity – and how you could use it to tick off your wish list in the year ahead.

Ho ho ho! The smart move that has 1 in 10 borrowers feeling jolly

Thu, 14 Dec 2023 05:16:00 GMT

Want to feel merrier these Xmas holidays?

Home owners have been battling rising interest rates for over a year and a half now. But a new report reveals the important step some savvy borrowers are taking to rein in higher rates and swap “oh no!” for “ho, ho, ho!”.

It’s no secret that refinancing has the potential to slice a big chunk off your monthly loan repayments.

And according to Canstar , 1 in 10 mortgage holders chased a better deal in 2023 and switched to a new lender to save on their repayments.

But what’s surprising to us is that 9 in 10 didn’t.

So what’s holding them back? Let’s dive in.

Some score a discount, others don’t

To be fair, many home owners have been on the front foot this year.

According to Canstar, 1 in 5 home owners with a mortgage have negotiated a better rate with their current lender – which is great news.

Having a chat with your bank can be a fuss-free way to save, especially if they come to the party with a rate discount.

A further 14% of home owners say they have tried to switch to another lender but weren’t able to do so because they didn’t have enough equity, or didn’t meet the new lender’s requirements.

That’s why it pays to speak with us before talking to a lender.

We have in-depth knowledge of different banks’ lending criteria, so we know which lenders are likely to give you the green light for a better deal.

Too many borrowers wearing higher rates

The thing is, there are plenty of home owners who have just copped rising rates without taking action.

As Canstar puts it: “Too many borrowers remain complacent even in the face of rising repayment costs”.

The scary thing is, half (49%) of Australia’s home owners with a mortgage don’t intend to change lenders at all.

Some believe they have a good interest rate. But as many as 1 in 5 think refinancing is too hard.

Busting the myths

Let’s sort some facts from fiction.

First up, it’s great if you think you are paying a competitive interest rate. The key is to know for sure.

Right now, variable home loan rates are anywhere from 5.69% (very rare) through to 9%-plus.

With that sort of range, there’s plenty of scope to save, especially as lenders often make lower rates available to new customers.

There is an easy way to know if you’ve got a good rate: pick up the phone and call us.

And if you’re worried that refinancing is hard work, rest assured that we’ll do the bulk of the leg work for you.

We’ll sort through hundreds of home loan options to find the loan that’s right for your needs. We’ll also make the paperwork easy, liaise with your old lender, and your new bank. Simple.

So if you’re keen to find out if you can do better with your home loan these summer holidays, give us a call and we’ll help you put your best foot forward going into 2024.

What’s tipped for house prices in 2024?

Thu, 07 Dec 2023 21:52:00 GMT

Been keeping your eye on the market?

If buying a home is at the top of your wish list for 2024, don’t miss our rundown on how the property market has fared in 2023 – and why the new year is shaping up as potentially another big year for real estate.

As we turn the page on 2023, let’s take a quick rear mirror look on how home values moved over the past 12 months.

In a year that saw five official rate hikes, and a cost of living squeeze thanks to high inflation , home prices still jumped by 7% nationally .

Several cities eclipsed those gains, with double-digit price growth in Sydney (up 10.2%), Brisbane (10.7%) and Perth (13.5%).

But it wasn’t just price growth that took everyone by surprise.

The speed of home sales was also astonishing, with plenty of suburbs in Perth, Sydney, Brisbane and Melbourne selling houses in as little as eight to 25 days on average.

Will property values keep rising in 2024?

Well, higher interest rates are starting to take a little heat out of the market.

According to CoreLogic , home values across Australia rose 0.6% in November – the smallest monthly gain since early 2023.

But here’s the rub.

The factors that pushed prices higher in 2023 are still in place, and plenty of experts are tipping house prices will keep rising in the new year.

Three factors that could drive prices higher

Three main drivers look set to support house price growth in 2024, including:

1. Strong population growth: Population growth is rebounding strongly, driven by high immigration levels. More people generally means more demand for housing.

If you’re not convinced, a recent Domain report says “unprecedented” population growth will exert “extraordinary upward price pressure” on the property market.

2. A housing undersupply: On the supply side, we’re just not building enough new homes.

Australia’s housing shortage made headlines through 2023, and it doesn’t look like it’ll get better any time soon. Building approvals for new homes are reported to be well below average levels .

3. A rental market that’s as tight as a drum: Anyone looking for a rental can face an uphill battle. Vacancy rates are at record lows, making rental conditions tough .

This could encourage more people to buy a place of their own through one of the government’s low deposit buying schemes.

The First Home Guarantee scheme for instance, lets first home buyers get into the market with just a 5% deposit and zero lenders mortgage insurance.

Price growth is expected to be (slightly) lower next year

Most experts are tipping house prices will keep rising in 2024 though maybe not at the breakneck speed seen nationally in 2023.

That said, price growth won’t be anything to sneeze at.

Domain is forecasting house prices to jump 5-7% nationally, and in each capital city by:
– 7-9% in Sydney
– 2-4% in Melbourne
– 7-8% in Brisbane
– 6-7% in Perth
– 7-8% in Adelaide
– 3-5% in Canberra
– 2-4% in Hobart

The bottom line is that we could be facing another bumper year of price growth in 2024, and if buying is on your radar, it may be worth trying to buy sooner rather than later to potentially avoid paying more.

So call us today to get the ball rolling on a home loan that helps you achieve your new year property goals sooner.

How to manage your home loan over Christmas

Thu, 30 Nov 2023 03:00:00 GMT

Got much planned for Christmas?

It may be called the silly season but a few smart strategies could help you enjoy the festive season this year without missing a beat on your home loan. Check out our tips to share the Christmas cheer this year without breaking the bank.

Store shelves are starting to be lined with tinsel, ‘Santa stop here’ signs are popping up around the neighbourhood, and chances are you’re beginning to hum a few bars of Jingle Bells.

Yes, Christmas is just around the corner, and now’s the time to plan for what can be a pricey time of year.

After 13 rate hikes in close succession, plenty of homeowners are feeling the squeeze of higher home loan repayments.

The good news is that you (hopefully) won’t have to cancel Christmas this year. Below are three clever hacks that could help you manage your mortgage over the festive season.

1. Follow Santa’s lead – make a list (or two)

Plan ahead by listing all the fixed expenses you’ll face in December such as utilities, your home loan, car loan, and credit card repayments, as well as less frequent bills such as council rates that may fall due before Christmas.

Add up the total to know how much you need to set aside. It’s a good idea to try and prioritise these bills over seasonal spending.

Next, draft up a Christmas spending budget that allocates money to gifts, food, drinks and decorations.

Finetune your budget based on your ability to pay, bearing in mind the upcoming costs you identified in the bill list.

If things are looking tight this year, consider opting for Secret Santa instead of everyone buying everyone a present.

It can help make the giving experience more personal and is definitely gentler on the hip pocket.

Websites like elfster.com can help keep it anonymous and straightforward for everyone.

2. Plan for how you’ll pay

It can be tempting to pay for Christmas purchases with a credit card or buy now, pay later. But these options can just mean kicking the can down the road until January when payments fall due.

It’s also worth noting that late payments on either option could affect your credit score for any future home loan applications.

So where possible, consider reaching for your debit card for festive purchases. It’s hard to get into too much trouble when you pay using your own money.

3. Ask your lender for a gift

Christmas is the season of giving, so why don’t we hit up your lender for the gift of a lower interest rate?

Reserve Bank data shows there is still a gap between the rates on new versus established loans.

If you took out your loan through us, get in touch and we can either reach out to your lender on your behalf for a discount or, if they don’t come to the party, help you explore your refinancing options with another lender.

Don’t let Christmas spending ruin your home loan plans for 2024

It’s easy to get swept up in seasonal good cheer. But it can sometimes be important not to get too carried away with Christmas spending.

If you plan to refinance your home loan or purchase a house in 2024, a lender will likely look at your spending patterns over the past few months.

Hamming up your purchases in December can bump up your average living costs, and if you go way over the top, potentially see you knocked back for a new loan in the new year.

Want more tips to manage your mortgage over the holiday season? Call us today for more festive saving strategies.

More lenders sign up to low deposit first home buyer scheme

Thu, 30 Nov 2023 03:00:00 GMT

Keen to buy your first home?

First home buyers with a small deposit now have an even wider range of lenders to choose from. We reveal the latest banks to join the 5% deposit scheme that’s helping more buyers get into the market sooner.

First home buyers have just received an early Christmas gift, of sorts, with an uptick in the number of lenders that have signed up to the Home Guarantee Scheme (HGS) .

Three Westpac brands, St.George, Bank of Melbourne and BankSA , have added their names to the list of lenders available to first home buyers under the HGS.

If you’re not familiar with the HGS, it gives first home buyers an opportunity to buy a place of their own with as little as a 5% deposit (and no lenders mortgage insurance) through the First Home Guarantee or Regional First Home Buyer Guarantee .

First home buyers aren’t the only ones to benefit. The HGS also includes the Family Home Guarantee , which allows solo parents to buy a home with just a 2% deposit.

More competition is good news for home loan rates

According to Housing Australia, which runs the HGS, first home buyers can now choose from 33 lenders participating in the scheme.

This includes most of the big banks (ANZ has not signed up) plus a generous variety of small banks, credit unions and non-bank lenders.

The extra sweetener is that more lenders can boost competition, which potentially encourages banks to keep their interest rates low for first home buyers.

Buying with a 5% deposit helps get you into the market sooner

Saving a deposit is often the key barrier for first home buyers. And when home prices and cost of living are rising, it can seem like the goal posts are constantly moving out of reach.

The beauty of the HGS is that it lets first home buyers jump into the property market about four years earlier (on average) than they normally would.

So, it’s no surprise that last financial year one-in-three first home buyers purchased with the help of the HGS.

Better yet, new data from Housing Australia shows that first buyers who have tapped into the scheme are now sitting on $82,000 in home equity, on average.

It’s a great result, especially when you consider that the average first home deposit across the scheme was just $35,200 in 2020, rising to $36,400 in mid-2023.

Compare that to the average deposit of $159,000 across the broader first-home buyer market, and it’s easy to see how the 5% deposit scheme gives first-home buyers a valuable leg-up into the market sooner.

How to choose the right loan for you?

With more than 40 lenders offering 5% deposit home loans under the HGS, the challenge can be choosing the loan and lender that’s right for your needs (or finding one that will take you on if your application is a bit touch and go, or if you’ve just started your own business in recent years).

The simple solution is to give us a call.

We can explain whether you’re eligible for the low-deposit scheme, and answer any questions you may have.

We’ll also take the time to understand your needs, so you can be confident that the lenders and loan products we put forward to you are a good fit.

The big stretch: should you extend your loan term?

Thu, 16 Nov 2023 04:33:00 GMT

How are you coping with the rate hikes?

If the November rate hike will seriously stretch your finances, one potential solution may be to extend your loan term. It can ease the hip pocket pain by lowering monthly repayments. But taking more time to pay off your mortgage can come with hidden downsides. Here’s what to weigh up.

Will the RBA’s latest 0.25% cash rate rise squeeze you financially? (not to mention the other 12 rate hikes!)

The majority of lenders lost no time increasing their variable home loan rates following the Reserve Bank of Australia’s 0.25% Melbourne Cup Day rate rise.

According to Mozo , the 13th rate hike since May 2022 has pushed up the average variable rate to 6.62%.

What does that mean in dollars and cents?

On a $500,000 variable rate home loan payable over 25 years, the latest 0.25% rate hike can see monthly repayments jump by $78.

For homeowners who didn’t have much fat left to cut from their budget, those extra dollars can be hard to find.

One potential strategy that may help to lower repayments is to stretch out your loan term.

How extending your term can reduce repayments

If you have a 25-year loan, your lender may give you the option to extend for up to five more years, possibly pushing out the term to 30 years.

If you get the green light, this kind of reset can significantly lower your monthly repayments.

On the $500,000 mortgage we looked at earlier, moving from a 25-year loan to a 30-year loan could cut monthly repayments by around $214 – even after allowing for the November rate hike.

The hidden cost of a longer term

There’s a lot to love about the prospect of slashing a couple of hundred bucks off your loan repayments each month, especially as we head into the festive season. But pushing out your loan term can come with a hidden cost.

Taking longer to pay down your loan means you’re also paying interest for longer. And while your repayments can decrease, the long-term interest cost can skyrocket.

Stretching a $500,000 loan from 25 to 30 years could mean paying a whopping $128,000 more in total interest.

It’s worth keeping in mind though that those extra interest repayments aren’t a given.

You may be able to close the gap and cut down the interest cost by either making extra repayments in the future, loading up an offset account, or paying off the loan early (if, for example, you receive a lump sum inheritance).

So the upshot is that stretching your loan term can be a short-term fix now, but you’ll have to weigh up the costs against the benefits, not to mention whether you think you’ll be in a better financial position later down the track to pay down the loan quicker (and thus reduce the interest payments).

Other ways we can help

Along with exploring extending the length of your loan, we could also help you look into other solutions to ease the pain of higher rates.

Options that may be available with your lender include:

– temporarily lowering your loan repayments;
– deferring repayments for a while; or
– shifting you to interest-only payments for a set period.

The common thread is that the earlier you reach out for assistance, the sooner we may be able to help you get some financial relief.

RBA increases the cash rate by 25 basis points, up to 4.35%

Thu, 09 Nov 2023 03:47:00 GMT

Will this rein in inflation?

The Reserve Bank of Australia (RBA) has increased the official cash rate by 25 basis points, taking it to 4.35%. So just how much will this year’s Melbourne Cup day rate hike increase your monthly repayments?

Some more tough news for mortgage holders around the country today.

Despite the official cash rate being on hold since June (and many hoping it would stay that way), the RBA has decided to press ahead with a second consecutive Melbourne Cup day rate rise in an attempt to rein in inflation.

This means we’ve now had 13 hikes rise in 18 months since 1 May 2022, and it takes the official cash rate to its highest level since November 2011. It also happens to be the first rate hike under new RBA Governor Michele Bullock, who commenced in the role in September.

So why did the RBA raise the cash rate?

Governor Bullock said while inflation in Australia had passed its peak, it was still too high and was proving more persistent than expected a few months ago.

“While goods price inflation has eased further, the prices of many services are continuing to rise briskly,” she said.

“While the central forecast is for CPI inflation to continue to decline, progress looks to be slower than earlier expected.”

Governor Bullock added the RBA Board judged an increase in interest rates was warranted today to be more assured that inflation would return to target in a reasonable timeframe.

“If high inflation were to become entrenched in people’s expectations, it would be much more costly to reduce later, involving even higher interest rates and a larger rise in unemployment,” she said.

How much could this latest hike increase your mortgage repayments?

If you’re on a variable-rate home loan, the banks will likely be increasing the interest rate on it very shortly.

For an owner-occupier with a 25-year loan of $500,000 paying principal and interest, this month’s 25 basis point increase means your monthly repayments could go up by about $76 a month.

That’s an extra $1,211 a month on your mortgage compared to 1 May 2022.

If you have a $750,000 loan, repayments will likely increase by about $114 a month, up $1,816 from 1 May 2022.

Meanwhile, a $1 million loan will increase by about $152 a month, up about $2,422 from 1 May 2022.

Need help reining in your mortgage? Get in touch

Are you feeling the pinch? You’re not alone. Many households around the country are feeling the effects of 14 rate hikes in 18 months.

There are also lots of people on fixed-rate home loans wondering what options will be available to them once their fixed-rate period ends.

Some options we can help you explore include refinancing (which could mean increasing the length of your loan and decreasing monthly repayments), debt consolidation, or building up a cash buffer in an offset account.

So if you’re worried about how you might meet your repayments going forward, give us a call today. The earlier we sit down with you and help you make a plan, the better we can help you manage your mortgage moving forward.

Brokers help settle a record 7-in-10 new mortgages

Thu, 09 Nov 2023 03:46:00 GMT

Here’s how we can help

Mortgage brokers have notched up a new personal best, with seven out of every 10 new mortgages settled thanks to their help! It’s a sure sign that mortgage brokers are delivering the goods when it comes to helping Australians move into their dream homes.

In the nine months to 31 March 2023 (while interest rates were rising), mortgage brokers helped settle more than 70% of all new residential home loans, according to the latest data from the MFAA .

It’s the first time ever that brokers have helped settle more than 70% of home loans over a three-month-plus period.

For context, just two years earlier brokers were helping settle between 50-60% of new home loans.

So why are more Aussie home buyers turning to mortgage brokers?

For starters, it looks like word is getting out about how much help we can provide when it comes to giving you an informed choice with your home loan.

And in this environment of higher interest rates, it’s important to be sure your home loan offers value.

With a wide network of lenders – including big banks, small banks and non-banks – brokers are well-placed to help you choose the loan that’s right for you.

It doesn’t end there, though. Here are five more reasons why Australians are turning to brokers for help.

1. Brokers do the legwork

There are hundreds of home loans to choose from. But who’s got the time to find a loan that suits your needs? Your broker does.

Better still, your broker does a lot of the legwork, sorting the paperwork and supporting your loan application right through to settlement. That lets you sit back, relax, and focus on moving into your new home.

2. We’re flexible

You’re busy, right? That’s why brokers offer flexible appointment times.

Want to chat after hours? No problemo.

Prefer to chat online rather than face-to-face? Can do.

It may seem like a minor benefit, but the flexibility brokers offer is a big deal when you’re flat out with work, family, or just busy house hunting.

3. Brokers provide tailored facts

Brokers provide clear details to help you make informed decisions.

From your borrowing power, to how much of a deposit you really need, and what your loan repayments will be under various scenarios, we’ll crunch the numbers based on your unique situation.

It takes the guesswork out of buying a home and lets you plan ahead.

4. No additional costs and a best interests duty

It often comes as a surprise that a broker’s home loan help comes at no cost to their clients. That’s because brokers are paid a commission by lenders.

Rest assured though that unlike the banks, we’re (happily) bound by a best interests duty that means we’ll always put your best interests first.

So while banks and digital lenders might try to tempt you with cashback offers for loan products that may not really be in your best interests (due to fees, high interest rates, and other undesirable loan terms), we’ll only ever try to match you up with lenders and loans that are in your best interests.

5. Brokers keep working for you over the long term

Chances are you’ll have your home loan for quite a few years.

We’ll be with you along the way to help make sure your home loan continues to be the right option for you, no matter how your life changes.

So call us today to see why more Australians than ever are partnering with a broker.

Revealed: the four cities tipped to be future property hotspots

Thu, 26 Oct 2023 05:08:00 GMT

The stats are pretty eye-opening

No matter whether you’re in the market for a home or an investment property, it makes financial sense to buy in an area where values are tipped to rise. But where to look? Today we’ll unveil the Australian cities where population growth is tipped to turbo-charge the property market.

One of the biggest drivers of property price rises right now is … drumroll … population growth, according to PropTrack .

Let’s take a look at the cities more people are expected to call home.

Is the regional renaissance over?

During the height of the COVID-19 pandemic, Australians were flocking to regional areas.

The population of regional Australia grew by 70,900 people during 2020-21 – the first time in over 40 years that the regions outpaced capital cities.

However, the COVID-inspired rush to the regions is reportedly over.

Despite the new work-from-home trend, the reopening of borders is seeing a return to urban living.

According to property exchange platform PEXA , this will see two-thirds of Australia’s population growth concentrated in four cities over the next two decades.

Which cities are set to benefit?

PEXA is predicting population growth of 7.4 million between now and 2041.

That’s a lot of people looking for a place to live.

It’s not just about net migration to Australia, either.

Regional dwellers, especially younger people, are expected to head to urban areas, attracted by the availability of study and work opportunities.

The upshot is that two million new homes will be required over the next 18 years, and 67% of population growth will be concentrated in Sydney, Melbourne, Brisbane and Perth.

The stats are astonishing.

PEXA says the four hotspot cities require vast numbers of new homes:

– 723,000 in Melbourne (that’s 40,000 new homes per year, or 772 per week);
– 582,000 in Sydney;
– 381,000 in Brisbane; and
– 334,000 in Perth.

Adelaide meanwhile is predicted to need at least another 141,000 dwellings between now and 2046.

What does this mean for property buyers?

For starters, increased demand on this scale is expected to continue to push up property prices unless supply can increase at a similar pace.

Despite higher interest rates, already we have seen values rise in all of these four cities over the past 12 months.

CoreLogic says property prices have soared 7.3% in Sydney over the past year, 5.0% in Brisbane, a whopping 8.8% in Perth, and a comparatively modest 1.5% in Melbourne (and 5.0% in Adelaide).

So if you own property in these cities, you could be sitting on more equity than you realise – with potentially more to come.

Or, if you’re considering buying, particularly as an investor, it could be worth looking at one of these hotspot cities – even if you don’t live there yourself.

Are you home loan ready?

No matter where you plan to buy, understanding your borrowing power is a key starting point.

Give us a call today to find out how much you can borrow and what grants and schemes you might be eligible for to help fund your next purchase.

How much can you really save by refinancing?

Wed, 18 Oct 2023 23:06:00 GMT

Let’s discuss refinancing 101

Not sure what refinancing is all about? You’re not alone. Our quick explainer lets you master the basics and helps you work out how much you could save.

Home loan refinancing is a hot topic right now.

Ever since interest rates hit an upward trajectory in May 2022, skyrocketing numbers of homeowners – as many as 28,000 each month – have turned their attention to refinancing.

However, plenty of Australians could be missing out on the savings of refinancing simply because they’re unsure of what’s involved.

Research by Finder shows one-in-five people are in the dark about refinancing, while 63% admit to being only “slightly confident” in their knowledge of refinancing.

So, let’s take a quick look at what refinancing is, and how it can reduce stress by potentially putting cash back in your pocket.

What does refinancing mean?

Refinancing simply means replacing your old mortgage with a new loan and lender.

The process is similar to the one you followed to apply for your current loan.

You decide the loan you’d like to switch to, make a formal application, and provide evidence of income, expenses, and your personal ID.

