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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 cool...
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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 sk...
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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 ...
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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 Melbo...
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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...
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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 mi...
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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 a...
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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 i...
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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 h...
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A cost of living crunch is driving a new trend among renters – and it’s changing the wish lists of some property investors. We reveal what’s happening across the rental and investment markets. Investors have been a driving force in the property market lately, with lending to investors up almost 30% over the year to May 2024. Part of the appeal has undoubtedly been rising property values, which have jumped 10.14% nationally since the market lows of late 2022, leaving many investors pocketing tidy capital gains. However, successful investing can also involve buying a property with plenty of tenant appeal, and new research from CoreLogic indicates that renters are opting for homes with more bedrooms. Why is that the case? Most people are feeling cost of living pressures right now – and renters are no exception. Renters aren’t just dealing with higher utility bills and rising costs at the checkout and the bowser – they’ve also had to deal with rents rising 8.2% nationally ove...
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