Posts Tagged ‘interest rates’

From our CEO: Are you making the right rate reaction?

Posted on Friday February 17th, 2012 by Mortgage Choice
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Posted in Home Loans | No Comments »
Michael Russell, CEO of Mortgage Choice

Michael Russell, CEO of Mortgage Choice

The bold decision this month by some lenders to move their home loan interest rates out of step with the Reserve Bank has signalled to borrowers that home loan interest rates could shift at any time, in any direction and by any amount. Borrowers need to be aware of this changed interest rate environment and should be prepared to switch to a better suited lender and/or loan product. Otherwise, they may risk paying more over the life of their loan.

 

The savings made by reviewing a loan can be significant. An analysis of our recent loan data shows we have saved our refinancing customers on average $10,000 each over five years*. Borrowers who want to investigate any savings that could be made on their own home loan, and who may not have the time or know-how to research the market themselves, can call on a home loan expert.

A professional mortgage broker provides borrowers with the latest home loan information on a wide range of lenders and loan products. It is a broker’s job to be across changes in interest rates, new products and any special discounts that may be available to borrowers. When considering refinancing, our brokers will help borrowers to assess the overall costs versus benefits, taking into consideration not only home loan interest rates but also any upfront, ongoing and exit fees, loan features, lender service and accessibility, etc. 

Now is the time for borrowers to make the right move and develop a much closer relationship with their local mortgage broker who will help them stay on top of the home loan market.

Refinancing resources:

*Average savings from 368 customers who decided to refinance from Aug 2011 – Jan 2012.

Tips for budgeting, spending and managing your mortgage

Posted on Friday January 20th, 2012 by Mortgage Choice
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Becoming a better budgeter, wising up on spending and making the most of any savings can help borrowers master their mortgage and own their home outright sooner. The beginning of the year is an ideal time to set new financial resolutions if your goal is to pay off your mortgage sooner.

Challenge yourself to increase your home loan repayments by readjusting your budget and finding ways to make extra contributions to your mortgage. Well thought-out saving, spending and loan repayment strategies can help put you months or even years closer to living mortgage free. Keep in mind even small financial changes can have a big impact on how much interest you pay over the life of your loan and the length of your loan
term.

Resolution 1.  Become best buddies with your budget
If you don’t already have a budget, the New Year is the ideal time to start one. Ensure it factors in all your regular spending – home and/or other loans, utility bills, medical expenses, memberships, grocery bills, insurance costs, etc. Don’t forget to include funds for socialising treats. Be honest with your budget and refer to it each time you contemplate a new expense.

Resolution 2. Slash your cash limit
Consider ways to cut your daily spend. For instance, a daily caffeine hit at $4 per weekday equates to $80 per month. Did you know by making a coffee an every-second-day spend and contributing $40 extra per month to your mortgage from day one (based on a $300,000 loan over 30 years at 7%) could reduce the total interest owed by over $31,000 and the loan term by almost 2 years?

Resolution 3. Review your home loan with a fine-toothed comb
There could be underutilised loan features costing you money or features worth refinancing for. Get to know your loan’s features. Your mortgage broker can help review your current loan and its features and identify any opportunities to shop around for something better suited to your goals.

Resolution 4. When rates fall, keep repaying more
If your home loan’s interest rate has recently fallen, consider keeping your repayments at the higher, pre-fall rate. For example, take a home loan of $300,000 at 7% over 30 years. If your rate reduces to 6.5% and you keep repaying your loan as if the interest rate was still 7%, you could shave approximately 4 years off your loan term and save over $60,000 in interest owed.

Resolution 5. Make the move from monthly to fortnightly
Switching your monthly repayment to fortnightly may make a significant difference to your loan term and the interest owed. There are 12 months and 26 fortnights in one calendar year; by paying fortnightly, you make the equivalent of 13 monthly repayments. The savings, based on a $300,000 loan at 7% equates to around $103,000 in interest and 6 years and 6 months off the loan term.

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Cash rate on hold, but interest rate may still go up

Posted on Wednesday February 2nd, 2011 by Mortgage Choice
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Posted in interest rates | No Comments »
Interest rates infographic

Interest rates infographic

While the Reserve Bank of Australia decided to keep the cash rate on hold yesterday, there is still a possibility that banks and lenders will raise the home loan interest rates to cover their funding costs.

So what are some of the factors that influence the cash rate and home loan interest rate? And why do different lenders offer different rates?

We’ve put together an infographic to explain this, take a look and let us know what you think by leaving a comment below.