If the loan is approved, you can sit back and relax as the new lender arranges to pay out your old loan. When that’s taken care of, you just start making repayments to the new bank.

Refinancing can be a surprisingly simple process. Better still, it can all happen very quickly, usually taking about four weeks from start to finish.

Refinancing can be a stress buster

Refinancing can be an opportunity to access home equity, enjoy better loan features, or consolidate several personal debts.

But the number one reason for refinancing is to save money by paying a lower loan interest rate. Those savings can help take the financial pressure off homeowners.

According to Finder, 60% of refinancers admitted to being stressed about their home loan before deciding to switch.

If that sounds like you, making the move to a new loan could be a valuable stress buster.

How much could you save by refinancing?

Potentially, a lot!

That’s because lenders are still saving their best deals for new customers.

The average rate on established loans is currently 6.20%. But if you’re a new customer, you’re more likely to pay an average rate of 5.99%.

That’s an instant saving of 0.21% interest. Think of it as reversing almost one official rate hike.

So what does that rate difference mean for your hip pocket?

Right now, the average loan being refinanced is worth $526,093. On that balance, a 0.21% rate saving could slash more than $70 off each monthly repayment, which equates to $840 in the first year alone, assuming a 30-year loan term.

Is refinancing right for you?

If you’re starting to feel the interest rate squeeze, give us a call today to discuss your refinancing options.

We’ll help you work out if refinancing is the right step for you and how much you could save by switching to a new loan and lender.

One-in-three first home buyers use guarantee schemes

Wed, 18 Oct 2023 22:30:00 GMT

Have you saved enough for a 5% deposit?

Know anyone who wants to buy their first home? A new report confirms that low deposit schemes are getting younger buyers into a place of their own sooner.

First home buyers are ignoring headlines warning that it can take years to save a deposit.

Instead, they’re flocking to guarantee schemes that allow them to get into the market with just a 5% deposit – and without the cost of lenders’ mortgage insurance (LMI).

NHFIC, which runs the First Home Guarantee schemes set up by the federal government, says that in 2022/23, close to one-in-three first home buyers tapped into the guarantee schemes.

That’s up from one in seven the year before.

In total, 41,700 home buyers got into the market with the help of guarantee schemes last financial year, following an uptick in the number of places available.

Younger Australians are buying a home

What’s especially exciting about NFHIC’s research is that it shows the schemes are allowing younger buyers to crack the property market.

In 2022/23, more than half of all places in the First Home Guarantee and Regional First Home Buyer Guarantee were taken up by people under the age of 30.

There has also been a fivefold increase in the number of buyers aged 18-24.

Key workers are buying with just a 5% deposit

The low deposit schemes are also helping a growing number of key workers such as teachers, nurses and social workers purchase a home.

Around 7,721 guarantees were issued to key workers last financial year. Great news for these essential workers in our community!

Debunking the low deposit myth

The First Home Guarantee has at times attracted criticism. This has largely been around the risks of buying with just a 5% deposit, which can mean taking on a larger loan with higher repayments.

But NFHIC data suggests this hasn’t been a problem.

Fewer than 0.1% of homeowners using the schemes have fallen behind on their loan repayments, which is less than the market average for all buyers with a low deposit loan.

Better still, close to 10,000 scheme borrowers (over 12% of total guarantees issued to date) have already transitioned out of the scheme, with most of these buyers having accumulated enough equity to achieve a loan-to-value ratio (LVR) of less than 80%.

Could you be eligible for a 5% deposit scheme?

If you’re a first home buyer struggling to save a 20% deposit, it’s good to know there is a pathway to home ownership that can get you into a place of your own sooner.

And it can also help you to avoid paying LMI – which can cost you anywhere between $4,000 and $35,000, depending on the property price and your deposit amount.

Conditions apply for the 5% deposit schemes, but new rules mean you can buy with a sibling or mate and still be eligible for this valuable financial helping hand. With property values rising in many markets across Australia, time is of the essence.

Call us today to see if you can buy a home with a 5% deposit and zero LMI.

The one big factor pushing house prices up

Thu, 05 Oct 2023 00:52:00 GMT

On the up and up

Property prices have soared almost 7% this year alone. With the upswing predicted to continue, we unpack what’s driving national housing values higher – and why it could pay to get into the market sooner.

Another month, another round of price upticks.

September marked the eighth consecutive month of home price growth, with CoreLogic saying property values nationally are up 6.6% since January.

That’s a solid price hike. The crazy thing is that prices are soaring despite a whole slew of interest rate hikes over the past 18 months.

So what’s pushing prices higher?

The key factor putting a rocket under property prices is a shortage of homes listed for sale.

Homeowners are sitting tight rather than selling across a number of cities, and that’s increasing competition between buyers.

According to CoreLogic, Adelaide, Brisbane and Perth have particularly low levels of homes for sale – around 40% less than previous 5-year averages.

There’s a bit more choice for buyers in Sydney and Melbourne, but both cities are still recording housing price gains (Sydney in particular).

That’s because rising prices aren’t just about a lack of homes listed for sale.

Record levels of net overseas migration are also a contributing factor.

In the year to March 2023, net overseas migration added 454,400 people to our population . That’s an extra 1,245 people each day, all looking for a home.

And according to ABS data , most immigrants settle in Sydney and Melbourne.

So as you can see, despite high interest rates, there’s upward pricing pressure on the nation’s five biggest capital cities (Hobart, Darwin and Canberra meanwhile have all seen house prices drop over the past 12 months).

Will values go higher?

At the current rate of growth, CoreLogic predicts we could see national housing values reach new highs as early as November.

Already, homes in Perth and Adelaide have smashed previous price records, notching up median values of $618,363 and $691,591 respectively in September.

Brisbane homes look set to reach record values in October, with the city’s current median home value ($761,379) just 0.6% below the previous peak.

What does this mean for home buyers?

As home prices nudge towards new highs, PropTrack says last year’s price falls have been completely reversed.

And most of the data suggests that prices are unlikely to take a tumble any time soon.

That’s because it’s possible that interest rates have peaked, population growth is rebounding strongly, and there is a shortage of new home builds.

Already we’re seeing a surge in home loan applications as more Australians recognise the current market provides a window of opportunity to buy before values rise higher.

No matter whether you’re buying a first home, second home or investment property, buying today could help you beat future price hikes.

So if you’ve got your eye on the property market, call us today and we can help you assess your borrowing power in the current climate, and even help line you up with pre-approval so you’re ready to strike when the opportunity arises.

Flat chat: why units could soon become hot property

Fri, 29 Sep 2023 00:19:00 GMT

Onwards and upwards

Apartments stand out as an affordable choice when it comes to cracking the property market, not to mention downsizing. But a looming shortage may soon push unit values higher.

For many of us, buying a house on its own block of land is the ‘great Australian dream’.

While plenty of people achieve this goal, our property journey is often book-ended by apartment living.

For first home buyers, units can be an affordable choice, costing around 30% less than houses according to CoreLogic .

Then, as we head into our senior years, an apartment offers secure, low-maintenance living, often with a wealth of amenities right on the doorstep.

Apartment demand is outstripping supply

Apartments may be affordable today, but a lack of new apartment construction, coupled with rising immigration levels, points to a looming apartment shortage according to CoreLogic.

And that could push values higher.

Over the next few years, new apartment construction is forecast to be 40% lower in the 2010s, leading to a shortfall of over 100,000 homes by 2027 .

Close to 60% of the new home shortfall is expected to be in the apartment market.

On the demand side, CoreLogic says a stronger-than-expected level of migration into Australia has seen overall housing demand “skyrocket”.

Historically, new migrants head to the high-density areas of our big cities, putting extra pressure on the unit market.

As CoreLogic explains, with interest rates potentially easing in 2024, greater demand and tight supply could fuel a “price boom” in the unit market.

Why more of us are choosing apartment living

Modern apartments are packed with the latest design and sustainability features, meaning they are no longer the poor relation of freestanding houses.

Across our major cities, apartments now account for 30% of all homes, up from 23% in 2010.

And the appeal doesn’t just lie with affordability.

Today’s apartments usually come with a wealth of benefits, including:

Government schemes: because apartments are generally cheaper than houses, they’re more often under the price caps for a range of government schemes, including the Home Guarantee Scheme , stamp duty concessions, and first home owner grants (usually for new builds). These schemes can be combined to potentially save you tens of thousands of dollars and get you into the property market years sooner.

Sought-after locations: apartment living can be the difference between living close to work, or facing a long daily commute from the outer suburbs.

Lifestyle advantages: the days of apartments being cramped and lacklustre are over. A variety of on-site amenities, from barbecue areas to pools, gyms and car-wash bays, make unit living convenient and relaxing.

Low maintenance living: not interested in spending precious spare time mowing the lawns or cleaning the gutters? It turns out plenty of others aren’t either. Unlike houses, units require minimal upkeep, letting residents enjoy more quality time.

Improved security: if you’re after a lock-and-leave lifestyle, modern apartments fit the bill. Advanced security features add up to a safe and secure living environment.

Is now the time to take the leap?

Right now, apartments still present an affordable option for first-home buyers, downsizers and investors.

The median apartment price across our state capitals is currently $637,593 – but if CoreLogic is correct, that figure could soon increase as demand outstrips supply.

So if you’d like help exploring your options to purchase your first property – for example, with just a 5% deposit via the Home Guarantee Scheme – then get in touch today to discover your borrowing power.

3 ways pre-approval can give buyers an edge

Fri, 29 Sep 2023 00:19:00 GMT

Are you looking to buy?

There’s a lot to be said for having your home loan pre-approved. But does pre-approval mean you’re putting the cart before the horse? Definitely not. Here are three ways pre-approval can help you get ahead of the competition.

Here’s a handy tip: you don’t have to wait until you’ve found a home you’d like to buy before making mortgage enquiries with a lender.

It’s possible to have a home loan pre-approved before you’ve even started to wear out shoe leather at open home inspections.

It can mean you’re ready to go with your loan, with only a few formalities to sort out, as soon as you’ve found the right place.

Even better, pre-approval doesn’t mean you’re committed to taking out a loan. It’s not a problem if you have a change of plans.

Here are three ways home loan pre-approval can put you in front in today’s market.

1. Pre-approval gives you a budget to stick to

When it comes to a major step like buying a home, there’s no room for guesswork.

With a pre-approved home loan, you know exactly how much you can borrow, and that’s the foundation for your home-buying budget.

It means you can focus on homes within your price range, and make an offer with confidence.

Pre-approval is especially important if you plan to bid at auction. It sets a clear line in the sand for your highest bid.

2. You can act fast

In today’s market, homes are selling in turbo-charged timeframes.

Figures from CoreLogic show the median selling time across our capital cities is just 27 days. That’s less than a month!

So you need to act fast to avoid missing out. Sellers might not wait around while you head to the bank to see if you qualify for a home loan.

Having pre-approval in place means you can get the ball rolling as soon as you find the right home, without getting pipped by a more organised buyer.

3. Pre-approval can show you’re a serious buyer

Nothing says ‘genuine buyer’ like home loan pre-approval.

Don’t be shy about letting real estate agents know your loan is pre-approved. It adds clout to your negotiations and gives vendors confidence that you have the finance to follow up any offer you make.

Just consider keeping some information up your sleeve, such as how much you’ve been pre-approved for.

After all, the real estate agent’s goal is to get the best price for the vendor, not the buyer!

How reliable is pre-approval?

Home loan pre-approval is not a guarantee that you’ll get a home loan.

You won’t get the green light for sure until you’ve found a place to buy, and the bank has checked that the property meets their lending criteria.

Your lender will also want to see that your personal finances haven’t changed since your loan was pre-approved.

It’s also worth keeping in mind that while there aren’t many downsides to obtaining a single pre-approval, getting too many over a short period of time with multiple lenders can potentially negatively impact your credit score and ability to take out a loan – as lenders might suspect you’re financially unstable.

Which pre-approval is better?

Home buyers are often surprised to learn that pre-approval isn’t available with every lender.

Even among banks that do offer this service, not all pre-approvals work the same. One sort is especially worth aiming for.

You may come across two types of pre-approvals:

1. System-generated pre-approvals

This sort of pre-approval is generated by a lender’s computer based on the information you enter about yourself.

You can get a result quickly this way. The catch is that the analysis isn’t thorough, making the outcome unreliable.

In particular, if any of the details you enter are incorrect, the bank’s IT system may wrongly say you don’t qualify for a home loan.

2. Fully assessed pre-approvals

As the name suggests, this type of pre-approval involves your bank’s credit team taking a close look at your finances, credit score and other personal and financial details to be sure you can comfortably manage a home loan.

A full assessment takes more time, but it’s worth the wait. It can help you feel more confident that you’ll be offered a home loan when you find your ideal property.

Want to find out more about pre-approval?

If you’re looking to buy a home and want to get an edge over the competition (to put in an early offer, for example), then pre-approval might be a much-needed ace up your sleeve.

We can help you work out which lender and which loan product is a good fit for your pre-approval situation.

So call us today to take the guesswork out of home loan pre-approval, and give yourself a head start over other buyers in the market.

Property market climbs towards new peak

Mon, 18 Sep 2023 01:00:00 GMT

Time to make your own rate cut?

The property market has thumbed its nose at higher interest rates, with values rising almost 5% since March. Here’s why national housing prices are climbing higher.

Australia’s housing market is making a bigger comeback than Barbie.

Despite interest rates rising 4% in a year and a cost of living crunch, home values have skyrocketed with prices soaring 4.9% nationally since March 2023.

The strength of the rebound has wiped out about half the losses recorded in the downturn between April 2022 and February 2023, when home values fell 9.1%.

In fact, the value of Australia’s housing market just hit $10 trillion again – the first time the total estimated value hit double digits since June 2022.

So what’s driving home prices higher?

CoreLogic says three factors are pushing up property values:

– Net overseas migration: more people are arriving from overseas than are leaving. That’s a lot of extra people looking for a place to live.

– Use of savings, profit and equity: upgraders are using savings, equity or profits from their home to buy their next place instead of borrowing more. This has seen demand for property stay strong even though rates have climbed higher.
– Tight supply: the volume of homes listed for sale is a lot lower than in previous years. That spells competition between buyers, which is putting pressure on prices.

Will property prices keep rising?

Home values have been rising steadily over the past six months. What happens from here hinges on how interest rates move, and whether the economy stays in good shape.

As a guide, CoreLogic is expecting some heat to come out of the market recovery by the end of 2023.

That’s great news for home buyers – as long as cooler prices aren’t the result of more rate hikes or a sluggish economy.

How to get ready to buy your next home

In today’s environment of rapidly rising home values, home buyers can score a winning edge by having their ducks in a row before inspecting homes listed for sale.

This increasing need to be organised is one of the key reasons why 67% of Australians turn to a mortgage broker for expert support when they buy their home. And according to research by Helia , prospective home buyers are getting support in the areas of:

– determining their borrowing power – 63% of those surveyed;
– help choosing the right loan – 60%;
– getting a home loan pre-approved – 56%; and
– applying for a loan – 55%.

So if you’d like help in any of these areas, or you want to get into the market before prices rise further, call us today to explore your home loan options.

How does your home loan compare?

Fri, 08 Sep 2023 04:00:00 GMT

Time to make your own rate cut?

No change to the cash rate again this month, but lenders’ mortgage rates have been jumping around more than a bunch of toddlers at a Wiggles concert. We reveal the current average rates to see how your loan compares.

Home owners are celebrating the official cash rate staying on hold for several months. But behind the scenes, Mozo reports that lenders have been “astonishingly busy” adjusting their home loan rates – both up and down.

Key movements over the last month include NAB, CommBank and Bank of Queensland lifting some of their variable rates.

However, in the fixed rate market, plenty of lenders including big banks such as CommBank, ING and Macquarie have slashed their fixed rates.

It goes to show, you can’t assume your home loan still offers a competitive rate just because the official cash rate hasn’t budged.

Question is, how does your loan shape up against the market?

Average variable home loan rate

Across owner-occupied home loans, the average variable rate right now is 6.60%.

Remember though, this is an average. It can be possible to pay far less.

We are still seeing home loan rates starting with a ‘5’ rather than a ‘6’. This makes it worth checking to see what you’re currently paying.

Fixed rates prove a mixed bunch

As of early September, fixed rates are averaging:
– 6.36% – one year
– 6.57% – two years
– 6.60% – three years

If you’re bold enough to fix for five years, the average rate is currently 6.49%.

These fixed rates assume a $400,000 loan with a 20% deposit, meaning a loan-to-value ratio (LVR) of 80%.

When could we see rate cuts?

It’s the question everyone is asking: when will interest rates start to fall?

First the good news.

A number of banks, including ANZ and Westpac , are tipping the cash rate has peaked and could stay the same for some time.

Westpac thinks we could see the cash rate fall by September 2024. AMP meanwhile is forecasting rate cuts even sooner.

But … not everyone agrees.

NAB economists expect one more rate hike before the end of 2023, with rates likely to fall by next Spring.

And the Reserve Bank of Australia (RBA), which makes the official rate calls, is warning we could see more rate hikes depending on how inflation and the economy are tracking.

Make a rate cut of your own

Even the experts can’t agree on where rates are heading.

But the banks aren’t waiting around for the RBA to drive their rate decisions, and neither should you.

Call us today to see how your home loan rate compares to the broader market. Chances are there’s a better deal out there just waiting to be claimed.

Low deposit first home buyers now have $82,000 in equity

Thu, 31 Aug 2023 06:26:00 GMT

Want to crack the market sooner?

First home buyers who bought into the market using the federal government’s 5% deposit scheme have racked up $82,000 in home equity on average, new data shows.

It’s been three years since the First Home Loan Deposit Scheme was launched, and while it’s known today as the Home Guarantee Scheme (HGS), it’s still helping first home buyers get into the market with just a 5% deposit and no lenders’ mortgage insurance (LMI).

The HGS attracted criticism from some circles – some pundits pointed to the low deposit as a stumbling block that could land homeowners in trouble if property values fell or interest rates rose.

It turns out both have happened, yet first homeowners haven’t let it hold them back.

From $35,000 deposit to $82,000 home equity

New data from the National Housing Finance and Investment Corporation (NHFIC), which runs the HGS, shows that first buyers who tapped into the 5% deposit scheme are now sitting on impressive piles of equity.

On average, these first-time homeowners have racked up $82,000 in home equity.

It’s a great result, especially when you consider that the average first home deposit across the scheme was just $35,200 in 2020, rising to $36,400 in mid-2023.

What is the Home Guarantee Scheme?

Getting a deposit together can be a massive hurdle when buying a home.

Research by Finder shows it can take 12 years for a young Australian to save a deposit for an average-priced apartment, or 16 years to accumulate the deposit for a house.

But if your deposit is lower than 20%, you can get stung with LMI, which can cost you anywhere between $4,000 and $35,000, depending on the property price and your deposit amount.

But through the NHFIC, the federal government has three low deposit, no LMI schemes – all under the HGS umbrella.

The first two, the First Home Guarantee and Regional First Home Buyer Guarantee , support eligible buyers to purchase a home with a low 5% deposit and no LMI.

The Family Home Guarantee , meanwhile, assists eligible single parents and guardians to buy a home with a deposit of just 2% and no LMI.

Want to crack the market sooner?

Along with the HGS, there can be other options such as family pledge loans, or the use of a guarantor, that could slash the time it takes to buy a home of your own.

So if you want to crack the property market sooner rather than later, call us today to find out if you’re eligible to buy a first home with just a 5% deposit. You could be in a place of your own by Christmas!

Help to Buy Scheme set to kick off in 2024

Fri, 25 Aug 2023 00:04:00 GMT

Need a leg up into the property market?

The highly anticipated Help to Buy Scheme will kick off next year, giving more Aussies a chance to score their dream home. Today we’ll unpack how the new federal government scheme will work, who it’ll benefit, and the fine print you need to know.

A key election promise of the Albanese government, Help to Buy is a shared equity scheme aimed at helping 40,000 low and middle-income earners buy a place of their own (10,000 allocations per year).

The scheme involves the government making an equity contribution worth up to 40% of the value of a new home, or 30% of the value of an established home. But that doesn’t mean Anthony Albanese will be rocking up unannounced to claim the guest bedroom, as we’ll explain further below.

Homebuyers need a minimum 2% deposit, and must be able to qualify for a home loan with a participating lender to fund the balance of the purchase. No lenders mortgage insurance is payable.

Homebuyers can choose to boost their stake in the property at any time, and the government won’t charge rent on its share of the home.

Who is eligible for Help to Buy?

Help to Buy is not limited to first homebuyers.

You do need to be an Australian citizen, and you can’t currently own your home or have a share in a residential home.

Income limits apply too. Singles can earn up to $90,000 annually, or up to $120,000 for couples.

Help to Buy property price limits

Property price limits apply for Help to Buy across state capitals, regional centres and ‘rest of state’ areas. The price caps are shown below.

NSW capital city and regional centres: $950,000
Rest of state: $600,000

VIC capital city and regional centres: $850,000
Rest of state: $550,000

QLD capital city and regional centres: $650,000
Rest of state: $500,000

WA capital city and regional centres: $550,000
Rest of state: $400,000

SA capital city and regional centres: $550,000
Rest of state: $400,000

TAS capital city and regional centres: $550,000
Rest of state: $400,000

ACT: $600,000

NT : $550,000

Regional centres are Newcastle and Lake Macquarie, Illawarra, Central Coast, North Coast of NSW, Geelong, Gold Coast and Sunshine Coast.

How much can I save with Help to Buy?

Under Help to Buy, homebuyers can take out a much smaller home loan. This provides valuable savings in loan repayments and interest costs.

The federal government estimates homebuyers can save up to $380,000 on a new home purchased through the scheme, or as much as $285,000 on an established home.

The fine print to be aware of

For low and middle-income earners struggling to buy a home, Help to Buy may be a game-changer.

But before you rush in, bear in mind that the scheme will see you share a stake in your home with the government.

So if or when you decide to sell the property, the federal government will put its hand out for a slice of the sale proceeds.

