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Most mortgage holders will be able to cope if and when interest rates start rising.That’s one of the findings from the Reserve Bank of Australia’s (RBA) latest half-yearly Financial Stability Review.Between February 2020 and February 2022, many borrowers built up big repayment buffers, by paying extra money into their offset and redraw accounts. During those two years, the median buffer for owner-occupiers with a variable-rate loan increased from about 10 months of repayments to about 21 months.“The increase in payment buffers partly reflects the impact of lower interest rates on minimum repayments,” according to the RBA.“If interest rates were to increase by 200 basis points (i.e. 2 percentage points), current excess payments would be equivalent to just under 19 months of scheduled payments.”In further good news, the share of loans in negative equity (i.e. where the loan exceeds the value of the property) has also significantly improved during the two-year period, falling from 2.25% to less than 0.25%.Want to compare interest rates? Let's talk. Hit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Book a review 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 Median repayment buffers double from 10 to 21 months

National residential construction costs increased 9.0% over the 12 months to March 2022, according to CoreLogic’s Cordell Construction Cost Index.That was the highest annual growth rate on record apart from the introduction of the GST in 2001, and means Australians are having to pay more money to build or buy new homes.It's hard to know whether the growth in construction costs is trending up or down: costs rose 2.4% in the first quarter of 2022, which was significantly higher than the previous quarter (1.1%) but lower than the quarter before that (3.8%).“Timber costs continue to rise, with cladding, decking and other timber items affected,” according to CoreLogic construction cost estimation manager John Bennett.“Steep rises in metal prices are also now flowing through to the market, with structural steel, fixings and metal components hit hard.“We continued to see volatility in the rest of the market, with imported products the most vulnerable due to elevated shipping costs. Rising fuel costs are also on the radar and we have continued to see further increases in the cost of other materials."I can help you get a construction loanI can help you get a construction loan. Hit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Book a review 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 Supply chain issues trigger sharp rise in homebuilding costs

The federal government has expanded its support to first home buyers and single parents and has also released a new program for regional buyers.The First Home Loan Deposit Scheme and New Home Guarantee, which currently support a combined 20,000 first home buyers per financial year, will now support 35,000 per year from July 1. The price caps for these programs, which differ from area to area, will also be increased, by anywhere from $50,000 to $250,000. Under these programs, eligible first home buyers can purchase properties with just a 5% deposit, without needing to pay lender's mortgage insurance.The Family Home Guarantee, which currently supports 10,000 single parents over four years, will now support 5,000 per year from July 1. Under this program, single parents can buy properties with just a 2% deposit.The new Regional Home Guarantee will help 10,000 people per financial year (starting October 1) to buy a property in a regional area with just a 5% deposit. This program is open to first home buyers, people who have not owned a home for at least five years and permanent residents.Get in touch if you need a home loan. Hit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Book a review 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 buyers now eligible for federal housing incentives

Is 2022 going to be the year you start investing in property? Maybe you've already started building your portfolio and are looking to take your investments to the next level? It's vital that you realise the property and investment loan environment, no matter where you are in your path, so you can make the best decision. This year appears to be a good year to invest in real estate. Continue reading to learn more about why this is the case and how to plan for 2022. Prices are rapidly increasing: A real estate investment in property is just that: an investment. With this in mind, market swings must be considered while making an investment decision. The Australian property market is now through a period of tremendous expansion, with property values increasing at an alarming rate. Property prices in Australia increased by 20.6 percent between November 2020 and November 2021. When we look at Australia's residential property market in isolation, we can observe that prices have risen by 22.2 percent in the year leading up to November 2021, which is much over the national average. This amounts to an increase of $126,700 over the previous year's median values. While November 2021 witnessed just a 1.3 percent increase, the lowest in the previous ten months, the forecast remains basically unchanged. In other words, housing prices are likely to continue rising through 2022, even if the rate of rising slows slightly. So, what does this imply for financial investors? It suggests that homes acquired now are likely to appreciate in value over time, resulting in a high return on investment when they are sold. Delaying a home purchase might also result in purchasers paying extra for the identical property in the future. The Rental Market Is In Good Shape:  Purchasing a rental property is a popular investment option in Australia, and for good reason. The property's rental income can be used to help pay down the mortgage or home loan, as well as other obligations. Renting out a house may help you create income and increase your return on investment if you promote it appropriately. The rental market is now robust, making 2022 an excellent time to buy this type of property. According to a survey from 2021, rental rates increased by 7.4% in 2021, the greatest pace of rising in well over a decade. Almost half of the gain occurred in the fourth quarter of 2021, indicating that the rental market is still booming. Interest Rates on Mortgages Remain Low: For a long time, home loan and mortgage interest rates have been at all-time lows, making 2022 an excellent year to buy a home. There is a sense of urgency here: the Reserve Bank of Australia has stated that interest rates would likely rise before 2024, with some anticipating that these increases will begin within the next year. By the end of 2022, interest rates are predicted to have risen to 1%, and by the end of 2023, they will have risen to 1.75 percent. A piece of great advice for buying an investment in property … [Read more...] about Why 2022 Is The Right Time To Invest In Property

