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About three-quarters of homebuyers are now using mortgage brokers, according to the latest data from Comparator.In the September quarter, brokers originated a record-high 74.6% of all new home loans, while banks originated a record-low 25.4%.Choice is the number one reason homebuyers prefer brokers – a broker will compare home loan products from a range of lenders on your behalf, while banks will tell you about their own products only.For the same reason, many people who already own their own home turn to brokers when they’re thinking about refinancing.It’s generally a good idea to consider switching home loans every few years, because lenders often give special deals to new customers. The Australian Competition & Consumer Commission's most recent home loans inquiry found that borrowers with home loans between three and five years old paid, on average, 0.58 percentage points more in interest than those taking out new loans.That’s why you could potentially save tens of thousands of dollars over the life of your loan by refinancing to a comparable loan with a lower interest rate. If you’re thinking about refinancing, get in touch – I’ll be happy to crunch the numbers for you, to see how much you could save by switching loans.Want to refinance? Let's talkHit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about Record numbers of consumers turning to brokers

Higher interest rates make it harder for borrowers to qualify for larger loans or even loans of any size. That's because for every increase of 0.50 percentage points in interest rates, the average person's borrowing capacity falls by about 5%, according to PropTrack senior economist Paul Ryan.Since 2022, the Reserve Bank of Australia (RBA) has increased official interest rates by 4.25 percentage points, thereby reducing the average person's borrowing capacity by about 40%.If and when the RBA starts cutting rates, borrowing capacities will rise. In the meantime, the banking regulator, APRA, could achieve the same outcome by reducing a thing called the mortgage serviceability buffer.Currently, to protect borrowers and the banking system, lenders need to add a buffer of at least 3 percentage points when assessing someone’s ability to repay a home loan – so if, hypothetically, you applied for a loan with an interest rate of 6.20%, lenders would assess whether you’d be able to make your mortgage repayments if the rate rose to at least 9.20%.If APRA reduced this buffer requirement to say 2.5 percentage points or 2 percentage points, the assessment rate on the hypothetical loan mentioned above would fall, thereby increasing your borrowing power.However, APRA recently ruled that it would keep the buffer at 3 percentage points. “In reaching the decision to keep the settings steady, APRA took account of high household indebtedness and a pick-up in credit growth, persistent cost-of-living pressures, a weakening jobs market and heightened geopolitical risks,” the regulator said.Talk to me about your borrowing powerHit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about How interest rates import your borrowing capacity

If you’re a lower-income or middle-income earner, you will soon have a new way to buy a property, after the federal parliament passed legislation for Help to Buy.Under Help to Buy, individual buyers who earn less than $90,000 per year or joint buyers who earn less than a combined $120,000 will be able to purchase a property in tandem with the government.The government will take an equity stake of up to 30% in an established property or up to 40% in a new property, thereby reducing the amount of money you must contribute to enter the market. If you eventually sell the home, the government will receive some of the sale proceeds, equivalent to their stake.Property price caps apply, which vary from location to location, from $450,000 in the regional areas of Western Australia, South Australia and Tasmania to $950,000 in Sydney.Help to Buy will be open to any Australian citizens who do not currently own a home and who intend to live in the property they purchase. Buyers will need a deposit of only 2% and will not need to pay lender’s mortgage insurance.However, while the scheme has been approved at the federal level – and therefore in the ACT and Northern Territory – it has not yet been approved at the state level. For that to happen, each individual state will need to pass supporting legislation; once a state does so, it will be able to participate in Help to Buy. Ideally, that will happen sometime in 2025, although it depends on each state’s circumstances.Need a home loan? Let’s chat.Hit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about Govt unveils new assistance scheme for owner-occupiers

Good news for anyone planning to buy in early 2025, with the latest data suggesting conditions have turned in favour of buyers.During this year's spring selling season, sales volumes across the country were 4% lower than the spring average in 2019-23, according to CoreLogic. At the same time, the median amount of time required to sell a home rose from 28 to 32 days between the August and November 2024 quarters.All this points to a market in which, increasingly, vendors are having to compete with other vendors to sell their home, rather than buyers having to compete with other buyers to purchase a property. That suggests there will be pressure on vendors to reduce their asking prices as we head into 2025, which will give buyers more negotiating power. If you’re thinking about entering the market in 2025, I’d recommend that you consider:Looking for ways to increase your savings rateAvoiding making any unnecessary large purchasesTrying to improve your credit score – by paying all your bills on timeMaintaining your current role – it’s hard to get a loan when you’re still in the early stages of a new jobContacting me for a home loan pre-approvalGet in touch if you need a pre-approvalHit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about Buyers gaining nogatiating power heading into new year