In this way, you won’t get the full benefit of the property’s long-term price growth, but rather a share of the profits in line with the proportion of ownership you hold.

Now’s the time to start planning

With Help to Buy due to launch next year, now’s the time to start planning.

If it’s something you might be interested in, don’t delay reaching out to us to find out more – it’s bound to be popular, and places are limited, so you’ll want to start preparing now.

More Aussies turn to mortgage brokers for a hand managing hikes

Thu, 17 Aug 2023 00:21:00 GMT

Need a helping hand?

An avalanche of rate hikes over the past 18 months has supersized home loan repayments. But savvy homeowners aren’t panicking. In fact, more mortgage holders than ever before are reaching out to brokers for expert help.

A recent survey by the Mortgage & Finance Association of Australia (MFAA) shows 95% of mortgage brokers are meeting with homeowners who have never used a broker before.

And it’s a move that’s paying off.

The MFAA reports nine out of ten brokers have successfully secured a rate discount for their clients this year.

And more than eight out of ten have helped their clients refinance to a new lender.

It just goes to show that if you’re struggling with mortgage repayments, you don’t have to go it alone.

How much could you slash from your home loan?

Part of a broker’s service involves contacting your current lender to negotiate a lower rate.

But if they don’t come to the party, real savings action can lie in refinancing.

Mozo has done the sums on the savings potential of switching from the average variable rates (6.60% for owner-occupiers; 6.96% for investors) to one of the lowest rate loans on the market.

They found that homeowners and investors in capital cities across the country who switch to a new lender can slash their repayments by $474 per month, on average That’s as much as $5,691 annually.

Now, the lowest rate loan might not be available to you in your situation (we’d have to help you check), but it does highlight that there are big savings to be made if you can refinance to a lower rate.

What if you have a fixed-rate home loan?

You’ve probably heard about the ‘mortgage cliff’ – it’s a term used to describe the financial shock that homeowners can face when their super-low fixed rate comes to an end.

And we’re not out of the woods (or away from the cliff) just yet.

The Reserve Bank of Australia says around one million borrowers will come off a fixed rate over the next 18 months.

Crazy thing is, a Finder survey shows more than one in ten people with a fixed rate home loan are in the dark about when their fixed rate will end.

That matters because skyrocketing interest rates mean the average mortgage holder farewelling a fixed rate could face a $1,677 hike in their monthly loan repayments.

So if you’re on a fixed-rate home loan, it might be worth checking when the fixed rate period is due to end, and if it’s soon, what options are available to you.

Time to call in the experts

No matter whether you’re feeling the pressure of higher rates, thinking of refinancing, or unsure about what’s happening with your fixed rate, it’s important to reach out for expert help.

Give us a call today for a helping hand with your home loan.

Sneaky rate hikes – is your lender behind them?

Thu, 10 Aug 2023 23:51:00 GMT

What are your options?

The Reserve Bank (RBA) may have kept the cash rate on hold but that hasn’t stopped some lenders from hiking their variable home loan rates. Here’s how borrowers are fighting back.

Home owners may be celebrating two months of the RBA cash rate staying on hold. But don’t pop the champagne cork just yet.

Mozo reports that some lenders have sneakily hiked their variable home loan rates in July despite the cash rate holding firm.

These hikes, known as ‘out-of-cycle’ rate rises, can fly under the radar.

So it’s important to keep an eye on what your lender is doing.

Who’s hiking rates?

Mozo says ANZ, Commonwealth Bank, Macquarie, Easy Street and Great Southern Bank are among the lenders that have topped up their variable loan rates even though the cash rate has stayed on hold.

In some cases the upticks may be as little as 0.03% – but some lenders have lifted their variable rates by as much as 0.15%.

On a $500,000 loan that could mean paying an extra $750 each year.

And right now every penny counts.

As a result, some home owners are taking matters into their own hands to help stay afloat.

One in two have changed their loan payments

Research by Canstar shows almost half of Australian mortgage holders are navigating higher rates by doing the following:

– 35% are reducing extra repayments,
– 29% are stopping extra loan repayments altogether,
– 26% are tapping into redraw or offset funds to help with repayments,
– 22% are refinancing to a lower rate loan, and
– 12% are extending their loan term.

Other changes involve switching to interest-only repayments, as well as more drastic moves such as selling a home or investment property.

Be warned though, altering repayment strategies can come at a cost

While the above strategies can help get you through a tough time, it would be remiss of us not to mention that some of them can come at a cost over the long term.

Reducing or stopping extra payments, for example, means you’ll likely have your home loan longer and therefore pay more interest.

Likewise, if you tap into your redraw or offset funds, you’ll pay more interest each month.

Last but certainly not least, by extending the term of a $500,000 loan at 6.73% from 20 to 25 years you could cut your monthly repayments by $348. But according to Canstar calculations, it could also mean paying a whopping $123,464 in extra interest over the life of the loan.

What can you do?

Those sneaky out-of-cycle rate hikes aren’t just annoying. They can leave you out of pocket while beefing up your lender’s profits.

But you don’t just have to wear the cost.

The first step is knowing the rate you’re paying.

Check your loan statements, or ask us to investigate for you.

If you’re not happy with the rate, we can help ask your current lender for a discount.

And if they don’t come to the party, we can help you weigh up the possible costs of making a switch.

We can help you crunch the numbers to reveal which strategy will help you save today – and tomorrow.

So give us a call to find out if your lender is quietly lifting your loan rate and what you can do about it.

Has the tide turned? What the RBA rate pause means for homeowners

Thu, 03 Aug 2023 00:42:00 GMT

Or is there one last wave still to come?

Mortgage holders rejoice – the Reserve Bank of Australia (RBA) kept the cash rate on hold in August for the second month in a row. So have we finally reached calmer waters? Or is there one last rate rise wave headed our way?

In what many will see as better news than a Matildas’ World Cup win, the RBA held interest rates steady in August for the second month in a row.

After a relentless string of rate hikes (12 since April 2022), homeowners may be sceptical about what’s happening.

So is the RBA board finally satisfied we’ve endured enough rate hikes? Or is RBA Governor Philip Lowe saving one last rate hike for mortgage holders as a parting gift before he vacates his position next month?

Let’s take a closer look at some of the underlying data.

Inflation pressures are easing

The RBA has made it clear that it has been hiking rates to help lower inflation.

So it was welcome news this week when the Australian Bureau of Statistics announced that annual inflation has dropped to 6.0% .

It’s fair to say most of us wouldn’t normally celebrate goods and services prices rising 6% over the past year.

However, it’s a sign that inflation is still falling from its peak of 7.8%, and that’s exactly what the RBA has been aiming for.

Why the rate pause?

The RBA knows it’s treading a fine line with interest rate decisions. At its August board meeting the central bank explained why it kept interest rates in a holding pattern:

– It can take time for the economy to respond to previous rate hikes.
– The outlook for household spending is uncertain. Many households are experiencing a squeeze on their finances. Others are benefiting from rising housing prices and higher interest income.
– Consumer spending has slowed “substantially” due to cost-of-living pressures and higher interest rates.

The tide might be turning, but is one last rate rise wave coming?

Inflation is down. Rates are steady.

So far, so good.

But we may not be in calmer waters just yet.

As this diagram shows , inflation is still well above the RBA’s target range of 2-3%.

So the RBA has left the door open for further rate hikes depending on how the economy is tracking, and of course, what happens with inflation.

Indeed, the RBA said as much in its latest rate announcement: “Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe”.

So … what’s the rate outlook?

As mentioned earlier, RBA Governor Philip Lowe will vacate the top job on September 17 and be replaced by his deputy, Michele Bullock.

Thus, one might think that if any more rate rises were planned in the short term, they’d take place before that transition occurs to help give Ms Bullock a clean slate to work from (assuming inflation data continues on a downward trend). And there’s only one RBA board meeting between then and now – on September 5.

Indeed, Westpac has made a bold call , saying we could be heading into a lengthy period of stable rates ahead of a rate cut, possibly in the second half of 2024.

So, with any luck, we could be through the thick of it.

Then again, all things considered, interest rates are now much higher than they were 18 months ago and will likely remain so for some time.

So if it’s been a while since you last looked at your home loan and current interest rate, call us today to make sure you’re paying a competitive rate on a loan that’s well-suited to your needs.

Why are fixed rates still rising? And when might they drop again?Why are fixed rates still rising? And when might they drop again?

Thu, 27 Jul 2023 02:24:00 GMT

Up and down and down and up

With plenty of pundits tipping interest rates will start to fall in the next 12 months, we look at why the big banks are hiking their fixed rates – and unpack what it means for the rate outlook.

The past few months have seen interest rates on fixed home loans deliver more ups and downs than a rollercoaster.

As recently as April 2023, a number of lenders were starting to cut their fixed rates.

Fast forward to July, and the major banks – NAB, Westpac, ANZ and the Commonwealth Bank – have all upped their fixed rates in the past fortnight .

Now you won’t find a fixed rate below 6% among the big four banks.

But aren’t interest rates expected to fall?

Home owners battling high rates are generally being urged to “hang in there” because interest rates are expected to slide down from their current highs over the next 18 months.

Westpac is predicting the Reserve Bank’s cash rate will drop to 3.85% by the end of next year.

Better still, NAB is anticipating the cash rate could dip to 3.10% by late 2024.

So … why are fixed rates rising then?

Some lenders are stepping up their fixed rates because they believe rates may go higher before they trend lower.

NAB and Westpac are both tipping the cash rate, currently sitting at 4.10%, could go as high as 4.60% by the end of the year.

Over at the Commonwealth Bank, the expectation is for one more rate hike, taking the cash rate to 4.35%, with a chance the cash rate may ratchet up to 4.60%.

This can all be confusing. The main point is that the prospect of rates heading higher before they head south again is a key factor driving some fixed rates higher.

What should I do?

The first step is to bear in mind that forecasts are just that – predictions. Not even the banks have foolproof crystal balls.

And the recent news that inflation slowed in the June 2023 quarter, with quarterly price rises being the lowest since September 2021, could see the Reserve Bank ease back on the interest rate dial. It could even bring fixed rates back down.

It’s also worth pointing out that not every lender is lifting their fixed rates.

A number of smaller lenders have trimmed their fixed rates, with some still offering rates below 6.0%.

That’s why it’s so important to get in touch so we can help you explore a wide range of lenders and loan products.

Your next step

Locking in your loan rate can bring certainty to your budget, and eliminate the stress of the rollercoaster rate ride.

If you’re not sure whether to go variable or fixed – or a combination of both – get in touch to see how the numbers stack up for your situation.

Where homeowners are spending $1 billion a month

Thu, 20 Jul 2023 00:41:00 GMT

Forget the footy. This is Australia’s real national sport.

Australians are showering their homes with $1 billion worth of love each month as home improvement spending ramps up. We look at the cost of popular renovations – and how to foot the bill.

Belts may be tightening but not, it seems, for renovators.

The latest figures from the ABS show Australians spent a whopping $1,044 million on home renovations in May 2023 alone. That’s up 4.3% on the previous month.

Our passion for renovating may stem from binge-watching home improvement shows through the pandemic. But there could be another factor at play.

It can simply be a lot cheaper to renovate your home than to sell up and buy elsewhere.

If you’re thinking of a few home improvements, here’s what to consider.

What are the most popular renovations?

The 2022 Houzz & Home Report reveals which rooms Australians have targeted for home improvements.

The kitchen comes up trumps, accounting for almost one in four (23%) renovations.

Other top contenders were living room, bathroom and bedroom makeovers (each 20%).

How much will a renovation cost?

A key step in planning a renovation is crunching the numbers to know the likely cost. This is a must-do before you start collecting colour charts and carpet samples.

Smaller renovations can be affordable do-it-yourself projects. For any structural or specialist work it pays to call in the tradies – and that’s when the cost can start to escalate. The latest Archicentre Cost Guide sets out typical costs for popular home improvements.

As a guide, you can expect to pay:
– $75-$120 per square metre to polish timber floorboards;
– up to $35 per square metre for interior painting;
– up to $4,600 for an extension; and
– up to $48,000 for a new kitchen (excluding appliances).

While home improvements may not come cheap, quality renovations can boost your lifestyle and your home’s value.

They can also be a money-saver – ‘green’ improvements such as installing rooftop solar panels can put money back in your hip pocket through lower utility bills.

How to pay for renovations

Working out how you’ll pay for a renovation is an essential part of the planning process.

You need to be sure you can comfortably afford the improvements, and avoid the not-so-exciting prospect of running out of funds mid-way through a project.

Using cash savings or a personal loan may be suitable for smaller projects – the shorter term of a personal loan (usually less than five years) can help keep a lid on the interest cost.

For more expensive projects, a home loan top-up can be a quick and easy solution, though it can hinge on you having sufficient home equity to qualify for additional funds.

At the top end of the scale, a dedicated renovation or construction loan is another option.

These can work by drip-feeding funds as different stages of the project are ticked off. You generally only pay interest on funds drawn down, making the cost more manageable.

Get started on your renovation

If a renovation is on your bucket list, call us to discover the options available to fund your project – and the costs involved.

Could apartment living help you dive into the property market sooner?

Fri, 14 Jul 2023 02:18:00 GMT

They say good things come in small packages

Buying a home for the first time can be challenging, especially with house prices soaring in recent years. So could switching from house hunting to unit searching be the way forward for you?

There’s no denying that getting into the property market in today’s economic climate ain’t easy.

The average Australian house price is now $725,000 – that’s 30% more expensive than the average national unit price.

Compare the price gap to September 2021, when the national median house price was $570,000 – just 9.6% higher than the median unit price of $520,000.

But is opting for a unit the right move for you?

Today we’ll look into the pros and cons of buying an apartment for your first home.

Affordability, lifestyle and location

First the pros: units are usually more affordable than houses.

Median capital city house prices have grown 31.6% in the past five years, while units have only increased by 9.8% .

Lower prices can not only make it quicker for you to save a deposit for an apartment, they could also make you eligible for better stamp duty concessions (either reducing your stamp duty bill or eliminating it entirely, depending on your state or territory).

And while a unit may not always have space to accommodate future expansions to your life and family, they are often located in thriving local community hubs with amenities, shops, and transport on your doorstep – great for young families still wanting to be in the thick of the action.

Potential for investment

Admittedly, owning a house can have advantages over owning a unit.

For starters, you don’t have to fork out for body corporate fees. And the capital growth you can gain from owning the plot of land your abode sits on often makes house ownership more attractive.

But buying a unit – rather than holding off until you can afford a house – also offers investment potential.

By purchasing a unit, you’re investing and building up your own equity, rather than paying off someone else’s mortgage if you’re renting.

So while you may not be able to buy the house just yet, an apartment can provide a valuable stepping stone to reaching that goal.

And should you be in a position to hang onto your unit when you upgrade to a home, you may get some decent rental income – if you buy in the right spot. On top of this, unit upkeep can be easier because those body corporate or strata fees go towards various maintenance activities.

Other affordable options

All that said, if apartment living isn’t for you, there are other cost-effective options for you to explore.

You could consider searching slightly further afield, with recent research identifying “sister suburbs” that are up to 200% cheaper than their in-demand neighbouring suburbs.

Rent-to-own arrangements could also make it easier for you to crack the market. These arrangements enable tenants to buy the property they’ve been renting once the lease ends, at a previously agreed price.

And whether you’re in the market for a house or a unit, there are government schemes that can help you fast-track home ownership and save.

The federal government has three low deposit, no lenders mortgage insurance (LMI) schemes available for eligible first-home buyers, regional first-home buyers, and single parents.

Eligible buyers can purchase a home with a deposit as little as 5% through the First Home Guarantee and Regional First Home Guarantee . While the Family Home Guarantee assists eligible single parents and guardians to buy with a 2% deposit.

Not paying LMI can save you anywhere between $4,000 and $35,000 – depending on the property price and your deposit amount.

The good news is that eligible first-home buyers can bundle the federal home guarantee schemes with other state government first-home buyer grants and stamp duty concessions for major savings.

Get in touch

If you’d like to give renting the big swerve and get a place of your own, give us a call.

Not only can we help you find a suitable loan and help organise your finances, we know the government schemes you may be eligible for to help get you into your first home sooner.

Mortgage holders breathe a sigh of relief as RBA puts cash rate on hold

Tue, 04 Jul 2023 05:25:00 GMT

What does this mean for your mortgage?

Phew! The Reserve Bank of Australia (RBA) has today decided to put the official cash rate on hold. So is the end of this rate hike cycle finally in sight?

The decision to keep the official cash rate at 4.10% will be welcomed by homeowners around the country after monthly repayments increased by about $1,135 per $500,000 loaned (for a 25-year loan) since 1 May 2022.

RBA Governor Philip said as interest rates had been increased by 4% since May last year, the Board decided to hold interest rates steady this month to provide some time to assess the impact of the increases.

“The higher interest rates are working to establish a more sustainable balance between supply and demand in the economy,” he said.

However, Governor Lowe kept the door open for potential rate rises in the months to come.

“Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will depend upon how the economy and inflation evolve,” he said.

“In making its decisions, the Board will continue to pay close attention to developments in the global economy, trends in household spending, and the forecasts for inflation and the labour market.

How much could your repayments increase if the cash rate is increased?

Let’s say you’re an owner-occupier with a 25-year loan of $500,000 paying principal and interest.

If the RBA increases the cash rate by another 25 basis points, and your bank follows suit, your monthly repayments could increase by another $76 a month. That’s an extra $1,211 a month on your mortgage compared to 1 May 2022.

If you have a $750,000 loan, repayments would likely increase by about $114 a month, up $1,816 from 1 May 2022.

Meanwhile, a $1 million loan would increase by about $152 a month, up about $2,422 from 1 May 2022.

Concerned about your mortgage? Get in touch

Are you starting to feel the pinch? You’re not alone. Many households around the country are feeling the pain of all the rate rises over the past 15 months.

There are also lots of people on fixed-rate home loans wondering what options will be available to them once their fixed-rate period ends.

Some options we can help you explore include refinancing (which could involve increasing the length of your loan and decreasing monthly repayments), debt consolidation, or building up a bit of a buffer in an offset account ahead of more rate hikes.

Breaking out of mortgage prison: can easing serviceability buffers help?

Thu, 29 Jun 2023 00:16:00 GMT

Have you had trouble refinancing lately?

Have you been keen to refinance but told you can’t? You’re not alone. Many Australian households are currently locked into their home loans due to rising interest rates. But some banks have recently started to lower their serviceability thresholds.

As interest rates have climbed, Australians have refinanced in unprecedented numbers.

In fact, a record high of $21.3 billion in refinancing took place in March 2023, according to ABS statistics – 14.2% higher compared to a year ago.

But some people are now unable to refinance and take advantage of potential savings because they don’t meet lender requirements.

They’re locked into what’s called “mortgage prison”.

What’s mortgage prison?

You see, prudential regulator APRA has guidance in place that requires lenders to stress-test all new mortgage applications at 3% above the interest rate the borrower applies for – even when refinancing.

And since the RBA’s official cash rate has increased from 0.10% to 4.10% in just 13 short months, many mortgage holders are now unable to refinance because they can no longer meet the 3% mortgage serviceability buffer.

But, there is an “exceptions to policy” in APRA’s guidance that states lenders can override the 3% buffer for exceptional or complex credit applications, if done prudently and on a case-by-case basis.

So recently some big players – including Westpac and Commonwealth Bank (CBA) – reduced their refinancing serviceability buffers to as low as 1%, if borrowers meet certain circumstances (more on that below).

Other smaller lenders are making similar moves, including Westpac subsidiaries St George, Bank of Melbourne and BankSA.

Many in the industry hope this will reduce mortgage stress and defaulted loans, given the current financial climate of rising rates and inflation.

What are the eligibility requirements?

They differ from lender to lender.

But for CBA you’ll need to have a loan-to-value ratio of at least 80%, a squeaky clean record of meeting all your debt repayments over the past year, and be refinancing to a principal and interest loan of a similar or lower value.

You’ll need to meet the 1% mortgage serviceability buffer, too.

For Westpac’s new “streamlined refinance”, you must have a credit score of more than 650.

You’ll also need a good track record of paying down all existing debts over the past 12 months, be refinancing to a loan that has lower monthly repayments than your existing one, and meet the 1% buffer test too, of course.

What’s the catch?

Ok, so under CBA’s new policy, for example, borrowers must extend their loan term out to 30 years.

Obviously this can cost you quite a lot in interest over the long run.

For example, RateCity research shows that if you took out a $500,000 loan with a Big Four bank three years ago, and if you applied for CBA’s refinancing offer today, your mortgage repayments could drop by as much as $235 a month.

But over the long run, you could pay up to an extra $32,117 in interest because you’d be extending your loan by an additional three years.

So while this option could help alleviate some financial stress now, you may have to pay for it over the long run – there’s a bit to weigh up.

Are the recent serviceability changes right for you?

Give us a call today to find out more about refinancing and successfully navigating serviceability thresholds.

We can guide you on ways to improve your chances of refinancing success and help you escape “mortgage prison”.

Homebuying intentions climb as Aussies untie themselves from rental crunch

Thu, 22 Jun 2023 00:12:00 GMT

Looking for a leg up into the market?

Despite the soaring cost of living and successive interest rate hikes, homebuying intentions have climbed, latest data shows. So why are so many people still chasing the great Australian dream? And what can you do to make your own dream a reality?

Despite a flurry of rate rises, new data this month shows homeownership is once again a top priority for many Australians, with the number of house hunters increasing.

Commonwealth Bank’s Household Spending Intentions Index showed a strong 14.4% increase in homebuying intentions in May , after dropping in April. May also saw new home sales increase across Australia for the second month in a row.

So what’s driving this appetite for property when finances are increasingly tight for many? And how can you boost your own chances of cracking the market sooner?

Rental squeeze

Across capital cities and major regional areas, there have been historic rental price increases and low vacancies.

Rental vacancies reached an all-time low of 1.1% in April , with the median price for renting a unit only $39 a week cheaper than renting a house.