Investing in a property located near a university in Sydney

Posted on Monday July 12th, 2010 by Mortgage Choice
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Posted in First Home Buyers, Property Investment, Property Market | No Comments »

Have you ever considered investing in a property located near a university?

The current property report video series looks at the value in purchasing a house in a suburb located near a university. In this week’s video, the university suburbs of Westmead and Kensington in Sydney, NSW  are reviewed.

Building approvals

Australian building approvals fell 6.6% in May 2010 (seasonally adjusted) and the chief economist from the Housing Industry Association, Dr Harley Dale says progressively higher interest rates and housing supply constraints have weighed heavily on the new home building industry.

National Rental Affordability Scheme

Jo Brown from United Property Partners speaks about the Government’s National Rental Affordability Scheme and the criteria a dwelling must meet in order to qualify for it.

Tax tip

This week’s tax tip is on turning your home into an investment property.

See investing in a property located near a university in Canberra for the first part of the series. Also, see Reserve Bank’s accurate decision to keeps cash rate at 4.5% on the most recent Reserve Bank cash rate decision.

If you have something to say about property investment, first home buying or next home buying and the different options out there then leave us a comment below.

Reserve Bank’s accurate decision to keeps cash rate at 4.5%

Posted on Tuesday July 6th, 2010 by Mortgage Choice
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thmoneyHr upCurrent and future property owners will be relieved as interest rates stay the same at 4.5%, going into the new financial year. This means lenders will be much less likely to move mortgage interest rates up at this point in time.

The decision by the Reserve Bank of Australia (RBA) to keep the cash rate at 4.5% has met the expectations of financial markets and economists according to The Australian.

The RBA has implemented six official rate rises from October to May and the full effects of these have not yet been seen. There is a slowing of housing prices and housing finance demand has dropped over several consecutive months now even though:

  • Employment is solid
  • The resource sector is strong
  • Many property markets are moving at a healthy pace

This is a reflection of the global economic uncertainty.

Slowed housing finance demand

Slowed housing finance demand and prices is a good thing however for those looking to enter the market. Less competition means:

  • Many regions have become buyers’ markets
  • Anyone with a healthy deposit or equity, a steady income, few debts, a good credit record and solid employment, may find they are well placed to build upon their financial portfolio now by buying property

Greater credit should also be given to Australian mortgage holders, the majority of whom are coping well with ten-year average standard variable interest rates. The 30-day arrears rate for prime mortgages rose slightly during the March quarter, but reached only 1.34%*, well below delinquency rates experienced throughout Europe, the UK and the US.

First homeowners survey

Clever borrowers used the relief of decades-low rates over late 2008 and most of 2009 to get ahead with their repayments and prepare for changes to rates and their financial situation. Many continue to do so. The Mortgage Choice 2010 Recent First Homeowners Survey found:

    1. 64% of respondents were making extra repayments
    2. the majority contributing as much as possible

      This not only helps a borrower create a financial buffer, it shaves time off their home loan term and off the overall interest owed.

      Still, we hope the RBA keeps the cash rate on hold for at least another quarter or until we see an upturn in consumer and business sentiment, spending and confidence. Another tap on the brakes may have a heavier effect than expected.

      Tells us what you think about the recent interest rate announcement, leave a comment below.

      Melbourne unit prices with median price of $350k-$450k.

      Posted on Tuesday June 15th, 2010 by Mortgage Choice
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      Posted in Property Investment, Property Market | No Comments »

      Looking to buy a unit in Melbourne for a median price of $350k-$450k?

      This month the  Reserve Bank of Australia (RBA) decided to leave the official interest rate on hold at 4.5%. Many economists expect that the RBA will continue to keep rates steady over the coming months.

      The Australian Bureau of Statistics supports these assumptions with their findings of:

      • 14.8% fall in building approvals in April for the month before
      • Approvals reached their lowest levels since May of last year

      In this week’s property report video two Melbourne suburbs,  St. Kilda and Hawthorn, take the spotlight with over 50 unit listings of a median price between $350k – $450k.  This is great news for investors and new home buyers.

      Mark Swivel talks about how a community land trust can make buying a new home more affordable and the tax tip of the week is on renting out a space in your principal place of residence and how this can be financially a benefit to home owners.

      Other popular articles include Should you choose a fixed interest rate or variable interest rate mortgage? and Suburbs in Victoria experiencing the lowest days on the property market.

      If you have any additional hints and tips on the property market in Melbourne please leave a comment below.