The federal government is aiming to improve housing affordability by increasing the supply of housing, which would be expected to reduce demand and put downward pressure on prices. As a result, the government is attempting to facilitate the building of 1.2 million homes in the five years from July 2024. So what does the latest homebuilding approvals data show?Unfortunately, it suggests the government will struggle to achieve its target.In the five years to September 2024, only 937,950 approvals were issued. This is a drop-off from the five years to September 2023, when 949,469 approvals were issued, according to the Australian Bureau of Statistics. It’s also worth noting that because some projects never proceed after receiving the green light, the building of 1.2 million homes will require an even greater number of approvals.But there is some good news: Housing Industry Association economist Maurice Tapang said “the market is past its trough” and more buyers are now choosing to build new homes.“The cost of homebuilding materials are growing at a more normal pace, while build times for houses are back to pre-pandemic levels,” he added. If that trend continues, it would represent good news in terms of affordability.Need a home loan? Let’s chat.Hit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about More homes needed to solve affordability problem

There’s a lot more to a home loan than just the interest rate. The features of the loan can also have a big impact on your total mortgage costs and repayment flexibility, which is why it’s important to understand the potential benefits of a redraw facility and an offset account.Redraw and offset have one thing in common – they reduce the amount of interest you get charged. If, for example, you have $500,000 outstanding on your loan and $40,000 in either redraw or offset, you’ll be charged interest on only $460,000 (i.e. $500k minus $40k).But there are subtle differences between the two features.Redraw is a facility that sits within your loan. The way you accumulate money in redraw is by making extra home loan repayments. The lender will allow you to borrow back (or redraw) these extra repayments, subject to certain conditions. But because this money belongs to the lender, it’s technically possible the lender might decide one day not to allow you to reclaim the money, or change the conditions of redraw.Offset is a separate transaction account that’s linked to (but separate from) your home loan account. The way you accumulate money in offset is through deposits – for example, salary payments. The money in your offset belongs to you, so the lender can’t prevent you accessing it.Pros: you can use redraw and offset to reduce your interest bill and pay off your home loan sooner.Cons: your lender may charge you a higher ongoing fee or higher interest rate to access these loan features. Also, you may be charged a fee for each redraw transaction.Contact me for redraw & offset adviceHit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about Redraw and offset – are these loan features right for you?

More and more Australians are turning to property investment, new analysis has revealed.CoreLogic’s head of research, Eliza Owen, found that the number of investors entering the market was exceeding the number exiting, by comparing home loans data with listings data.“Investor inferred listings have been trending higher since March this year, to 13,000, but remain well below the peak of investor listings activity in November 2021,” Ms Owen said.“As investment listings remain below these highs, the number of new loan commitments remains high at 18,400. The previous five-year average for the month was 14,516.”Why is property investing so popular? Probably because it offers three big potential benefits:Capital growth – if your property rises in valueOngoing rental income – which can be used to pay down your mortgageTax benefits – you can reduce your taxable income if your property is negatively gearedReach out if you’re thinking about buying an investment property. I’ll model different repayment scenarios for you, so you can make an informed decision about whether investing is right for you.Need a home loan? Let’s chat.Hit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about New insights into property investment

Are you considering renovating? If so, you’re not the only one, because renovations are incredibly popular, with homeowners investing $2.84 billion on alterations and additions in the June 2024 quarter, according to the Australian Bureau of Statistics. Typical costs range from about $2,000 to $5,000 for bedrooms, $15,000 to $30,000 for bathrooms and $25,000 to $50,000 for kitchens, according to JDL Constructions.Here are three ways to finance your renovations:Take out a construction loan. With a construction loan, the funds will be distributed in stages throughout the project, rather than in an upfront lump sum, and you’ll be charged interest only on the funds you’ve already received. Your construction loan will be interest-only during the building phase and will then revert to a standard principal-and-interest home loan once the building has been completed.Take out a personal loan. Compared to a construction loan, the application process is likely to be faster and your chance of approval is likely to be greater, but your interest rate is likely to be higher as well.Pay cash. This is the simplest option.If you’re thinking about paying for the renovations with a credit card, please be careful, because while you will not have to go through an application process, the interest rate will be extremely high and could leave you susceptible to falling into a debt trap.Want to renovate? Let’s discuss your optionsHit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about Top 3 ways to finance your renovations