Rising overseas migration has contributed to stiff competition in the rental space too – in the March quarter there was a 124% jump in rental enquiries year-on-year from one overseas country alone.

Understandably, many are looking to escape renting and grab their spot on the property market.

But with rate hikes and inflation, saving a deposit is no easy feat for many Australians.

So here are some ways to take the pressure off.

Schemes and grants to save time and money

There are many government schemes and grants designed to help you get into the market. And all can be used simultaneously, which can really bring in the savings!

Through the National Housing Finance and Investment Corporation , the federal government has three low deposit, no lenders mortgage insurance (LMI) schemes available for eligible first-home buyers, regional first-home buyers and single parents.

The First Home Guarantee and Regional First Home Guarantee support eligible buyers to purchase a home with a 5% deposit. And the Family Home Guarantee assists eligible single parents to buy with a 2% deposit.

Not paying LMI can save you anywhere between $4,000 and $35,000 – depending on the property price and your deposit amount – which can fast-track your first home-buying goal by four to five years.

Another home-buying cost that can have a real sting in its tail is stamp duty.

Fortunately for first-home buyers though, state governments have stamp duty concessions available – including South Australia, which announced last week that it was scrapping the tax for first-home buyers on new homes valued up to $650,000.

Meanwhile, Victoria , New South Wales , Queensland , Western Australia , Tasmania , the ACT , and the Northern Territory also offer stamp duty concessions. This can either eliminate or reduce the cost of stamp duty, if eligible.

Most state governments also offer first homeowner grants to help you get the keys to your own home.

Victoria , New South Wales , Queensland , Western Australia , Tasmania , Northern Territory , and South Australia all offer first homeowner grants.

If eligible, you could receive a grant of between $10,000 and $30,000 depending on your state and other eligibility criteria.

Give us a call

It’s important to note that spots for some of these schemes, such as the federal government’s first home guarantee, are limited.

And they’re popular, so it’s best to get in quick.

So if you’d like to kick renting to the curb, get in touch with us today.

We’ll help you work out your borrowing power, your loan options, and factor in what schemes you may be eligible for.

Mortgage serviceability: how to jump through the hoops

Thu, 15 Jun 2023 03:29:00 GMT

Making the cut

Mortgage serviceability can feel like a frustrating hurdle to clear. But it’s an important safeguard against borrowing too much, particularly in the current interest rate landscape.

It’s in the best interests of all parties involved if your mortgage is chugging along with regular repayments being made.

Borrowing an amount you don’t have a hope in hell of repaying can mean heartache for you, and can land your lender and broker in hot water.

Enter mortgage serviceability.

Before approving your loan application your lender will take a good look at your finances to see if you can meet repayments.

We’ll break down just what to expect with a mortgage serviceability test, and how you can improve your chances of gaining home loan approval.

What is mortgage serviceability?

Lenders and brokers have a duty of care to ensure you’re not provided with a loan that’s beyond your means.

In fact, the National Consumer Credit Protection Act (2009) is in place to ensure lenders and brokers are following responsible lending practices (here’s that hot water we were talking about earlier).

While this protects consumers from landing in financial dire straits, (which doesn’t have anything to do with getting money for nothin’ , unfortunately) … it means that lenders and brokers are serious about checking serviceability, which can create some strict hoops for you to jump through.

So how is serviceability calculated?

Your serviceability is calculated by looking at your income and subtracting your expenses and debt repayments (including your new home loan repayment amount).

We then need to work out what portion of your monthly income can go toward repayments. This is called your debt service ratio.

It’s also important to calculate your debt-to-income ratio, which is a measurement used to compare your total debt to your gross household income.

Your credit card limit will also be taken into account and you may need to prove that you have the means to pay off the limit within three years, even if the balance is $0.

Finally, a serviceability buffer is applied to the current interest rate to see if you’ll be able to continue repayments should interest rates rise.

In 2021, the Australian Prudential Regulation Authority (APRA) raised the serviceability buffer from 2.5% to 3%.

This buffer amount has been the topic of much discussion , with some arguing it’s making it tough for people to pass the assessment and refinance to a lower-rate loan. But APRA is remaining firm at 3% given the current state of interest rates.

How to increase your serviceability

Here are our top tips for increasing your serviceability score and improving your chances of home loan approval:
– Pay down your debts to improve your debt-to-income ratio.
– Reduce your expenses by cutting out non-essentials and looking for better deals on utilities.
– Reduce your credit limits or cancel credit cards you’re not using, if appropriate.
– Increase your income by starting a side hustle, asking for a raise, landing a higher-paying job, or even a second one (which we fully acknowledge is not possible for many families).

Other ways you can increase your chances of home loan approval:
– Improve your credit score. Lenders will delve into your credit history to see if you’re good at making repayments.
– Look at spending habits. Lavish overspending on non-essentials could raise a lender’s eyebrows.
– Make savings. Showing that you can put away money on a regular basis will look good on your application.

How much can you safely borrow?

Buying a home is an exciting prospect, but you don’t want to stretch yourself beyond your means.

This is especially important given the recent RBA interest rate hikes over the past year.

But we’re here to help you crunch the numbers and find a loan that will work for you, not against you.

If you’d like to find out your borrowing power and what loan options are available, give us a bell.

RBA attempts to beat back inflation with another rate hike, up to 4.10%

Tue, 06 Jun 2023 06:21:00 GMT

Here we go again…

Drumroll … The RBA has hiked the official cash rate for the 12th time since April 2022, increasing it to 4.10%. How much will this increase your monthly repayments? And how long does Philip Lowe plan to keep marching to this beat?

Another month, another 25 basis point cash rate rise. It’s now apparent the cash rate pause back in April was nothing but a false peak.

Reserve Bank of Australia (RBA) Governor Philip Lowe explained in a statement that while inflation in Australia had passed its peak, at 7% it was still too high and it would be some time yet before inflation was back in the 2-3% target range.

“This further increase in interest rates is to provide greater confidence that inflation will return to target within a reasonable timeframe,” he said.

Governor Lowe added that some further tightening of monetary policy may be required to ensure that inflation returned to target in a reasonable timeframe, but that would depend upon how the economy and inflation evolved.

“If high inflation were to become entrenched in people’s expectations, it would be very costly to reduce later, involving even higher interest rates and a larger rise in unemployment,” Governor Lowe explained.

“Recent data indicate that the upside risks to the inflation outlook have increased and the Board has responded to this.”

How much could this latest hike increase your mortgage repayments?

Unless you’re on a fixed-rate mortgage, the banks will likely follow the RBA’s lead and increase the interest rate on your variable home loan very shortly.

Let’s say you’re an owner-occupier with a 25-year loan of $500,000 paying principal and interest.

This month’s 25 basis point increase means your monthly repayments could increase by almost $76 a month. That’s an extra $1,135 a month on your mortgage compared to 3 May 2022.

If you have a $750,000 loan, repayments will likely increase by about $114 a month, up $1,702 from 3 May 2022.

Meanwhile, a $1 million loan will increase by about $152 a month, up about $2,270 from 3 May 2022.

Concerned about how you’ll meet your repayments?

A lot of households around the country will now be feeling the pain of these 12 rate rises. So if your household is one of them, know that you’re not alone.

Similarly, there are likely a lot of people on fixed-rate home loans wondering just what options will be available to them once their fixed-rate period ends.

Whatever your situation, please know that there are options we can help you explore.
Some of those options might include refinancing (which could involve increasing the length of your loan and decreasing monthly repayments), debt consolidation, or building up a bit of a buffer in an offset account ahead of more rate hikes.

So if you’re worried about how you might meet your repayments going forward, give us a call today.

The earlier we sit down with you and help you make a plan, the better we can help you manage any further rate hikes.

Why more Aussies are turning their backs on the McMansion

Thu, 01 Jun 2023 02:48:00 GMT

Bigger isn’t always better

Australians are increasingly “thinking small” when it comes to buying a home and cracking the property market. And with perks like affordability, more desirable locations, and lower maintenance, it’s little wonder why.

Many Australians are crossing the McMansion off their wish list in favour of smaller, smarter, low-maintenance homes.

A recent ING study surveyed over 1000 Australians about their home preferences.

Over a quarter (26%) said the cost of maintaining and running a larger home would see them gravitate to a smaller abode.

And 19% said they’d consider a smaller outdoor area for ease of maintenance.

Australia has some of the biggest homes in the world, according to the 2020 CommSec Home Size Report . But it seems that there’s a swing in the other direction.

A 2022 Australian Bureau of Statistics (ABS) report shows that Australian homes are being built on smaller blocks, with a size decrease of 13% over the past 10 years in capital cities.

So why the switch to smaller homes?

What are two things we all wish we had more of?

Money and free time, am I right?

With the cost of living rising (as well as the cash rate!), cracking the property market can feel like a slog. But revising your wish list to include a smaller (and smarter) home could make it easier.

On average, smaller homes, townhouses, and units tend to be more affordable. And this can be a great option for those wanting to get into the housing market in a more attractive location.

But a smaller dwelling delivers other perks, too.

ING’s study highlighted the growing preference for lower-maintenance homes to simplify lifestyles.

According to the ABS , Aussies spend around three hours a day on domestic activities.

But a smaller space can reduce cleaning time. And with a smaller outdoor area, you can reclaim your weekend and say goodbye to all that gruelling yard work.

Also, smaller homes can be more efficient when it comes to energy consumption.

A smaller home may help make you eligible for government schemes

If you’re a first-time home buyer, the Home Guarantee Scheme could give you the extra boost you need to get into the market.

Being eligible could shave, on average, five years off your home-buying process .

The First Home Guarantee and Regional First Home Guarantee offer loans with a low deposit of 5% with no lenders mortgage insurance (LMI).

And the Family Home Guarantee offers eligible single parents loans with a deposit of just 2% and no LMI.

However, the eligibility criteria include property price caps that are dependent on the state and geographical area you buy in.

Opting for a smaller, more affordable property could help you meet the eligibility criteria and speed up your home-buying journey.

But get in quick as places are limited, with a fresh round of intakes available from July 1.

Get the ball rolling

While you search for the perfect small abode, we can get to work on the home loan hunt.

If you’re a first home buyer, we know all the ins and outs of applying for government schemes, like the Home Guarantee Scheme.

Not all lenders participate, but we know who does and can give you some options to compare.

We’re also clued in on other government schemes you may be eligible for to help stack up the savings.

So if you’d like to find out more, get in touch today.

Is the property market starting to rebound?

Thu, 25 May 2023 04:23:00 GMT

Are you looking to buy in the next year?

Navigating the Australian property market over the past year has felt like standing on shifting sands. But is the market starting to regain stability? And if so, what can you do now to make sure you’re ready to buy?

Anyone with an eye on the property and finance market over the past few years has seen their fair share of thrills and spills. It’s been anything but uneventful.

But with the RBA’s rapid-fire rate hikes slated to peak in 2023, is there a property upswing afoot?

Westpac’s economists seem to think so – they’re predicting that the housing correction is winding down . The bank forecasts that Australian property prices will grow by 5% in 2024 after stabilising throughout 2023.

So this week we’ve looked into data from some of Australia’s leading property market and finance institutions.

The big four banks’ cash rate predictions

The RBA has raised the cash rate an eye-watering 11 times in 12 months, with the official rate reaching 3.85% in May 2023.

Understandably, this has made some would-be buyers gun-shy when it comes to pulling the trigger on applying for a home loan and buying a house.

But Australia’s four major banks have tipped that 2023/2024 could see the cash rate start to decline. Here’s what they’re each predicting:

Commonwealth Bank: peak of 3.85% reached, and will drop to 2.60% by August 2024.

Westpac: peak of 3.85% reached, and will drop to 2.10% by May 2025.

NAB: peak of 3.85% reached, and will drop again in 2024.
ANZ: peak of 4.10% by August 2023, then will drop to 3.85% by November 2024.

So, whichever financial institution you choose to listen to, it looks like we’ve either reached the cash rate peak, or are very close to it. And what goes up must (hopefully) come down.

Property prices are back on the move

In 2022 we saw national property prices take a small, but not insignificant, hit.

In response, sellers started waiting it out for a better price, creating a slim-pickings situation for house hunters.

However, Property Investment Professionals of Australia (PIPA) chair Nicola McDougall has stated that property prices look to be stabilising , partly due to the low volume of housing stock for sale.

Meanwhile, CoreLogic data shows that the three months to April marked the first quarterly boost to national property values since this time last year, with a 1% rise.

Why is this good news if you’re looking to buy? Well, hopefully you’ll soon have more suitable housing options to choose from as owners start to list again.

And with interest rates predicted to decline in 2023/2024, getting prepared now could put you in good stead to buy when the time is right.

Give us a call today

With all the above in mind, getting your pre-approved finance in place now could have you primed to pounce on your ideal home ahead of the next property market upswing.

And if you don’t think your deposit is quite there just yet, keep in mind that a new round of the federal government’s low deposit, no lenders mortgage schemes are set to become available from July 1, which can help first home buyers, regional buyers and single parents crack the market 5-years sooner, on average.

If you’d like to find out more, get in touch today and we can run you through your options and help arrange your finances.

Property valuation: what you need to know when buying a home

Thu, 18 May 2023 01:07:00 GMT

Are you in the market?

When buying property, it’s good to know the market value. After all, you want to know you’re paying a fair amount. But the property’s value is an important consideration for your lender too. And their valuation may be quite different.

Just how much is a property worth? Well, it depends on who’s asking.

When buying a property you’ll find there are different terms to estimate how much it’s worth, including market value, market appraisal and bank value.

And you’ll most likely find they can differ, which can be confusing.

Fortunately, we’ve got the low down to help you understand the difference. And how bank valuations affect your loan.

Market valuations vs market appraisals vs bank valuations

So, what is the difference between them all?

A market valuation, which is usually undertaken by a professional and qualified valuer, gives an estimate of the expected sale price of the property on the open real estate market.

It’s based on current market trends and is valuable to both sellers and buyers during sale price negotiations.

It can also be conducted for tax purposes for owners (ie. to calculate the taxable capital gain or capital loss).

A market appraisal (aka market estimate), on the other hand, is usually completed by a real estate agent and is often done to give homeowners an idea of how much their property could sell for in the current market.

But a bank valuation has an entirely different purpose.

When you’re buying a home or refinancing your loan, the bank will often need to conduct a bank valuation.

And it can feel like a real sting if the bank valuation comes in lower than expected.

But there’s a reason for this.

Banks are in the risk mitigation business. So their valuation is designed to provide an estimate of the property’s sale price as security against your loan should you default.

The valuations can be more conservative because lenders don’t take into consideration the property’s value in terms of an investment.

They’re looking at the property in terms of recouping loan costs with a quick sale.

And, rather than being provided by a real estate agent who may have a vested interest in price, bank valuations must be conducted by an accredited valuer.

Bank valuation process

When conducting a bank valuation, typically, the following factors are considered by the appraiser:

Current market conditions – just like with a market valuation, the current market climate and recent sales data for your area are examined.

Physical attributes – the location of the property, surrounding amenities, its layout, fixtures and features, size, structural condition, and council zoning information are considered.

Upon completion of the valuation, a report is provided to the lender to be used in assessing your loan application. This brings us to our next point.

Pitfalls to watch out for

They say that being forewarned is forearmed. So here are some pitfalls to be aware of when it comes to bank valuations.

Say you apply for pre-approval, find a place and make an offer, but then the bank valuation is a lot less.

Or you pay a deposit on a $700,000 off-the-plan property, only to have your bank come back with a $650,000 bank valuation when it’s time to move in.

If the bank valuation is less than expected, it may lead to the bank loaning you less than you hoped for.

You may need to come up with extra funds to close the gap or pay lenders mortgage insurance (LMI), which can cost thousands of dollars.

Alternatively, your loan application could be rejected outright.

Therefore, it’s a good idea to save up a bit of a buffer to handle any valuation headaches that may crop up.

Working with an experienced broker, like us, can help you to prepare for any nasty surprises and make for a smoother home-buying journey.

Find out more

If you’re on the hunt for the perfect home, let us help you track down the right loan and lender for you.

We’ll be there every step of the way to help you navigate the loan process with ease, and help get the keys in your hand.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Heads up business owners: the asset write-off deadline is looming!

Thu, 18 May 2023 01:07:00 GMT

Does your business need some new kit?

Business owners wanting to buy a vehicle, asset or important piece of equipment and immediately write off the full cost have just over a month to act.

That’s because the temporary full expensing scheme is set to expire on 30 June 2023.

It will be superseded by a much less generous scheme, known as the instant asset write-off, so if your business could do with expensive new equipment, an asset or commercial vehicle, you might want to act quick!

What is temporary full expensing?

Temporary full expensing is similar to the popular instant asset write-off scheme, but with an expanded scope.

Originally a stimulus measure to address the effects of the COVID-19 pandemic, the scheme allows businesses to make significant asset investments.

Businesses can have eligible depreciating assets immediately written off in full with no cost limit.

Yep, that’s right … no cost limit on eligible assets.

Applied for with your tax return, the scheme can reduce the amount of tax you have to pay for the financial year – which means you can reinvest the funds back into your business sooner.

Trucks, coffee machines, excavators, and vehicles are just some examples of assets eligible under the scheme.⁣⁣

But to take advantage of it, the asset must be installed and ready to roll by 30 June 2023.
So you’ll have to act quickly!

Asset eligibility

To be eligible for temporary full expensing, the depreciating asset you purchase for your business must be:

– new or second-hand (if it’s a second-hand asset, your aggregated turnover must be below $50 million);
– first held by you at or after 7.30pm AEDT on 6 October 2020;
– first used, or installed ready for use, by you for a taxable purpose (such as a business purpose) by 30 June 2023; and
– used principally in Australia.

What if I miss the deadline?

If you miss out on the 30 June 2023 deadline, or your order doesn’t arrive in time, hope may not be lost.

You may still be able to take advantage of the instant asset write-off.

This scheme will allow for eligible purchases of up to $20,000 to be written off by 30 June 2024, as recently unveiled in the 2023 Federal Budget.

However, as you might have noted, the available write-off amount is significantly lower than the temporary full expensing scheme that’s coming to an end.

Need a hand with a business loan?

When purchasing an asset with the intention of using this scheme, it’s crucial to select a finance option that’s suitable for your business.

And that’s where we can help out. We can present you with financing options that are well-suited to your business’s needs now, and into the future.

So if you’d like help obtaining finance that’s gentle on your cash flow, and helps you achieve your long-term goals, please get in touch ASAP so we can help you beat the EOFY deadline.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

More home buyers set to benefit from low deposit, no LMI schemes

Wed, 10 May 2023 23:25:00 GMT

Are you eligible?

More Australians (and permanent residents!) will soon be eligible for a leg up into the property market under an expanded Home Guarantee Scheme. Today we’ll run you through all the upcoming changes to the low deposit, no lenders mortgage insurance scheme.

Officially unveiled as part of the 2023 federal budget, the expanded Home Guarantee Scheme will have broader eligibility criteria from 1 July 2023.

So if you’re a single parent or guardian, first home buyer, haven’t owned property for a decade, permanent resident, or looking to buy a home with your friend or sibling – be sure to read on to find out if you’re eligible.

What is the Home Guarantee Scheme?

Getting a deposit together can be a massive hurdle when buying a home.

And if your deposit is lower than 20%, you can get stung with lenders mortgage insurance (LMI), which can cost you anywhere between $4,000 and $35,000, depending on the property price and your deposit amount.

But through the NHFIC , the federal government has three low deposit, no LMI schemes.

Which means if you’re eligible, you won’t need to wait until you’ve reached the standard 20% deposit.

The First Home Guarantee and Regional First Home Buyer Guarantee support eligible buyers to purchase a home with a low 5% deposit and no LMI.

And the Family Home Guarantee assists eligible single parents to buy a home with a deposit of just 2% and no LMI.

Access to these schemes can, on average, bring forward the home-buying process by five years !

It’s worth noting there is an eligibility criteria, which covers property types, locations and prices.

But an experienced broker (that’s us!) will be across all the ins and outs to help you work out if you qualify.

What are the upcoming changes?

Good news if you are among the increasing number of Australians joining with friends, siblings, and other family members to buy a home.

Come 1 July 2023, you may be eligible to lodge a joint application under the First Home Guarantee and Regional First Home Buyer Guarantee; previously you could only apply as an individual or married/de facto couple.

Meanwhile, the Family Home Guarantee is set to expand to include single legal guardians, such as an aunt, uncle or grandparent. Previously it was only for eligible single natural or adoptive parents.

All three schemes will expand to eligible borrowers who are Australian permanent residents, in addition to citizens.

And all three guarantees will include eligible borrowers who haven’t owned a property in Australia in the last ten years.

What you need to know

The Home Guarantee Scheme can be a great way to fast-track getting into the property market.

But you’ll have to get in quick because places are strictly limited.

That includes 35,000 places per financial year across the First Home Guarantee, 10,000 places per financial year under the Regional First Home Buyer Guarantee, and 5,000 places per financial year under the Family Home Guarantee.

Also, not all lenders are involved with the scheme. But we can help you to identify and compare participating lenders.

So give us a call today to get the ball rolling.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Homeowners brace as RBA raises cash rate to 3.85%

Wed, 10 May 2023 23:24:00 GMT

Are we there yet?

The Reserve Bank of Australia (RBA) has increased the official cash rate for the 11th time in the past year, taking it to 3.85%. Have we finally reached the peak of this cycle? And how much will this latest rate hike increase your monthly repayments?

In what will undoubtedly be tough news for many households around the country, this latest rate hike comes despite many pundits predicting the RBA would keep the cash rate on hold for at least another month.

RBA Governor Philip Lowe said while inflation in Australia has passed its peak, at 7% it was still too high and it would take some time before it was back in the target range of 2-3%.

“Given the importance of returning inflation to target within a reasonable timeframe, the Board judged that a further increase in interest rates was warranted today,” he said.

However, in what may come as welcome news to mortgage holders, Governor Lowe softened his language around the possibility of further rate hikes.

How much could this latest hike increase your mortgage repayments?

Unless you’re on a fixed-rate mortgage, the banks will likely follow the RBA’s lead and increase the interest rate on your variable home loan very shortly.

Let’s say you’re an owner-occupier with a 25-year loan of $500,000 paying principal and interest.

This month’s 25 basis point increase means your monthly repayments could increase by almost $75 a month. That’s an extra $1,060 a month on your mortgage compared to 3 May 2022.

If you have a $750,000 loan, repayments will likely increase by about $112 a month, up $1590 from 3 May 2022.

Meanwhile, a $1 million loan will increase by about $150 a month, up about $2,130 from 3 May 2022.

What happens if the cash rate increases further?

Economists at the big four banks are forecasting that the cash rate will now either remain at 3.85% or have one more hike to 4.10%.

Assuming you’re an owner-occupier with a 25-year loan, here’s how much more you could be paying each month if the cash rate reaches 4.10%:
– $500,000 loan: approximately $75 more = up $1135 from 3 May 2022, to a total of approximately $3,470 per month.
– $750,000 loan: approximately $112 more = up $1702 from 3 May 2022, to a total of $5,200 per month.
– $1 million loan: approximately $150 more = up $2280 from 3 May 2022, to a total of $6,950 per month.

Worried about your mortgage? Get in touch

There’s no denying that a lot of households around the country are feeling the pain of these rate rises.

There are also lots of people on fixed-rate home loans wondering just what options will be available to them once their fixed-rate period ends.

Tips to help stay on top amidst the rate hike cycle

Fri, 28 Apr 2023 02:25:00 GMT

Managing your mortgage as repayments rise

With every RBA rate rise announcement, mortgage holders brace themselves for impending repayment increases. Here’s how to stay on top of your mortgage and feel financially secure.

Let’s face it, the RBA’s rate rise cycle hasn’t been easy for mortgage holders, with average monthly repayments now hundreds of dollars (and in some cases, thousands of dollars) more expensive than they were a year ago.

Pair this with the rising cost of living and many Australians are eager to bolster their finances to weather the storm, especially as there are one or two more rate rises predicted to come.

But rest assured, there are things you can do to help manage your mortgage and stay on top of your finances.

1. Review your loan

Regularly reviewing your loan can help you assess whether it’s best suited to your current situation.

You may be able to access features that may benefit you such as an offset account. And even get a better interest rate.

Canstar research shows 63% of Australians haven’t attempted to negotiate their interest rate with their lender in the last year.

And only a quarter of those who did were knocked back. But you don’t have to run the risk of rejection yourself.

Get in touch with us and we can go in to bat for you.

And if we don’t think your lender is playing fair, we can help you look elsewhere. Which brings us to our next point…

2. What are competitor lenders offering?

Canstar research shows that 77% of mortgage holders may be paying more than if they switched loans.

And RBA data from November 2022 shows that on average, existing variable owner-occupier home loan rates were 5.29%, while new loans had an average rate of 4.79%.

This is known as the “loyalty tax” – where banks often only pass on better interest rates and features to new customers.

But we can help you out.

Let us do the legwork and find suitable refinancing options so you can save.

3. Avoid the mortgage trap

Before you refinance, it’s good to get a picture of your debt-to-income and loan-to-value ratios.

This can help you avoid being trapped in a mortgage without the ability to switch to a better interest rate.

Your debt-to-income ratio is your total debt divided by your gross income. Lenders use this to assess how you manage money and to calculate your borrowing power.

So if you’re seeking to refinance a $700,000 home loan (and have no other debt), and you have $160,000 in gross household income, your DTI is 4.375 – a ratio most lenders would be very comfortable with.

So make sure your other debts – such as car loans, and credit cards – are being managed, as well as your mortgage. It can help bolster your credit rating.

Your loan-to-value ratio is the comparison between your loan amount and the assessed value of your home.

This means that a drop in your property’s value can affect your ability to refinance.

And thus, if your equity drops below 20% some lenders may not accept your application to refinance. So refinancing at the right time (ie. before prices fall too low) can help you avoid being locked into your current mortgage.

If all this sounds complex or you just don’t have the time, we’re only a phone call away.

4. Track your spending

Like many of us, you’ve probably cut back on spending already.

But there’s a popular saying that rings true: “what gets measured gets managed.” Track your spending and see where additional changes can be made.

It can be a real eye-opener.

You may think “they can pry my daily cafe-bought triple shot latte from my cold dead hand” … but when the cost is tallied up, you may change your mind.

And that streaming subscription you never use and forgot about is still coming out of your bank account like clockwork.

5. Speak to us

Want a hand with all the above?

We can help you to refinance, consolidate your debts, manage application processes, and much more.

Get in touch today and we can help you through the refinancing process, even if there is possibly another rate rise or two to come.

Property listings and prices are bouncing back

Sun, 23 Apr 2023 23:35:00 GMT

Slim pickings no more?

As property prices start to climb, listings are following suit. So if you’re hunting for a home, what does this mean for you?

If you’ve been looking at the property market over the last six to 12 months, you probably already know that while property prices have dropped, it’s been a case of slim pickings due to the drastically low number of listings.

But prices look like they are starting to bounce back, with March heralding a 0.6% increase in national property prices , according to CoreLogic. And listings are following suit.

PropTrack data for March showed new listings on realestate.com had risen by 10.5% month-on-month , making it the busiest month for new listings since May 2022.

So why has the market changed? And what does it mean if you’re looking to buy?

Property prices and increased demand

When the RBA announced its rate rise pause in April, we all let out a collective sigh of relief.

And many financial and property analysts, including CoreLogic , estimated the pause may give rise to increased prices due to a boost in buyer confidence.

But there are other compounding factors that were influencing the pricing upswing before the rate rise pause.

Record low listings, a competitive and expensive rental market, and elevated migration placed increased demand on limited housing supply.

And prices started to climb despite consecutive rate rises.

Rising prices, combined with the Autumn selling season, have seen vendor confidence pick up and property listings increase.

But how does this affect you if you’re looking to buy?

Opportunity may be knocking

If you’ve been ready to buy but haven’t been able to find the right place due to low supply, now may be the time to purchase – before FOMO starts to kick into the market.

More listings mean you’ll have a greater chance to find a suitable abode, rather than sifting through the dregs.

But before you pounce on that perfect property, it helps to have your finance sorted.

Finding out your borrowing capacity and loan options are important steps when planning to buy.

And while the RBA’s pause bolstered our spirits, it’s wise to be mindful that there are a couple more cash rate rises expected.

Getting advice on the right type of loan, assessing your borrowing power, and organising your finances could make things smoother.

So if you’re keen to purchase in 2023, give us a call and we’ll get cracking on finding you a mortgage solution that will suit your individual needs.

What is the fixed-rate cliff and how can refinancing help?

Thu, 13 Apr 2023 01:21:00 GMT

How to make a smooth financial transition

You’ve probably heard the term “fixed-rate cliff” bandied about in finance news feeds. But what is it? And if you’re about to head over it, how can you prepare for a soft landing?

A staggering 880,000 fixed-rate loans are set to end this year , and when they do, many Australian households will be facing significantly higher mortgage repayments.

That’s because the variable interest rates now on offer are much higher than the fixed rates locked in years ago.

So today we look at what this so-called “cliff” might mean for your budget and how you can reduce the impact by refinancing.

But first, why is the fixed rate cliff looming in 2023?

Before 2020, fixed-rate mortgages equated to about 20% of total Australian home loans.

But during the pandemic, the RBA dramatically slashed the cash rate to a record low of 0.10%, and many savvy Australians pounced on the opportunity to lock in a low interest rate in early to mid-2021 for two to three years.

This saw 2021 fixed-rate borrowing basically double to 40% of total Australian home loans.

However, as with all good things, the low rate times came to an end.

Since May 2022, the RBA has hiked the official cash rate back up to 3.60%.

Those on fixed-rate loans have had a reprieve, until now – with 880,000 mortgage holders set to start rolling off their fixed rate throughout 2023.

And CoreLogic warns “the pain will be felt most acutely from April” this year.

What effects can a fixed rate cliff have

According to CoreLogic data , a mortgage holder who took out an average-sized loan of $538,936 with a fixed rate of 1.98% could see their repayments increase by over $1000 per month when rolling over to a standard variable rate.

Those who locked in 2020/2021 interest rates that hovered around the 1.75 to 2.25% range will be transitioning to interest rates as high as 5 to 6%.

That’s an increase greater than the 3 percentage point minimum interest rate buffer that lenders use to assess the serviceability of home loan applications.

How to refinance (properly)

When a fixed-rate loan period ends, lenders often don’t roll existing clients over to the best rates they have on offer.

The most attractive interest rates are usually reserved for new customers as an incentive.

But by refinancing with another lender you can access lower introductory rates, which can potentially save you thousands of dollars in repayments over time.

Working with a broker like us can take the stress off your shoulders when navigating the end of a fixed rate period.

We’ll use our vast network of lenders to zone in on suitable loans and lenders that are right for you.

And importantly, we’re (happily) bound by a best interests duty .

Get in touch

Is your fixed-rate cliff looming?

Get in touch today and we’ll get to work on finding you great refinancing options to soften the landing.

And if the landing is still looking a little bumpy, we can help you explore some additional options, such as increasing the length of your loan and therefore decreasing monthly repayments, debt consolidation, or helping you identify ways to build up a bit of a cash buffer in the meantime.

Whatever your situation, the earlier we sit down with you and help you make a plan, the better we can help you manage the transition.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Mortgage holders granted a reprieve as RBA puts interest rates on hold

Tue, 04 Apr 2023 22:44:00 GMT

Phew!

And … exhale. After 10 straight rate hikes the Reserve Bank of Australia (RBA) has today decided to put the official cash rate on hold. But for how long?

The decision to keep the official cash rate at 3.60% will be welcomed by homeowners around the country after monthly repayments increased by about $1000 per $500,000 loaned (for a 25-year loan) since 1 May 2022.

RBA Governor Philip said the RBA board took the decision to hold interest rates steady this month to provide additional time to assess the impact of the increase in interest rates to date and the economic outlook.

“The Board recognises that monetary policy operates with a lag and that the full effect of this substantial increase in interest rates is yet to be felt,” he said.

However, while the cash rate was not increased at today’s RBA meeting, Governor Lowe signalled there might be more rate hikes in the coming months.

“The decision to hold interest rates steady this month provides the Board with more time to assess the state of the economy and the outlook, in an environment of considerable uncertainty,” he said.

“In assessing when and how much further interest rates need to increase, the Board will be paying close attention to developments in the global economy, trends in household spending and the outlook for inflation and the labour market.”

How much have your repayments increased since 1 May 2022?

Let’s say you’re an owner-occupier with a 25-year loan of $500,000 paying principal and interest.

The wave of 10 successive rate rises means the repayments on your mortgage have increased by about $985 a month compared to 1 May 2022.

If you have a $750,000 loan, repayments will likely have increased $1,478 from 1 May 2022.

Meanwhile, a $1 million loan is up about $1,980 from 1 May 2022.

What happens if the cash rate increases further in future months?

Economists at the big four banks have forecast that the cash rate will peak at either 3.85% or 4.10% in the months to come (so, just one or two more cash rate hikes to go).

Assuming you’re an owner-occupier with a 25-year loan, here’s how much more you could be paying each month if the cash rate reaches 4.10%:
– $500,000 loan: approximately $75 extra per rate rise = up $1135 from 1 May 2022, to a total of approximately $3,470 per month.
– $750,000 loan: approximately $112 extra per rate rise = up $1702 from 1 May 2022, to a total of $5,200 per month.
– $1 million loan: approximately $150 extra per rate rise = up $2280 from 1 May 2022, to a total of $6,950 per month.

Worried about your mortgage? Get in touch

Despite today’s reprieve, there’s no denying that a lot of households around the country are feeling the pain after 10 successive rate rises.

There are also lots of people on fixed-rate home loans wondering what options will be available to them once their fixed-rate period ends.

Money habits that may raise lenders’ eyebrows

Wed, 29 Mar 2023 23:00:00 GMT

Does your spending add up?

We all know being on our monetary best behaviour can help to land a home loan. But did you know there are common spending habits you may have that are red flags to lenders?

Smart money management and cutting back on expenses can help your home loan application. That’s no secret.

But a bit of measured discretionary spending can add a little spice to life. We’re human after all. And lenders will see this as normal.

However, there are certain spending habits and types of transactions that can be a red flag to lenders. And these may hinder your chances of home loan approval.

Check out our list of potentially problematic spending habits below; avoiding them just might make all the difference when you apply for your next home loan.

PayPal transactions

There’s nothing inherently wrong with using PayPal. It’s often a convenient and safe way to make online purchases.

But many expenses that lenders may scrutinise, such as online gambling, and other unmentionable vices, use PayPal with vague descriptors.

This makes it easier to hide spending habits some may not want the world to know about.

And even if your PayPal spending is mundane, if the descriptions are vague, lenders may still raise an eyebrow.

Purchases through bank accounts on the other hand make it easier for lenders to see your spending habits when assessing your application.

Buy now, pay later

It can be tempting to use a buy now, pay later (BNPL) service to splurge on a new outfit and leave future you to stump up the cash.

However, even though BNPL services aren’t traditional credit products, they can still affect your credit score.

That’s because when you apply for a BNPL service, there’s a chance it may be recorded as an enquiry on your credit report – and these enquiries may impact your credit score .

Worse still, a few missed payments later and that purchase may not seem like such a hot idea – BNPL services can notify credit reporting agencies that you’ve defaulted on a payment, leaving you with a blemish on your credit report.

Last but not least, the Australian Prudential Regulation Authority (APRA) recently amended its framework to include BNPL debts in the reporting of debt-to-income (DTI) ratios.

And a high DTI can lessen your home loan borrowing capacity, or even lead to rejection.

Dipping into savings too often

Having regular savings locked away, untouched, and accruing interest … well, that can make lenders smile when assessing your mortgage application. But as we all know, life happens. Unexpected expenses may crop up that require you to dip into your savings.

This isn’t the end of the world when applying for a mortgage, but pinching too much from your piggy bank might get lenders thinking that you’re unable to put money aside and budget.

This could lead lenders to believe that you will struggle to make regular repayments.

Store credit cards

Many stores will entice you with swanky perks in return for signing up for their credit card. But often, when you look past the interest-free period sparkle, the interest rates are rubbish.

One or two forgotten payments can really end up costing you.

Also, lenders may view having a multitude of store cards as “fishing for credit” – sourcing credit from different places may make it look like you’re scrambling for money.

And every time you apply for a store credit card, your credit report is pinged, which as mentioned previously, can harm your overall score.

Frequent large ATM withdrawals

Some people still prefer to use cash, which is fine. But keep in mind that in the eyes of lenders it may make your spending habits hard to track.

Lenders may question your withdrawals. If you have a fair explanation, and possibly some supporting documentation, then cash withdrawals likely won’t have a negative effect on your application.

However, keep in mind that withdrawing a few hundred dollars every Friday night at the local service station or bottleo ATM isn’t a great look.

Get your ducks in a row

Nobody likes the sting of rejection.

But fear not because we’re experts in helping people shape up their finances for a schmick mortgage application.

So if you’re thinking about buying but are worried about how some of your recent transactions or money habits might look to a lender, get in touch today and we can help you start to smooth things out.

Time to jump in? First home buyer deposit saving times plunge

Thu, 23 Mar 2023 03:26:00 GMT

Have you been saving up for a deposit?

Home loan headlines have been, let’s face it, a bit of a downer of late. But the good news is that first-home buyers are now reaching their 20% deposit goal faster.

First home buyers have been delivered a bit of well-deserved good news with the findings of the 2023 Domain First Home Buyer Report .

The analysis shows that first-home buyers aged between 25 to 34 are hitting their house deposit saving goal more quickly compared to April 2022 – a month before the first of ten consecutive cash rate hikes.

State-by-state breakdown

Sydney experienced the biggest decline – a whopping 17-month drop in average deposit-saving time frames, with it now taking 6 years and 8 months to save a deposit compared to 8 years and 1 month in April 2022.

Brisbane (now an average of 4 years to save a deposit) and Canberra (now 6 years) came in second, both experiencing a 14-month drop.

Melbourne (now 5 years 7 months) and Darwin (3 years 6 months) came next, both with an 11-month decrease in saving periods.

Hobart (5 years 8 months), Perth (3 years 7 months) and Adelaide (4 years 9 months) all saw smaller drops of 5 months, 2 months and 1 month respectively.

Why is it quicker to save a deposit now?

Well, 2022 saw a steady decline in national house prices in response to increasing interest rates. In January 2023, CoreLogic reported a record national home value decline of 8.40%.

And as property prices fall, so too does the cost of your 20% deposit.

Also contributing to the shorter savings periods is ABS data showing that wages have grown in both public and private sectors, while the unemployment rate is hovering at a low 3.5%. Rate hikes meanwhile have seen savings accounts accrue more interest.

Overcoming potential challenges

Despite the promising new CoreLogic findings, saving a 20% deposit can still be a stretch for many.

The increased cost of living means just paying for essentials takes a big chunk of the paycheck, leaving less for savings.

And with home loan interest rates on the up, borrowing capacity has dropped and mortgage serviceability can be difficult.

Also, CoreLogic has reported that house prices have begun to stabilise.

So, as a first-home buyer, how can you speed up the buying process?

Get in on government incentives

Taking advantage of government schemes can speed up your home-buying journey by 4 to 4.5 years , on average.

For example, the First Home Guarantee could see you paying a deposit of just 5% while avoiding an eye-watering lenders’ mortgage insurance fee.

But you’ll have to be quick because spots are limited and can disappear quickly. The next allocation period in July is creeping up, so getting on board with a mortgage broker (like us!) ASAP is a good idea.

We’ve got the know-how to get your First Home Guarantee application on track.

And, we can see if you’re eligible to maximise your savings by combining other government incentives.

Find out more

If you’re ready to take the plunge and buy your first home we can help get a plan in place to make it happen.

We’ll calculate your borrowing power, assess your finance options, and assist in taking advantage of government incentives.

Call us today.

Got an eagle eye on house prices? Rate rises are only part of the story

Thu, 16 Mar 2023 01:37:00 GMT

How are you going with your repayments?

Rate rises can affect the property market, as we’ve all seen of late. But there are other factors that appear to hold longer-term sway over national house prices.

In a bid to bust inflation, the Reserve Bank of Australia (RBA) has been on a rate rise run that’s seen the official cash rate go from a record-low of 0.10% to 3.60% in just 10 short months.

Along the way, we’ve seen property prices across Australia decline.

As rates rose, Australia saw the largest and swiftest property price drop on record, with a 9.1% fall from April 2022 through to February 2023.

But a recent study by Domain , which examined 30 years of data, suggests that population and migration growth have greater and more long-lasting effects on property prices.

The study shows that a 1% mortgage rate increase may result in Australian house prices falling by 1.34%, on average.

But in comparison, national house prices could jump by 8.18% with a population increase of only 1%.

So let’s examine the effects of mortgage rate rises and population growth so you can navigate the market.

Mortgage rate rise effects

When interest rates rise, your borrowing power can dip. And the rise in the cost of living can hit the hip pocket.

So, under these conditions, fewer people may be willing to buy property.

With less demand, vendors may need to lower prices in order to sell homes. And if you’re ready to buy you may be able to negotiate a great price.

But the RBA can’t keep raising the cash rate forever (surely!).

In fact, economists at each of the big 4 banks have forecast that the RBA will announce just one or two more rate rises by 2 May 2023, with a peak cash rate of 4.10% predicted.

Corelogic stated in their recent three-year post-pandemic market report that once we get a rate hike reprieve, property sale and price volatility may lessen.

Population and migration effects

While mortgage rate rises do affect property prices, other factors appear to have more long-term effects.

Doman’s findings outlined that property prices are reactive to rate rises within the same quarter, whereas movement in population and migration numbers is cumulative and the effects are longer lasting.

So as migration numbers continue to rebound following COVID-19 lockdowns (and lockouts), it’s likely we’ll see an increase in property demand, which could cause prices to rise.

For example, Domain says Melbourne has “made a quick population recovery” since the COVID-19 lockdowns and is slated to nab the title of Australia’s most populated city by 2031-2032 .
Melbourne had an 8.1% property price drop in 2022 , while Sydney experienced a heftier reduction of 12.1%.

Domain’s study suggests that Melbourne’s population boom, and the resulting increase in housing demand, are behind the more moderate price drop.

And so, while it’s worth considering mortgage rates when surveying the property market, other factors like population and migration – which feed directly into supply and demand – are certainly worth considering too.

If you’d like to dig into the modelling further, the Australian government’s Centre for Population website has a great interactive tool that you can use to check out migration forecasts for each state and territory.

Get in touch with us today

Keeping an eagle eye on property prices is a great idea if you’ve got home ownership in your sights.

And while you’re busy researching the market, we can get cracking on helping to find the right loan for you.

We can also help you get financially savvy with tips to boost your borrowing power. That way you’ll be ready to pounce when the time is right.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Homeowners feel the pinch as RBA lifts cash rate to 3.60%

Tue, 07 Mar 2023 04:58:00 GMT

How are you going with your repayments?

The Reserve Bank of Australia (RBA) has increased the official cash rate for a tenth straight meeting, taking it to 3.60%. How much will this rate hike increase your monthly mortgage repayments, and how many more rate rises are expected to come?

The RBA’s latest move takes the cash rate to its highest level since May 2012 .

However, in somewhat hopeful news for mortgage holders, RBA Governor Philip Lowe has softened his language around the timing of future rate hikes.

While last month he said “further increases in interest rates will be needed over the months ahead”, no such statement was included in this month’s rate hike announcement .

In assessing when and how much further interest rates need to increase, Governor Lowe said the RBA board will be “paying close attention to developments in the global economy, trends in household spending and the outlook for inflation and the labour market”.

“The board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that,” he added.

How much could this increase your mortgage repayments?

Unless you’re on a fixed-rate mortgage, the banks will likely follow the RBA’s lead and increase the interest rate on your variable home loan very shortly.

Let’s say you’re an owner-occupier with a 25-year loan of $500,000 paying principal and interest.

This month’s 25 basis point increase means your monthly repayments could increase by almost $75 a month. That’s an extra $985 a month on your mortgage compared to 1 May 2022.

If you have a $750,000 loan, repayments will likely increase by about $112 a month, up $1478 from 1 May 2022.

Meanwhile, a $1 million loan will increase by about $150 a month, up about $1,980 from 1 May 2022.

What happens if the cash rate increases further?

The big four banks are forecasting that the cash rate will peak at either 3.85% (CBA’s prediction) or 4.10% (NAB, Westpac and ANZ).

Assuming you’re an owner-occupier with a 25-year loan, here’s how much more you could be paying each month if the cash rate reaches 4.10%:
– $500,000 loan: approximately $75 extra per rate rise = up $1135 from 1 May 2022, to a total of $3,470 per month.
– $750,000 loan: approximately $112 extra per rate rise = up $1702 from 1 May 2022, to a total of $5,200 per month.
– $1 million loan: approximately $150 extra per rate rise = up $2280 from 1 May 2022, to a total of $6,950 per month.

Worried about your mortgage? Get in touch

There’s no denying that a lot of households around the country are feeling the pain of these rate rises.

There are also lots of people on fixed-rate home loans wondering just what options will be available to them once their fixed-rate period ends.

Some options we can help you explore include refinancing (which could include increasing the length of your loan and decreasing monthly repayments), debt consolidation, or building up a bit of a buffer in an offset account ahead of more rate hikes.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

The latest twist in the tale of national property prices: explained

Thu, 02 Mar 2023 00:00:00 GMT

Like sands through the hourglass …

The property market has had more plot twists than a daytime soap opera in recent years. So getting the skinny on current trends is helpful when you’re planning to buy. Here’s the lowdown on the latest surprising bit of data.

Despite all the media doom and gloom predicting that the Australian housing market would tank in 2023, national property prices actually rose ever-so-slightly in February.

So what the heck is going on?

Property price trends

You may have heard it’s been a bit of a buyer’s market in recent times. Over the past 12 months, property prices were down 7.2% , the biggest annual drop since May 2019.

With rising interest rates, buyer demand slowed. This saw properties sitting on the market for longer.

And to entice sales, vendor discounting rose to -4.3% in January 2023 from -2.9% in November 2021.

However, recent data shows things may be starting to turn.

A PropTrack analysis shows that Australian property prices actually rose by 0.18% in February 2023.

And here’s why …

Impact of housing supply

If you’ve been house hunting recently you may have noticed it is slim pickings. In fact, as of December 2022, new listings were 20.4% lower year-on-year .

Lower listing volumes for most states has created increased buyer competition, which has helped drive prices up slightly.

Now, this may just be a blip – listing volumes can experience seasonal fluctuations and if supply increases again prices may drop back down.

But it just goes to show how hard the market is to predict. And those who are holding out on buying until the market drops further might want to start preparing their finances sooner rather than later.

Impact of interest rates

Why were national property prices expected to drop in 2023? And why might they still fall? Well, successive rate rises have seen the RBA’s official cash rate hit 3.35%, up from 0.10% in May 2022.

And in a recent statement, RBA governor, Philip Lowe announced the Board expects more rate hikes for 2023 .

As interest rates rise, so too do mortgage repayments, which means buyers are unable to borrow as much – leading to downward pressure on property prices.

But as we’ve seen in February, other factors – such as the number of homes available to buy – can counteract that downward pressure.

Have a chat with us

Keeping your finger on the pulse of the property market is tough enough – let alone finding the right home loan, organising your finances and navigating the application process … buying a home can feel like a full-time job in itself!

But we’re here to help. We can use our network of lenders to find the right home loan for you, so you can focus on nabbing your new home.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Take the heat off rate hike fears with these 4 tips for buyers

Wed, 22 Feb 2023 22:53:00 GMT

How to stay cool, calm and collected

Have recent rate hikes made you nervous about taking the plunge into the property market? You’re not alone; it’s a buyer’s market for a reason. Here’s how to stay cool and calm when buying your next property.

As you’ve probably seen in the news, the Reserve Bank of Australia (RBA) has increased the official cash rate from 0.10% to 3.35% in just nine months.

It’s now the highest it’s been since September 2012 – so it’s only natural to feel a bit hesitant about buying property right now.

But rest assured with the right buying strategies in place, you can navigate rate hikes and mitigate potential financial stress.

1. Know your borrowing capacity

Get to know your borrowing capacity, and consider leaving yourself a bit of a buffer by purchasing under the maximum amount.

That’s because over the many years it takes to pay off a home loan, your financial or personal circumstances may change, and interest rates could rise further.

Buying a bit under your capacity allows you to create a financial buffer to adjust and adapt to any unforeseen changes.

We can help you calculate your borrowing capacity before you start house hunting – so you don’t fall in love with a place that could create more financial stress than it’s worth.

2. Take advantage of it being a buyer’s market

With rising interest rates and inflation, there’s been a softening of the market and this may reward those who are ready to buy now.

According to CoreLogic , “it’s a buyer’s market”! In the three months to December, the median time a property spent on the market increased to 31 days across the capital cities and 41 days in regional Australia.

That’s a big increase from a median of 20 days in November 2021.

“Buyers are no longer facing a sense of urgency to make a purchase decision and they can negotiate on price more aggressively,” explains CoreLogic’s executive research director Tim Lawless.

“If they don’t secure a price they think reflects good value, they can simply move on to the next property amid persistently declining prices.”
And by targeting properties that have been on the market for a while, you could potentially have more bargaining power (just be sure to do your due diligence!).

3. Take advantage of government schemes

There are various government schemes that may help reduce the size of your new mortgage and other associated costs.

For instance, the federal government offers low deposit, no lenders mortgage insurance (LMI) schemes through the NHFIC.

The schemes can save eligible first home buyers thousands of dollars and speed up home ownership by 4 to 4.5 years on average .

Meanwhile, all state and territory governments (except the ACT) offer first-home buyer grants, while most (except South Australia) offer concessions to take the stamp duty sting out of house buying.

On average, stamp duty can tack an extra 3-4% onto your property value, depending on the state and property price, so keeping this hefty sum in your pocket is a good deal.

We have all the low-down on government schemes and can help you navigate eligibility criteria. We can also explore the possibility of bundling the schemes together for more savings.

4. Let us help guide you

That super low-interest rate loan you saw on a Facebook ad might have looked like an absolute steal, but did you notice the eye-watering fees in the fine print?

And did you know that shopping around for a home loan by sending in multiple loan applications can negatively impact your credit rating?

Speaking to a mortgage professional like us can help you avoid these common pitfalls, and others.

We can help you find the right lender, home loan rate and terms that’ll suit your individual needs.

Better still, we can help you organise your finances for your application and navigate all the red tape.

So if you’ve been a bit nervy about purchasing in this current financial climate, give us a call today. We love nothing more than helping people navigate the complexities of the finance and property markets.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

How to prepare for a fixed-rate mortgage cliff

Thu, 16 Feb 2023 03:37:00 GMT

Make a smooth transition

Do you have a fixed-rate mortgage contract that’s coming to an end soon? It can be a stressful time, particularly with rate rise news dominating the headlines. So today we’ve got some tips for a smooth transition.

Like many Australians, you may have taken advantage of the interest rate good times by locking in a cracking rate.

But as they say, all good things must come to an end.

Indeed, the Reserve Bank of Australia (RBA) has estimated that 800,000 fixed-rate loans will end this year .

If that includes your loan, below are some tips to help you navigate the transition to higher repayments smoothly.

Crunch the numbers

Variable interest rates have been rising in recent months. And you can expect your mortgage repayments to follow suit once your fixed-rate loan contract ends.

Do you know how much extra you may have to pay each month? And where will you find the extra cash?

Giving your budget a tidy-up now may put you in a better position to decide what loan product will suit you going forward to help you meet your repayments.

Consider cutting back on non-essentials (streaming services, takeaway coffees, alcohol, restaurants) and look for cheaper offers on your big-ticket bills like insurance and utilities.

Doing so now can also help you save up a buffer that’ll ease your transition to future higher loan repayments.

Negotiate your rate

One of the worst things you can do when rolling off a fixed-rate loan is to simply accept the variable rate your lender automatically provides.

Lenders are more likely to offer attractive rates to new customers, not their existing ones. It’s often referred to as the “loyalty tax”.

Before your fixed-rate contract ends, we can talk to your lender and let them know you’re exploring your options.

In order to keep you on board they may very well make an offer you find acceptable.

Do you want to refix?

Continued rate rises are expected in 2023 and, depending on your situation, you may wish to refix your loan.

You could also consider a split loan – where part of your loan has a variable rate, and the other part is fixed.

That said, not all lenders allow you to refix all or part of your loan.

If you want a fixed or split loan and your current lender won’t provide it, then you may want to explore your options elsewhere by refinancing.

This brings us to our next point.

Time to refinance?

If your existing lender doesn’t come up with the goods then refinancing is an option.

Refinancing may get you access to rates and features that banks use to woo new customers. And it can potentially save you thousands.

According to 2022 PEXA data , refinancers saved on average $1,524 per year. The ACCC reported in 2020 that mortgagors with 3 to 5-year-old loans paid an average 58 basis points more in interest than new lenders.

If you’re considering refinancing, you may want to act sooner rather than later. With house prices falling , it’s important to make sure you have enough equity in your home to refinance.

Talk to us

Last but not least, come and chat with us well before your fixed rate ends – not after.

We can help you crunch the numbers, negotiate a new rate, and help with refixing and/or refinancing.

Acting early means we’ll have plenty of time to explore plenty of different options for you and help you find a solution that will allow for a smooth transition.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

RBA hikes the cash rate for the ninth time in a row, to 3.35%

Tue, 07 Feb 2023 21:35:00 GMT

How many more rate hikes to come?

The Reserve Bank of Australia (RBA) has kicked off 2023 by increasing the cash rate a further 25 basis points to 3.35%. How much will this rate hike increase your mortgage repayments in 2023, and how high is the cash rate expected to go?

This is the ninth rate hike by the RBA in as many meetings (since May 2022), and it takes the cash rate to its highest level since September 2012 .

RBA Governor Philip Lowe said in a statement that the RBA board expects that further increases in interest rates will be needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary.

“In assessing how much further interest rates need to increase, the Board will be paying close attention to developments in the global economy, trends in household spending and the outlook for inflation and the labour market,” said Governor Lowe.

How much are your mortgage repayments expected to increase in 2023?

Unless you’re on a fixed-rate mortgage, the banks will likely follow the RBA’s lead and increase the interest rate on your variable home loan soon.

Let’s say you’re an owner-occupier with a 25-year loan of $500,000 paying principal and interest.

This month’s 25 basis point increase means your monthly repayments could increase by almost $75 a month. That’s an extra $910 a month on your mortgage compared to May 1.

If you have a $750,000 loan, repayments will likely increase by about $115 a month, up $1365 from May 1.

Meanwhile, a $1 million loan will increase by about $150 a month, up about $1,830 from May 1.

How high are interest rates expected to go in 2023?

Here’s what economists from the big four banks are currently predicting for the rest of 2023, and what also could be possible:

CommBank – no more increases for 2023 (prediction made prior to statement by Governor Lowe).
NAB – rates rising to 3.60% by May 2023. However, there’s a risk of a peak towards 4%.
Westpac – rising to 3.85% by May 2023. First rate cut should arrive by March 2024.
ANZ – rising to 3.85% by May 2023, but possibly 4.10% if inflation keeps rising.

Worried about your mortgage? Get in touch

Let’s not beat around the bush here: there are a lot of households around the country really feeling the pinch of all these rate rises.

Similarly, there are a lot of people on fixed-rate home loans wondering just what options will be available to them once their fixed-rate period ends and they have to transition over to a variable rate home loan.

So if you’re concerned about how you might meet your repayments in 2023, give us a call today. The earlier we sit down with you and help you make a plan, the better we can help you over the period ahead.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Considering refinancing your mortgage? Here are some questions to ask

Wed, 01 Feb 2023 22:37:00 GMT

When did you last refinance?

Home loan not up to scratch? Looking for a better rate? Or do you want to unlock equity? Then refinancing could be for you. But there are some important questions to ask first.

If you’re considering refinancing your mortgage, you’re not alone.

With the rising cost of living and interest rates hitting the hip pockets of many Australians, it’s a popular move.

According to ABS data , November 2022 saw refinancing values reach a record high of $13.4 billion.

Refinancing may offer you opportunities to unlock equity, land a better rate and avoid what’s known as “loyalty tax”. Sticking to the same loan could see you missing out on favourable rates and features lenders like to use to woo new customers.

Or maybe you’re about to come off a fixed loan period and are bracing for a potential rate hike.

Whatever your reasons for refinancing, we’ve got some questions to help you through the process.

What’s your financial picture?

Banks want to take a squiz at your financial profile before lending you a chunk of change. So check that your credit score is healthy to avoid disappointment.

Look at your budget to see how much you can afford to pay toward your mortgage.

Include interest, repayments, and service fees. And factor in possible additional refinancing costs such as application and valuation fees.

You can also consider how the length of your loan impacts your budget. A longer-term loan usually comes with lower repayments but more interest over the lifetime of your loan.

A shorter-term loan on the other hand would usually mean you make higher repayments now, but you could save on total interest payments.

Whichever way you’re leaning, we can help you crunch the numbers.

Do you have equity?

Having 20% equity in your home is typically a lender requirement when refinancing.

But what is equity?

It’s the difference between the market value of your property and the balance of your mortgage. And with the recent decline in property values , it’s an important thing to check.

The 20% equity typically acts as a deposit. Not having 20% may mean you have to pay lenders’ mortgage insurance, which may make refinancing not worth your while.

And negative equity – when your mortgage balance exceeds your property’s value – would most likely put the brakes on refinancing plans.

But if you have additional equity you may be able to unlock it when refinancing.

Let’s look at an example – say your house is now worth $1 million. But you bought it for $800,000 a few years back with a $600,000 loan that you’ve paid down to $500,000.

Banks typically allow a loan for 80% of a property’s market value (depending on your financial position and other factors). So if you refinanced your $500,000 loan to an $800,000 loan, that could unlock $300,000 for things like reno projects or investments.

What are you looking for?

Now it’s time to think about what you want from a loan.

A better interest rate is usually top of the list. But what other features could benefit you?

An offset account may be something you want to reduce interest. Or the ability to make additional repayments without incurring penalties.

Depending on what you’re after, you may not need to move to another lender. We can always talk to your current lender first to see if they will come to the party.

If not, we can then explore your options further afield.

Get in touch

Want to refinance to unlock a better interest rate, features and benefits, or equity in your home? Give us a call.

We can help assess your situation to see what’s possible. And locate loans and lenders that are a great fit for you.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Can a job switch affect your mortgage application?

Wed, 25 Jan 2023 22:43:00 GMT

Thinking of switching things up in 2023?

Changing jobs may offer more perks – higher income, greater fulfilment, and the opportunity for growth are often things people look for in a new gig. But could it also impact your mortgage application?

January and February each year is typically prime time for people considering switching jobs – the Christmas holiday period is in the rearview mirror and a new year of possibilities lies ahead.

In fact new LinkedIn research shows 59% of workers are thinking about leaving their job in 2023, with more than half saying they’re confident of finding something better.

Coincidentally, 2023 could also be a good time to start considering your next property purchase, with house prices reaching a record decline of -8.40% in January from the May 2022 peak.

So could a job change impact your mortgage application? The short answer is it could.

But how much of an impact it has depends on a few factors.

Can you still land a mortgage?

Employment histories with frequent job changes over short timeframes can raise lenders’ eyebrows.

But even with a rock-solid employment profile, lenders may view a fresh job change as an added risk.

Lenders love to see stability. Staying in a job and building up your employment and financial profile will improve your mortgage approval chances.

A new job is less stable than one you’ve been in for a long time. There could be probation periods for both you and your employer to see if the role fits.

But you still may be able to land a mortgage with a new job.

Some job changes are low risk, with possibly minor effects on your mortgage application.

And some are high-risk and may result in delays and more hoops to jump through.

Low-impact changes

A change lenders consider less risky is switching to a permanent, salaried role in your current industry.

This is because you have a proven record of holding employment in this field and have the promise of a steady paycheck streaming into your bank account.

Typically, lenders want to see at least two to three of your most recent payslips. Some may require you to have your new job for at least three months.

So as long as you have a good financial profile, meet the requirements, and don’t have an unstable employment history, you may experience minimal impact.

But ultimately this depends on the lender and the loan.

High-impact changes

Considering a complete career overhaul, starting a business, or switching to casual, contract, or freelance work?

These are exciting changes that may result in more fulfilment, flexibility and money, if the stars align.

But while opportunity is on the cards, so too is risk – as far as lenders are concerned.

This is because sometimes to enter a new industry you have to accept lower-paying roles. Or because it can take some time to thrive in a new industry or business.

Similarly, casual work (and similar) often has higher pay rates. But part of this is to offset the lack of benefits you may receive, such as job security, severance pay and sick leave.

Suffice to say, all these types of job changes may make the mortgage application process more difficult.

However, there could be lenders who will consider your application if your financial profile is otherwise hunky dory and your previous employment history is stable.

Lenders may want to see more than the typical two to three payslips. Some may also require you to be employed in your new role for at least three to six months.

And self-employed applicants typically need to show at least a year’s worth of business income records.

These added requirements may result in a need to delay applying for a mortgage for a little while.

Find out more

Switching up your employment and landing a mortgage can be tricky. But having a helping hand can make the process easier.

We can point you in the direction of lenders more likely to consider your situation and help put together an application that presents your situation in the best possible light.

So if both a career change and a new property are on the cards for you in 2023, give us a call today.

Planning a reno in 2023? Here are 4 tips for smooth sailing

Fri, 20 Jan 2023 00:04:00 GMT

Do it once, do it right

Having a spruced-up home feels great. And it can also boost your home’s value. But, as exciting as the prospect of rolling up your sleeves and getting on with a reno can be, there are certainly pitfalls to avoid.

New year, new you, new reno?

Renovating is exciting. Having aesthetics and function on point can make your home feel new again. And possibly add to its value should you want to sell or refinance.

But we’ve all heard reno horror stories: shonky tradies, budget blowouts and permit nightmares, not to mention the recent supply chain disruptions.

So we’ve compiled some tips to help you avoid these perils (and associated headaches!).

1. Prepare and plan

As Benjamin Franklin said, “if you fail to plan you’re planning to fail”. Bit harsh, but it rings true. Especially for a reno.

It’s a good idea to keep organised with a to-do list and a timeline.

You’ll need to check for council restrictions and permit requirements. Ignoring this could mean hefty fines. Or having to tear down your hard work (it does happen!).

Contracts should be set in place with tradies, the correct materials purchased, and a budget set … you’ll have a lot on your plate.

2. Research tradies

It’s a no-brainer that a reputable and skilled tradie will most likely provide better outcomes. But they usually come with a higher price tag.

The temptation to hire that cheap as chips mate of a mate is real.

But it’s important to hire licenced tradies. Most state fair trading websites offer a free online service for you to check.

Not doing so runs the risk of fines, shoddy work and costly re-dos. And the work of an unlicenced tradie most likely won’t be covered by insurance.

Also, be sure to check out any reviews and examples of their work.

3. Budget and a buffer

Having a budget is an important step. You need to be realistic about how much your project is going to cost and whether you can afford it.

It’s also wise to have a contingency.

Unexpected costs can really add up – just ask anyone who has completed a reno. Being prepared with a buffer can give you peace of mind to forge ahead in the face of surprises.

Also, having a broker like us on your side can help make funding your reno more straightforward.

We’ll help you explore your financing options, which might include unlocking the equity in your home to fund your reno or any added costs.

Not only can we help you find a competitive rate. We can also track down flexible loans, such as a line of credit, to help cover any unforeseen costs that crop up.

4. Be flexible

To get a reno done, it’s best to be flexible.

It’s not unheard of to uncover issues during a reno – such as structural problems, water damage, asbestos and faulty wiring – which require you to deviate from your original plans and budget.

The building industry is also facing supply chain disruption due to recent world events, including the COVID-19 pandemic and the war in Ukraine.

As a result, wait times and costs are blowing out for some materials and so a specific item you had your heart set on may need to be replaced with an alternative.

But by being flexible – including having a flexible line of credit – you can adapt and move forward with your reno.

Get in touch

We know a thing or two about financing a reno.

Our team can find flexible loan options, lines of credit and competitive rates to suit you. And if you’ve got equity in your home, we can help you unlock it.

So if you’d like to find out more, get in touch today. We’re ready to help make your 2023 reno dreams a reality.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Get a financial head start on the school year

Wed, 11 Jan 2023 23:45:00 GMT

Time to refinance your mortgage?

Finding the time to delve into your finances can be a struggle. But the school holidays can offer the perfect time, especially for teachers. Get cracking on your financial to-do list these holidays by looking into refinancing your mortgage.

Planning on giving your finances a boost by refinancing your mortgage?

Well, you’re not alone. Following a string of rate rises last year, borrowers are refinancing in record numbers, according to PEXA research .

And ABS finance and wealth spokesperson, Katherine Keenan, says recent data shows owner-occupier refinancing with different lenders remained at record levels in 2022 , above $12 billion.

For many, mortgage repayments take the biggest chunk of the household budget which has become increasingly stretched by the rising cost of living.

So, the school holidays could provide some spare time to give your mortgage a thorough look over.

We’ll fill you in on why it may be a good idea to refinance your mortgage, what to look out for, and how you can get a helping hand.

Why refinance?

If it’s been a while since you’ve revisited your mortgage, you could be paying a higher interest rate than you need to. This is commonly known as the loyalty tax.

Lenders like to offer all the bells, whistles, and better rates to new customers in a bid to get their business.

Since they’ve already won you over, you often don’t get invited to the party.

But by refinancing, you could have lenders offering sweet new customer deals to woo you.

And if your fixed-rate mortgage good times are about to stop rolling, you too could get in on the new customer woo-fest and shop around for a better interest rate.

With the right offer, it can really pay off – refinancers saved on average $1,524 per year, according to 2022 PEXA data .

Over three years, that adds up to an extra $4,572 in your pocket for renovations, savings, extra repayments, or whatever you like.

And you don’t always need to move to another lender to see savings. You could refinance or negotiate with your existing lender, depending on their policy.

They may be open to offering you a deal to keep you on as a customer.

Ditch the hassle

If you’d like to find out more about refinancing, get in touch today.

We know all the ins and outs of refinancing and can shop around to find the most suitable loans for you.

So let us do the legwork on your refinancing goals these holidays so you can maximise your R&R.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

What you should know about buying a tenanted investment property

Wed, 04 Jan 2023 23:04:00 GMT

Thinking about purchasing a tenanted property?

Buying a rental property is a popular way to invest. But where do you stand if the property you’re eyeing off already has a tenant? We’ll fill you in on what you need to know.

So you’re primed to expand your financial horizons and want to buy an investment property?

2023 may provide promise, with double-digit percentage gains for rental returns predicted in 11 out of the 14 major Australian residential markets.

But what happens if the property you want to buy already has tenants?

Depending on your plans, this could be a major boon. With tenants in place, the rental income can roll in from day dot!

But if you want to make changes to the property or the tenancy agreement … things get more complex.

So without further ado, here are the ins and outs of buying a tenanted investment property.

Know your tenants

When you’re buying an occupied property, it’s wise to learn about the tenants.

If the rental history shows you’ve got stellar tenants, that’s super!

You can have rent coming in straight off the bat – all without the need to advertise or wade through applications.

But if the rental history is a grim read, you can’t just switch tenants on a whim.

As the landlord, you’re obligated to honour the existing lease. There is state and territory government legislation you’ll need to adhere to as an owner, with certain processes and procedures to follow if you want to go down the road of ending a tenancy.

What’s the property’s condition?

Be thorough in investigating the condition of the property and ask if there are outstanding maintenance requests. This can help you avoid unexpected costs.

As the owner, you’re responsible for ponying up for most repairs. You need to ensure the property is maintained in a timely fashion as per the tenancy agreement.

So if there’s a laundry list of things to be fixed, you‘ll want to budget for it.

What if I want to make changes?

You’re obligated to honour the term of the existing lease. That means if you want to make changes to the tenancy agreement (like increasing the rent amount), you’ll need to wait.

Say you want to make non-routine renos to your property during the lease period – that’s possible, but you’ll have to negotiate with your tenants.

Extensive renos could affect their enjoyment of the property, which may mean they reject your request to carry out the works and you have to wait until their lease expires.

Ultimately, the only way you can make changes while the lease is in place is through mutual agreement with your tenants.

Property management

A good property manager will fill you in on your obligations and maintain the smooth running of the tenancy.

If you like the way things have been handled, you can choose to stick with the existing manager.

But if you want to change, you can. You’ll most likely have to provide a period of notice to the property manager. The duration depends on which state or territory your property is located in.

Alternatively, you can manage the tenancy yourself. Just be sure you’re across all the legislation.

Property management can be a demanding job, so make sure you know what you’re getting yourself into before taking it on!

Get in touch

Ready to jump into property investment? Get in touch today!

We can help you navigate the process by finding suitable loans, unlocking existing equity and working out your borrowing power.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

4 New Year’s resolutions for financial fitness

Sat, 31 Dec 2022 22:57:00 GMT

What’s your 2023 New Year’s resolution?

As the sun rises on January 1, many Australians will be getting started on their new year’s pacts. The gym will be full of determined resolution keepers; the pavement pounded by brand-new sneakers. But what about shaping up your finances?

There’s no denying 2022 was a tough year for many mortgage holders – with eight rate rises since the start of May – and unfortunately 2023 is tipped to bring more rate increases.

But by kicking off the year with a few tweaks to your budget and habits you could be in a much better position to ride out future hikes.

Here are 4 simple new year’s resolutions that can help keep your finances fighting fit.

1. Time to ditch unnecessary expenses?

The 2022 rate rises had a lot of us trimming back our budgets. But expenses can creep back in. Before you know it, those “free trials” you forgot to cancel become paid monthly subscriptions.

It’s good to get into the habit of conducting regular expense audits – cut down on streaming services, take-away meals and impulse purchases to make savings.

That said, you don’t have to become an extreme penny-pincher. Little tweaks here and there can add up.

For example, a daily $4 take-away coffee habit costs you $1460 per year! But switching to a DIY French press brew can cost just $260-$400.

2. Have you got an emergency buffer fund?

The last few years have taught us to expect the unexpected. Having money tucked away for emergencies, or more rate rises, can give you added peace of mind.

You can use unlocked savings from your expense audit to start building up an emergency buffer.

And consider adding even more to this fund by selling any unused or unwanted items on ebay or Gumtree.

That way, if rates go up further, you lose your job, or have unforeseen medical expenses, you’ll have the funds on hand.

And you can get rid of some clutter in the process. It’s a win-win!

3. Do you need to pay down a debt?

Christmas is a time many of us cut a little loose on our spending (and fair enough!). But it’s also important to make sure you pay off any debts quickly.

Now may be a good time to either start paying back any money owed on credit cards, get ahead on your mortgage (if you’re able to), or vanquish any other debts you might have.

Also, consider avoiding credit card or buy now pay later purchases if possible. If you forget to pay these on time, you could incur interest and/or late fees.

You may also find that quickly reducing debt tastes sweeter than a take-away mochaccino. And your credit score might thank you for it too, which can make purchasing your first home, new property, or refinancing that little bit easier.

4. When did you last review your home loan?

Last but not least, if you’ve had your home loan for a while, you could be paying something called “the loyalty tax”.

This is where lenders don’t pass on new borrower rates to existing customers.

An RBA study found that compared to new loans, borrowers are charged an average of 40 basis points higher interest for loans written four years ago.

Arranging regular home loan health checks can potentially uncover opportunities for savings.

Not only could you secure a lower interest rate, but you could refinance to a mortgage with other features that may be a better fit for your circumstances – such as an offset account, fixed period, or a linked debit card (to name a few).

To get started on your home loan health check and prepare for whatever 2023 throws at you, get in touch.

We’ll look at your financial footing, your mortgage, and the market to scope out suitable loan products and potential savings.

Seasons greetings! Here’s to a happy and prosperous 2023

Thu, 22 Dec 2022 00:51:00 GMT

Merry Christmas and happy new year!

End-of-year festivities have snuck up on us! Wishing you and yours a swell Noel and a wonderful new year.

It’s time to dust off that kitsch Christmas t-shirt, deck the halls, and give Bing Crosby a spin.

We hope you have the happiest of holidays and a cracking 2023.

As we all bid adieu to 2022, it’s a great time to reflect on the year past. And to dream up plans for the year ahead.

This year had a few challenges for us all (hello rate rises). So we hope you get to enjoy some well-earned rest, and all the merriment the season has to offer.

We are truly grateful to you, our fabulous clients, for your ongoing support and loyalty. May 2023 bring you opportunities to flourish and thrive.

If you’d like to get the ball rolling on those 2023 financial goals, get in touch. We’d love to help you make them happen!

First home buyer numbers have halved: is it time to swoop in?

Thu, 15 Dec 2022 21:59:00 GMT

They say the early bird gets the worm

Repeated cash rate hikes have put many first home buyer plans on hold. So could you swoop in and reap the benefits with less competition in the market?

In case you missed it, from May to December the RBA lifted the cash rate from 0.10% to 3.10%.

This has no doubt hit many mortgage holders hard, but it’s also pumped the brakes on the number of first home buyers looking to enter the property market.

In fact, current Australian Bureau of Statistics data shows that the number of first-home buyers fell 3.2% to 8,576 in October alone.

That’s almost half the 16,187 first home buyers who entered the market during the January 2021 peak.

So, if you’re looking to buy, how can this benefit you?

Let’s take a look.

Less competition and more bargaining power

From mid-2020 to the end of 2021 we saw a house buying frenzy. And house hunters who were unable to compete had to make do with the leftovers.

But fewer buyers on the market means there’s less of a chance you’ll have to duke it out for your chosen property.

There could also be more favourable homes for you to choose from, without the overcrowded open houses.

And with fewer buyers making offers, sellers could have concerns about offloading their property.

November 2022 CoreLogic data shows the median days a property sits on the market is 35, compared to just 20 days in 2021.

So, if you’ve got your financial ducks in a row and are prepared to negotiate … flex that bargaining power and try for a great price.

Softening property prices

High demand in recent years saw property reach eye-watering prices. But over the past three months there’s been a decline around most parts of the country (barring regional South Australia and regional Western Australia).

In fact, national data has shown the biggest annual decline in home values since 2019 , with a 3.2% drop over the past year.

In some instances, it could be cheaper to buy than rent. National median weekly rental prices rose by 4.3% in September this year – a record-breaking price hike.

And a recent analysis found that for 518 Australian suburbs, home loan payments were more affordable than renting.

Escaping the rent crunch and buying your first home in an opportune area could be a smooth move if your finances are in decent shape.

And you might want to get the ball rolling sooner rather than later.

That’s because prices could go up again as early as next year if the RBA pauses rate rises and inflation drops, according to SQM Research’s Housing Boom and Bust Report for 2023 .

Government schemes for savings

Taking advantage of government incentives puts the keys in first home buyers’ hands 4 to 4.5 years quicker , on average.

Giving lenders mortgage insurance the big swerve, paired with a low deposit of 5%, is an enticing deal.

And if you’re eligible, that’s what the government’s First Home Guarantee can offer.

Spots are limited though and have historically been snapped up quickly.

But with fewer first home buyers entering the market, you may have more of a chance of nabbing a spot in the scheme.

Find out more

So, if you’re ready to make the big leap toward home ownership, give us a call.

We’ve got the know-how to help you work out your borrowing capacity and your mortgage options.

We’ll take the confusion out of financing your new home, so you can get on with swooping in on the house of your dreams.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Are we there yet? RBA hikes cash rate for eighth straight month to 3.10%

Tue, 06 Dec 2022 04:57:00 GMT

At least it’s the last rate hike until at least February

The Reserve Bank of Australia (RBA) has driven the cash rate up by another 25 basis points to 3.10%. Find out how much this final cash rate hike of the year has increased your mortgage repayments in 2022, and what you can expect in 2023.

The good news? This is it. You can head into the summer holidays knowing this is the last rate rise until at least February when the RBA board will meet again (thankfully they take January off!).

The cash rate now sits at 3.10% following eight months of consecutive rate hikes.

RBA Governor Philip Lowe said in a statement the RBA board expects to increase interest rates further over the period ahead, but it is not on a pre-set course.

“Inflation in Australia is too high, at 6.9% over the year to October,” said Governor Lowe.

“There has been a substantial cumulative increase in interest rates since May. This has been necessary to ensure that the current period of high inflation is only temporary.

“High inflation damages our economy and makes life more difficult for people.”

So how much have your mortgage repayments gone up in 2022?

Unless you’re on a fixed-rate mortgage, the banks will likely follow the RBA’s lead and increase the interest rate on your variable home loan soon.

Let’s say you’re an owner-occupier with a 25-year loan of $500,000 paying principal and interest.

This month’s 25 basis point increase means your monthly repayments could increase by almost $75 a month. That’s an extra $835 a month on your mortgage compared to May 1.

If you have a $750,000 loan, repayments will likely increase by about $110 a month, up $1250 from May 1.

Meanwhile, a $1 million loan will increase almost $150 a month, up about $1,680 from May 1.

How high are interest rates expected to go in 2023?

Here’s what economists from the big four banks are predicting in 2023:

CommBank – no increases in 2023. Dropping to 2.60% by December 2023.
NAB – rising to 3.60% by May 2023 and then staying steady.
Westpac – rising to 3.85% by May 2023, then dropping to 2.85% by November 2024.
ANZ – rising to 3.85% by May 2023, then dropping to 3.50% by November 2024.

Worried about your mortgage? Get in touch

If you’re starting to feel the pinch and are worried about what interest rate rises might mean for your budget in 2023, feel free to contact us today.

Some options we can help you explore include refinancing (which could include increasing the length of your loan to decrease monthly repayments), debt consolidation, or building up a bit of a buffer in an offset account ahead of more rate hikes.

So don’t spend the holiday season sweating on next year’s mortgage repayments – get in touch now so we can work out a plan together.

Where there’s a will (and genuine savings), there’s a way

Thu, 01 Dec 2022 02:45:00 GMT

Is an inheritance enough?

Inheritances can be a bittersweet part of life. But an inheritance alone won’t always cut it when applying for a home loan. Having genuine savings can help show lenders you’ve got what it takes to meet mortgage repayments.

With many older Australians having accumulated a decent amount of wealth throughout their years, it’s not uncommon for some of their younger family members to receive a leg-up into the property market when they pass away.

But an inheritance alone won’t always cut it to land a home loan.

In addition, you may be expected to show proof of genuine savings. This says “hey, I can put money aside to meet repayments” – which is music to a lender’s ears.

So today we’ll break down what may or may not be considered genuine savings, and how you could use your inheritance towards a home loan.

What counts as genuine savings?

Genuine savings are funds that show off your saving prowess.

Lenders typically look for genuine savings that amount to 5% of the property purchase price. They also like to see that these savings have been held or accumulated for a minimum of three months.

Here are some examples of commonly accepted genuine savings:

– Regular deposits into a savings account over a three month period.
– Term deposits held for at least three months.
– Shares or managed funds held for at least three months.
– A deposit paid to a real estate agent, builder or developer that was originally in your savings account prior to being paid.

Some lenders may also accept your rental payment history as genuine savings.

And some may accept equity in existing property, bonuses, cash gifts, and even your inheritance as long as it has been held in your account for at least three months.

But then again … some may not.

Genuine savings policies often differ between lenders. So it’s important to know just what will be accepted by your lender of choice – and we can help with that.

What doesn’t count as genuine savings?

So now we know what may be accepted. Here are examples of funds that lenders commonly don’t consider:

– Gift from parents or family.
– First Home Owner’s Grant (FHOG).
– Borrowed funds (for example money taken from a personal loan).
– Money from selling assets (for example selling a car or furniture to raise cash).
– Tax refunds.
– And today’s topic … inheritance.

But ultimately, it depends on the policy of the lender you’re applying with, because some of these examples (such as your inheritance) may be accepted under certain circumstances.

How can I use my inheritance to buy a home?

Some lenders will allow you to use your inheritance towards genuine savings … but with caveats.

They’ll need proof that the money is in fact yours.

Your lender may ask you for a letter of validation from the executor of the will. They may want to see a copy of the will and grant probate (which proves it’s legally binding).

They’ll also want proof the amount has been deposited into your bank account. Or, they’ll want proof from the executor (or a solicitor) showing you have legal access to the money.

And finally, some lenders require you to hold the funds in your bank account for a minimum of three months before they’ll count your inheritance as genuine savings.

It’s important to get clear on the requirements of your lender of choice.

This brings us to our next point …

Give us a call

If you’re looking to use your inheritance for a home loan, give us a call.

With different home loan policies for different lenders, it can be confusing.

We can help you work out who accepts what for genuine savings. And show you which lenders are willing to work with your inheritance, so you can make the most of it.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Hold your horses: RBA hikes cash rate again to 2.85%

Fri, 25 Nov 2022 01:19:00 GMT

It’s the seventh rate hike in a row

Whoa, Nelly! The Reserve Bank of Australia (RBA) has lifted the official cash rate again, this time by another 25 basis points to 2.85%. How much will this rate rise increase your monthly mortgage repayments, and when are the hikes expected to stop?

Dubbed the “rate that stops the nation”, today’s Melbourne Cup RBA board meeting did not see board members rein in the rate rises.

Back in May the official cash rate was just 0.10%. Today it was increased for the seventh straight month to 2.85%.

RBA Governor Philip Lowe said in a statement that the RBA board expected to increase interest rates further over the period ahead.

“The size and timing of future interest rate increases will continue to be determined by the incoming data and the Board’s assessment of the outlook for inflation and the labour market,” said Governor Lowe.

“The board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.”

How much extra will your mortgage be each month?

Unless you’re on a fixed-rate mortgage, the banks will likely follow the RBA’s lead and increase the interest rate on your variable home loan soon.

Let’s say you’re an owner-occupier with a 25-year loan of $500,000 paying principal and interest.

This month’s 25 basis point increase means your monthly repayments could increase by almost $75 a month. That’s an extra $760 on your mortgage compared to May 1.

If you have a $750,000 loan, repayments will likely increase by about $110 a month, up $1140 from May 1.

Meanwhile, a $1 million loan will increase almost $150 a month, up almost $1,530 from May 1.

So how many rate hikes have we got left?

The good news is that most economists believe we’re through the bulk of the rate rises, and they could stop as early as next month.

Here’s what economists from the big four banks are predicting:

CommBank – one rate rise to go, peaking at 3.10% in December 2022.
NAB – three rate rises to go, peaking at 3.60% in March 2023.
Westpac – three rate rises to go, peaking at 3.85% in March 2023.
ANZ – three rate rises to go, peaking at 3.85% in May 2023.

Worried about your mortgage? Get in touch

If you’re starting to feel the pinch and are worried about what interest rate rises might mean for your monthly budget, feel free to contact us today.

So if you’re concerned about how you might meet your repayments in the months ahead, give us a call today. We’d love to sit down with you and help you work out a plan moving forward.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Your new phone or your home loan? What would you research more?

Fri, 25 Nov 2022 01:19:00 GMT

The benefits of using a broker

What’s more important: your new phone or your next home loan? Well, we were stunned to see a recent survey that showed Australians put more effort into researching phone plans than they did their home loan. Here’s how we can help you get the balance right.

More than 70% of Australians say they’re more likely to spend time looking at options for phone and internet plans, car insurance and even electronics purchases, than researching a home loan – according to a recent Pepper Money survey .

And look, we get it.

Selfies, Netflix, Uber Eats, Instagram, Tinder … phones are pretty damn nifty.

Home loans? Admittedly, not so much.

But that’s no excuse to cut corners when it comes to making what could be the biggest financial decision of your life.

By allowing yourself to get so daunted that you just go with the bank you’ve had a savings account with for years, you could potentially lock yourself into a lemon of a loan.

So today we’ll explore why 7-in-10 Australians now use a broker to help them choose the right home loan for them – and why 86% say they’d use a broker again .

1. Save time and money

Applying for a home loan can be a full-time job in itself. The research, piles of paperwork, back-and-forth queries and requests …

With busy modern lives, finding the time can be tough.

A broker can save you time by doing the legwork and comparisons for you. We use our industry knowledge and connections to find suitable home loans with competitive rates.

We’re also aware of the type of additional fees and costs that some loans may have. And this could potentially save you money.

2. Target suitable lenders

A broker can assess your situation and point you in the direction of lenders who may be more likely to say yes.

For example, say you’re working as a casual or are self-employed. There are some banks out there who don’t really favour these kinds of employment arrangements.

However, mortgage brokers have access to a wider range of options and can put forward several potential lenders who are more likely to consider your application.

This targeted approach is important because submitting too many applications can hurt your chances of loan approval.

Each time you apply for a loan, your credit history is pinged. And too many hits on your credit score can lead to lenders seeing you as risky, potentially reducing your options. A broker will take this into account.

3. Expert guidance

What’s my borrowing power? How do I fill out an expense report? What documents do I need?

The application process can be a lot, especially when you’re busy. And the financial wizardry and jargon involved can be downright confusing.

But a broker can provide you with expert guidance.

We’ll look after the application process for you and help you organise your finances and prepare the documentation you’ll need.

You’ll also (hopefully) only have to supply that documentation once, rather than over and over again with different lenders.

Get in touch

So if you’re ready to find a mortgage and streamline the process, it’s time to put that all-important phone to use and give us a call.

We can help you get your ducks in a row and use our expert knowledge and experience to line up with the right kind of loan for you.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

5 surprising reasons for home loan heartbreak

Wed, 16 Nov 2022 23:18:00 GMT

No one likes getting rejected

Whether it’s your love life or your home loan application, no one likes getting rejected. There are many reasons why it could happen, and some can come as a big shock. So today we’ve outlined five surprising reasons to help you avoid home loan heartbreak.

There are few words would-be home buyers dread more than: “your home loan application has been rejected”.

It can feel like a real kick in the guts. And some of the reasons can be surprising.

A rejected loan application can hold up your home-buying plans and could have a negative effect on your credit score. So it can be important to avoid this scenario.

Below we’ve outlined five reasons your next application could be rejected – so you can start heading them off now.

1. Spending too much or too little

Most people know that spending too much is a major red flag for lenders. So limiting your unnecessary expenses is important.

But drastically slashing costs and living a very meagre existence can also be a concern.

Lenders can see this as unrealistic and unsustainable, and they can remedy it during assessment by applying the household expenditure measure (HEM) instead.

HEM is a standardised benchmark used to estimate annual living expenses. And if your standard, reasonable budget is on the super savvy frugal side, there’s a chance HEM may be higher.

2. Credit cards

Having multiple credit cards and performing several balance transfers can affect your application.

Every time you apply for credit an inquiry is logged on your credit history. And lenders will likely take notice.

Even your “just in case” credit card can have an impact. You may need to prove you have the means to pay off the limit within three years, even if the balance is $0.

3. By now pay later services

‘Tis the season for shopping. And buy now pay later (BNPL) schemes will be rolling out the red carpet.

But it might be worth resisting the temptation.

The Australian Prudential Regulation Authority (APRA) amended its framework this year to include BNPL debts in the reporting of debt-to-income (DTI) ratios.

Lenders will likely include BNPL debt in your DTI ratio to see your total debt in relation to your income. And a high DTI can result in limited borrowing capacity or even rejection.

4. Credit history

Your credit history is a finicky thing.

Even a few late payments can cause your credit score to drop. So it’s important to make sure your bills are paid on time.

Also, applying for too many credit cards or other loans can impact your credit score, and therefore your home loan application.

And with increasing news of scams, data breaches, and identity theft … it’s a good idea to check your credit history health.

You can request a free credit report once a year from one of three national credit reporting bodies which are listed on this government website .

5. Your type of income

Your type of income could make or break your application.

Lenders typically favour traditionally employed applicants with a steady and reliable income.

Many lenders consider self-employment carries a greater risk for less consistent income, and some can reject applications on these grounds.

So if you’re self-employed, when applying for a home loan it’s important to target lenders who are more open to lending to small business owners (we can give you the down-low on this).

Also, word on the street is that tax debt is increasingly becoming an issue for self-employed applicants. So if you have a large tax debt, it might be worth getting on top of that if you can.

Get in touch

If you’re not the kind of person who likes being rejected, well, the good news is that we’re not the rejecting type.

We’d love to have a chat about your home-buying dreams to see if we can match you with the right loan and lender for you.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Buying could be cheaper than renting for a third of properties

Wed, 09 Nov 2022 22:20:00 GMT

Once you get your foot in the door, that is

For many Australians, rate hikes and inflation have made the dream of property ownership feel ever more distant. But a recent analysis shows that meeting mortgage repayments could actually be cheaper than renting for more than a third of Australian properties.

Look, we get it. Often the biggest obstacle in the way of home ownership is saving up for a deposit.

But once you’ve got that sorted – which we’ll help you tackle below – a recent CoreLogic analysis found servicing a mortgage was more affordable than average rent prices in 518 Australian suburbs. In fact, in some areas there were savings of over $900 a month .

Not to mention that with rental prices surging by about 10% across Australia over the past year and vacancy rates at a record low 1.1%, home ownership has possibly never looked more appealing!

So we’ve got some tips to help you switch from renter to homeowner in a timely (and confident) way.

Take advantage of the buyer’s market

Buying now or in the near future could mean less competition for properties, price drops and sellers willing to negotiate.

And recent rate hikes mean that, even during the spring selling season, we’re seeing fewer buyers. In fact data shows the median number of days that properties sit on the market is now 35 , compared to 20 days last year.

And in response, property prices are falling. September data showed a 1.4% drop.

So by shopping around in the right areas and putting your negotiator hat on, you may get a price that could make buying cheaper than renting.

And most importantly, buying property and making mortgage repayments can create equity for you … instead of your landlord.

Get in on government schemes

There’s no denying that saving a big enough deposit to buy can be a bit of a slog.

But what if there was a way to sidestep the standard 20% deposit? And possibly avoid stamp duty too?

There are a number of government schemes you may be eligible for that can fast-track house buying by an average of 4 to 4.5 years .

The federal government offers low deposit, no LMI loans for eligible first home buyers , single parents and regional first home buyers .

Also, all state governments (except South Australia) have first home buyer stamp duty concessions for those eligible.

And you can stack these schemes together for more bang for your buck.

But you’ll have to move quickly on the no LMI schemes – they’re allocated on a first-come, first-served basis every financial year.

Give us a bell

Keen to make the leap from renter to home owner? If so, you’ll be busy researching the market and learning the art of the deal – so why not get a helping hand with your finances?

We can help find the right loan for you and provide you with helpful guidance that could increase your chances of mortgage application success.

And while we’re at it, we can assist you in applying for any money-saving government incentives you may be eligible for.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

With property prices dropping, is now the time to refinance?

Wed, 26 Oct 2022 22:47:00 GMT

Let’s talk refinancing and equity

You may have heard that property values are on the decline. But what does this mean if you’re planning to refinance? We’ll discuss how falling housing prices may affect your refinancing application and what you can do about it.

With the rising cost of living and climbing interest rates, you may be looking to refinance your mortgage.

Depending on your circumstances, it can be a great way to get a better interest rate on your loan.

Not to mention that if you need access to funds for an investment property or renovation, refinancing can allow you to cash out equity in your home to use for other purposes.

But, according to CoreLogic , 79.5% of house and unit market values are on the decline across Australia. And this can affect refinancing outcomes.

We’ll walk you through just what the effects of a property value drop can mean for refinancers and how you can take action now to get ahead of the curve.

Refinancing and your property’s value

Rising rates have contributed to declining property values in some areas around the country.

For example, Sydney property prices have declined 10% since they peaked in February this year, according to the latest CoreLogic data , and many economists believe they’ll fall even further.

And as a homeowner, a drop in property value can affect your equity.

That’s because equity is the difference between your property’s (market) value and your mortgage balance. And it’s a number that lenders pay attention to when assessing refinancing applications.

Refinancing before your equity drops may see your refinancing application have a greater chance of success.

You see, most lenders will typically require you to have 20% equity in your home to refinance, which essentially serves as a deposit.

And according to this graph here , if you’ve bought a house in Sydney (for example) since June 2021, due to the recent property price declines you soon may no longer have 20% equity in your home.

If you don’t have 20% equity, you could still refinance by paying lenders mortgage insurance – but that would likely defeat the purpose of refinancing in the first place.

And if you fall into negative equity – where your home’s value drops below your mortgage balance – then refinancing most likely won’t be on the cards at all and you’ll be stuck with your current lender.

So, if you’re interested in refinancing your loan to get a better rate, sooner may be better than later … depending on how your property value is fairing.

Refinancing to cash-out equity

If you’re keen to unlock some equity – you’re not alone!

According to NAB research , seven in 10 mortgage holders recently cashed out equity while property prices were high and used the money to renovate, invest in property or shares, or boost their superannuation

So how does cashing out equity work?

Let’s say you bought an $800,000 house five years ago that is now worth $1 million.

And let’s also say you took out a $600,000 loan for that house, which you’ve managed to pay down to $500,000 (you little beauty!).

By refinancing that $500,000 loan into an $800,000 loan (banks will typically let you borrow up to 80% of a property’s market value), you can unlock $300,000 in equity.

However, if you delay a year or so, and national property prices decline 10% over this period, your house might only be valued at $900,000.

That would mean if you wanted to unlock 80% of your property’s market value, you could only refinance your $500,000 mortgage into a $720,000 loan – and therefore only unlock $220,000 in equity.

Get in touch

If you’ve been considering refinancing lately, contact us to find out more. Whether you’re looking to land a better rate or unlock equity in your home, we can help you with all the particulars.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Is now a good time to buy an investment property?

Wed, 19 Oct 2022 21:39:00 GMT

Decisions, decisions…

You’ve bought a home. And now you might be considering adding an investment property to your portfolio. But have recent interest rate hikes cooled your heels?

We’ve outlined reasons why now may still be a good time to buy.

To buy or not to buy, that is the question.

There’s no denying that rolling rate rises might have some sections of the media spouting doom and gloom.

After all, national property prices have dipped and higher interest rates can lower your borrowing power.

However, if you’re in a position to buy now, the current climate can provide less competition and more power to negotiate a good price.

Also, rental tenancy vacancy rates have reached record lows , meaning the demand for rentals is high.

So if you’re ready to dip your toe into property investment, we’ve outlined below why it could be a good time to do so.

It’s a buyer’s market

With rising interest rates and inflation, there’s been a softening of the market and this may reward those who are ready to buy now.

CoreLogic data shows there are fewer buyers at present, and properties are increasingly sitting on the market.

In the three months to September, median days on the market increased to 35 days. That’s a big increase from a median of 20 days in November 2021.

Fewer buyers can mean more property options for you to choose from and less competition when putting in an offer.

And by targeting properties that have been on the market for a while, you could potentially have more bargaining power (just be sure to do your due diligence!).

Low rental tenancy vacancy rates

Currently, there is a high demand for rental properties across Australia.

At 0.9%, the current national rental tenancy vacancy rate is the lowest it has been since 2006, according to SQM Research .

That means the likelihood of your investment property sitting empty now is low.

People are looking for solid rental properties. And if you’ve got just the thing, your investment property could have a number of good tenants putting in applications.

Flexibility around location

When purchasing an investment property, you’re not locked into buying in your home state or city.

You can set your sights further afield to make the most of what the current property market has to offer.

You can look to buy in areas where property prices have already dipped and leverage the current buyer’s market to negotiate. Also, consider purchasing in an area with a healthy demand for rental properties.

That way, you can make a financially sound purchase and increase the chances of having a good tenant in your property sooner.

Possible lower cost of entry than for owner-occupiers

You’re most likely more discerning when shopping for a property you want to live in – we all have personal preferences we want met.

And unfortunately, lists of non-negotiable bells and whistles usually come with primo pricing.

But when buying an investment property, you can be more flexible, which can open up more affordable options.

Look for the essentials that tenants want, such as a safe, comfortable, and low-maintenance property. And with lower competition now, there could be more viable properties to choose from.

The french door, olympic-sized pool, and ocean-view wish list that usually blows up budgets need not apply.

Give us a call

If you’re ready to dive into property investment, come and talk to us.

We can walk you through what you need to consider when it comes to your finances, such as your borrowing power, unlocking the equity in an existing property, finding the right loan, and much, much, more.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Why you might want to refinance sooner rather than later

Thu, 13 Oct 2022 01:34:00 GMT

Here’s why homeowners are refinancing in record numbers

Thinking about refinancing? As interest rates rise, so do the hurdles you need to clear. Here’s why you might want to look at refinancing soon to avoid potentially missing out.

When was the last time you refinanced?

If the answer is “never”, or you can’t actually remember, there’s a good chance you’re paying a higher interest rate than you could be due to the “loyalty tax”.

You see, the banks don’t think you’re paying attention, and as such, they only offer their lowest rates to new customers in a bid to win them over – as proven by the RBA .

In fact, a recent RateCity analysis found that customers who stay loyal to their bank could be hit with an extra $5,101 in interest over the next three years alone (based on a $500,000 loan taken out with CBA in 2019).

For a $750,000 loan that would be an extra $7,652 in interest, and for a $1 million loan it’s $10,202 extra.

This is a big reason why owner-occupier refinancing across the country rose 9.7% in June to a new record high of $12.7 billion, according to the Australian Bureau of Statistics .

Great. But why is refinancing now so important?

Ok, so when you refinance, your new lender must assess something called your “home loan serviceability”.

Basically, that’s your ability to meet your home loan repayments at an interest rate that’s at least 3% above the rate you’re being offered.

And as you might have seen on the news, the big four banks are tipping the RBA’s official cash rate to increase from 1.85% in August to anywhere between 2.60% (Commbank forecast) and 3.35% (ANZ forecast) by November.

That means as interest rates go up, so too will the hurdle you’ll need to clear for home loan serviceability when refinancing.

All in all, that means the sooner you refinance, the lower the hurdle you’ll need to clear to ensure you’re not stuck with your current rate and lender.

How to explore your refinancing options

This is the easy bit! Simply get in touch today and we’ll help you get the ball rolling.

And even if you don’t want to refinance with another lender, there’s always the option of asking your current lender to review your rate, indicating that you’re prepared to refinance if they don’t come to the table.

After all, loyalty should be a two-way street!

So if you’d like to find out more about what options are available to you, give us a call or flick us an email today – we want to help you through the period ahead as much as we possibly can!

Keep calm and carry on: 5 ways you can absorb interest rate rises

Thu, 13 Oct 2022 01:34:00 GMT

Don’t panic, here’s how to plan ahead

We’ve seen interest rates bounce back up over the past three months, and most economists are predicting more increases to come. If you’re starting to worry about your finances, rest assured there are several steps you can take now to get on the front foot.

The days of ultra-low interest rates are officially over (it was nice while it lasted!).

And while all the talk of doom and gloom you see in the media about rapidly rising interest rates can be a bit spooky, now’s not the time to panic.

Check out this Reserve Bank of Australia (RBA) graph here , for example. It shows interest rates are currently lower (as of July 2022) than they ever were prior to May 2019.

So the current cash rate is nothing extraordinary – although it might come as a shock to newer borrowers, as we previously hadn’t had a cash rate hike since November 2010.

Still, there’s no denying that some households are starting to feel the squeeze, and if you put yourself in that category, now’s the time to consider implementing one or more of the below measures.

1. Start building up a buffer

There are no two ways about it – interest rates will go up over the next few months.

Currently, the RBA cash rate is at 1.35%.

Economists from the big four banks are predicting it could increase to anywhere between 2.60% (Commbank) and 3.35% (ANZ) by November.

That means it’s important to start planning ahead now, if you can, by building up a buffer.

This usually includes putting extra money into an offset account, redraw facility, or savings account – usually a facility that’s attached to your mortgage or easy to access.

2. Reduce expenses

Stan, Netflix, Spotify, Amazon, Audible, Apple TV, Disney, Paramount+, Kayo, Binge … the list goes on.

How much do you spend on subscriptions each month?

While they helped us get through lockdowns, these subscription services (that you might have forgotten to cancel) could be costing you a lot more than you realise.

In fact, the average Australian household spends $55/month on entertainment subscriptions .

Next on the hit list: takeaway coffees.

Six takeaway coffees a week costs about $27, which is about $120 a month, or $240 per couple.

Instead, you can brew your own (barista-quality) coffee at home for $30-$70 a month.

Then there’s Uber Eats, Menulog, DoorDash, Deliveroo – sure, takeaway dinner is great every now and then, but if you’re making a habit of it then it’ll really start to add up.

And the best part about home-cooked meals is the leftovers for lunch the next day – that’s two meals for the price of one.

3. Shop around

A recent Choice study found Aldi to be the cheapest grocery store. So that’s a start when it comes to your weekly food bill (which is also going up each month thanks to inflation).

Failing that, this ING survey found the average Australian family saves $114 a month simply by doing their grocery shopping online (must be because you spend less time in the choccy aisle, and more time buying just the essentials!)

But it’s not just your groceries that you can shop around for a lower price on.

Car insurance, home insurance, utilities, your phone bill, and your internet bill are other monthly expenses you can usually find a better deal on.

4. Refinance

While we’re on the subject of shopping around, it goes without saying that if you haven’t refinanced for a while, there’s a decent chance you could get a better rate on your home loan.

But why refinance now if interest rates will just keep rising anyway?
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Well, let’s say you refinance your variable rate home loan this month from 3.50% down to 3%.
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If the RBA raises the cash rate by 0.50% next month, and your bank follows suit, your interest rate will then be 3.50%. ⁣
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But if you choose not to refinance (and your bank follows the RBA’s lead) it’ll be 4%. ⁣

This 0.5% gap would remain for all subsequent upcoming interest rate rises – so long as the banks increase their interest rates in lockstep with the RBA.⁣

Another option you can consider is consolidating multiple loans – such as a car or personal loan – into your mortgage to reduce your monthly expenses.

Now, it’s important to note that if you do this you’ll pay more in interest on the car and/or personal loan over the lifetime of those loans, but if you need cash flow now, this could be a possible solution.

Similarly, you can also consider refinancing to extend the term of your mortgage, which could help reduce your monthly repayments.

Once again, you’ll end up paying more interest over the life of your loan with this option, but it can give you more breathing space if you need it.

5. Come and speak to us

Last but not least, if you’re concerned about what’s going on with interest rates, inflation and/or how you’ll meet your home loan repayments, please don’t hesitate to get in touch with us.

Everybody’s situation is different. And we understand many of the ideas we’ve listed above might not suit your financial and personal situation.

So if you’re worried about how you’ll meet your repayments in the months ahead, give us a call today. We’d love to sit down with you and help you work out a plan moving forward.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Renovate or invest? How 7-in-10 Aussies are using their equity

Thu, 13 Oct 2022 01:34:00 GMT

Have you thought about unlocking your property’s equity?

Seven in 10 homeowners have recently used the equity in their home to renovate, invest in property or shares, or boost their superannuation. Have you thought about how you could take advantage of last year’s property price spike?

You might have heard that property prices spiked 23.7% in 2021 , yeah?

That’s quite the growth spurt!

So how do you take advantage of that growth without (or before) selling your home?

Well, one way to do so is to cash out equity while property prices are high (which we’ll explain in a little more detail below).

According to NAB research , three in 10 mortgage holders have recently done just that and have used the money to give their home a facelift by renovating.

Other popular options include using unlocked equity to buy an investment property (16% of homeowners), invest in shares (12%) and boost super balances (8%).

So how does ‘cashing out equity’ work?

It might sound complicated – but we promise it’s not.

Let’s say you bought an $800,000 house three years ago that, due to last year’s property price surge, is now worth $1 million.

And let’s also say you took out a $600,000 loan for that house, which you’ve managed to pay down to $500,000 (you little beauty!).

By refinancing that $500,000 loan into a $700,000 loan (70% of your property’s new market value), you can unlock $200,000 in equity to help fund a deposit for your renovations or to buy an investment property.

It’s also worth noting that banks will typically let you borrow up to 80% of a property’s market value.

So if you upped the ante and refinanced to an $800,000 loan, you’d be able to unlock $300,000 in equity.

Want to find out more about unlocking the equity in your home?

If it still all sounds a little confusing, don’t stress, we’d be more than happy to sit down with you and help you work out how much equity you can unlock.

And if you decide to proceed, the good news is part of the process can include refinancing your home loan.

Why’s that good news?

Well, just because interest rates are going up, doesn’t mean you can’t scope out a better deal on your mortgage. Competition amongst lenders remains fierce, particularly if you have a decent amount of equity and a strong track record of meeting your mortgage repayments.⁣

So if you’d like to explore your options when it comes to unlocking the equity potential in your home, get in touch today – we’d love to help you crunch the numbers.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

The tax on luxury cars just got a little cheaper

Thu, 13 Oct 2022 01:34:00 GMT

The luxury car tax threshold has just been raised

Got your eye on a luxury car that’ll make your mates jealous? Or perhaps something that’s a little more fuel-efficient and environmentally friendly? Today we’ll run you through a new tax change that could help you buy something a little more la-de-da.

Have you heard about the luxury car tax (LCT) threshold?

Basically, if you buy an imported car with a GST-inclusive value that’s above the LCT thresholds, the tax man slugs you with an extra 33% tax on the exceeded amount (minus the GST component).

But the good news is the LCT thresholds have just been given a pretty decent boost – the third one in a row.
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From July 1, the threshold has been boosted by $5,257 to $84,916 for fuel-efficient vehicles, and by $2,697 to $71,849 for other regular vehicles (all inc. GST).

According to the ATO , a fuel-efficient vehicle is one with fuel consumption that doesn’t exceed 7.0L/100km on the combined cycle.

How does the LCT threshold work?

Ok, so this threshold boost isn’t just good for people wanting to buy a vehicle under the threshold.

It’ll also make cars above the threshold more affordable, too.

Let us explain.

Say you want to buy a Tesla Model 3 Performance , which has a GST-inclusive price of $93,325.

Under last financial year’s LCT threshold of $79,659 for fuel-efficient vehicles, you would have paid a LCT tax of $4,100 (exceeds LCT threshold by $13,666, subtract GST component paid, multiply by 33% = $4,100 LCT).

But now that the LCT threshold for fuel-efficient vehicles has been boosted to $84,916, you would only pay LCT of $2522 ($8,409 – GST component paid x 33% = $2522).

And if you wanted to avoid paying the LCT altogether, you could instead purchase a Model 3 Long Range, which has a GST-inclusive price of $81,725.

That means this financial year, it’s below the LCT threshold, but last year you would have been slugged with a LCT of $620.

Get in touch today to explore your finance options

If you’ve got your eye on a particular vehicle – luxury or not – and you’d like to explore some finance options to help purchase it, give us a call today.

We can help you find the right loan for your circumstances, depending on whether the vehicle is for business, personal use, or a mix of both!

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Single and under 30? You’re a great fit for the 5% deposit scheme

Thu, 13 Oct 2022 01:34:00 GMT

Here’s how to jag one of the limited spots

Single Australians under 30 snare the lion’s share of spots in the federal government’s 5% deposit first home buyer scheme, according to new data. Here’s how to secure one of the highly coveted 35,000 scheme spots released on July 1.

Long gone are the days when you had to scrimp and save for a 20% deposit to buy your first home (that’s so 2019).

These days, you can crack the property market with just a 5% deposit and pay no lenders’ mortgage insurance (LMI), thanks to the federal government’s First Home Guarantee (FHG) scheme.

NAB – which is one of two major lenders (alongside dozens of non-majors) that provides finance under the scheme – recently released some pretty insightful data on just who is jagging the limited spots each year.

The data shows almost two-thirds of people (63%) who purchased a house under the scheme were single buyers – whereas for non-scheme purchases, single buyers only made up 49% of borrowers.

Of the single people snapping up First Home Guarantee spots, 59% were female and 41% were male.

Government data also shows that the median age of people using the scheme is 25 to 29 years old.

“People going at it alone shouldn’t be disadvantaged and we are seeing the scheme help them buy a property,” says NAB Executive Home Ownership, Andy Kerr.

How the scheme helped one homebuyer purchase 4 years sooner

First home buyers who use the scheme fast-track their property purchase by 4 to 4.5 years on average, because they don’t have to save the standard 20% deposit.

Better yet, not paying LMI can save you anywhere between $4,000 and $35,000, depending on the property price and your deposit amount.

This is exactly what helped car salesman Rihan Nasser purchase his villa unit last August.

Initially, Rihan had been crunching the numbers on what he’d need to do to save a 20% deposit, admitting “it would have taken him years”.

“The scheme fast-tracked the process by maybe two, three or four years and made it easier to come up with the deposit to buy,” says Rihan.

“Once I knew I needed 5%, I knuckled down on the saving. It took me about a year and a half. I would 100% recommend the scheme. It made it so much easier.”

How to get the ball rolling today

Ok, so here’s the catch: places in the First Home Guarantee scheme are generally allocated on a first-come, first-served basis.

And don’t let this year’s expansion to 35,000 spots lull you into a sense of complacency – they’ll get snapped up fairly quickly.

So if you’re a first home buyer looking to crack the property market sooner rather than later, get in touch today and we can explain the scheme to you in more detail, check if you’re eligible, and then help you apply through a participating lender.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.