Mortgage brokers were responsible for 66.5% of all new home loans in the December quarter, according to the latest data from research group Comparator.That is not only a record for a December quarter, it's also a significant increase on the market share brokers recorded in December 2020 (59.4%) and December 2019 (55.3%). Mike Felton, the CEO of the Mortgage & Finance Association of Australia, said the strong increase in mortgage broker market share shows that consumers really value the service, competition and choice that brokers provide.When you visit a bank for home loan advice, the bank will only tell you about its own products, even if it knows another lender is offering a better home loan.But when you visit a broker, the broker will compare interest rates, loan features and borrowing criteria from a range of lenders. The broker will also negotiate with lenders on your behalf. That significantly increases your chances of getting a great loan that’s tailored to your unique circumstances.Want to compare interest rates? Let's talk. Hit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Book a review 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 and more Australians choosing brokers over banks

To receive a house loan or mortgage, first-time buyers Sydney will almost always need to put down a deposit. There are, however, a variety of loan packages available, many of which have varied initial deposit requirements. With this in mind, how much of a down payment do you need to get a mortgage on your first home? Purchasing a First Home with a 20% Down payment: Securing a house loan for first-time home purchasers might be tough since they do not own a home. A house buyer would often sell their present home to fund the purchase of their new home, or they may use their current home as collateral on their new owner-occupier mortgage. Both choices are unfortunately unavailable to first-time customers. This is why first-time buyers will often require a larger down payment, lowering the proportion of the total purchase price they must borrow. A payment of up to 20% of the total purchase price lowers the loan-to-value ratio (LVR), making the buyer a more appealing prospect to lenders. Purchasing a First Home with a 5% Down Payment: A 20% down payment is not required for all borrowers. First-time home buyers may be able to borrow the cash they require with a much smaller down payment — as little as 5% in some cases. While this may help you to purchase a home sooner, it may also have drawbacks. If you put down a smaller deposit, you'll have fewer loan options and the loan term will be longer, potentially exposing you to higher interest rates. You also pose a higher risk to the lender, and as a result, you'll likely have to pay extra over the life of the loan (we'll go through Lenders' Mortgage Insurance in more depth below). Furthermore, loan products requiring a 5% deposit will be subject to tougher lending criteria, and you will be required to demonstrate that you have a good credit history with low levels of ongoing loan and credit card debt. Purchasing a First Home with a 2% Deposit:  The Australian federal government can help single parents acquire a family home with a 2% deposit. The Family House Guarantee is available to both first-time homebuyers and individuals who have previously acquired a home. The government has committed to offering 10,000 Family Home Guarantees to customers who match the loan conditions between 2021 and 2025 as part of the initiative. This implies that in some situations, house buyers may be able to obtain a mortgage with as little as a 2% down payment. Those who take advantage of the program may be eligible for additional types of help, such as homeowner grants, when they purchase a home.  The Benefits of a Larger Down Payment: Finding the minimum permissible deposit requirement isn't always in your best interests. You are effectively obtaining a share in your house by paying a deposit. The greater the deposit, the less you'll have to pay back on the property loan, which means you'll save money by reducing the loan term. A larger deposit minimises the lender's risk, which means Lenders' Mortgage Insurance … [Read more...] about HOW MUCH DEPOSIT DO FIRST HOME BUYERS NEED:

When it comes to classifying debt as either ‘good’ or ‘bad’, borrowing to fund your education or buy a property are generally regarded as good debt, because both tend to deliver a return on investment.However, you might not realise that taking on HECS-HELP debt can make it harder to qualify for a home loan and reduce your borrowing capacity.That’s because, if hundreds of dollars per month are being diverted from your salary to repay your student debt, that means you have less money to devote to mortgage repayments.So does that mean you should repay your HECS-HELP loan as soon as possible?Maybe yes, maybe no. On the one hand, eliminating your student debt could make it easier to get a home loan. On the other hand, student debt is interest-free (although it does increase in line with inflation), so it might be better to repay other interest-incurring loans first.Give me a call if you want to know the best approach for your situation or your child’s situation.Contact me for expert loan adviceContact me for expert loan adviceHit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Book a review 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 Why your student loan can make it harder to get a home loan

Buying a typical house will now cost you almost 30% more than buying the typical unit.CoreLogic has reported that, at the end of February, Australia's median house price was 29.8% higher than its median unit price – a record gap. To put it in dollar terms, median prices are $791,400 for houses and $609,800 for units, which means the gap is almost $182,000.That gap has significantly widened in the past two years:February 2020 gap = 8.3% / $43,000February 2021 gap = 16.2% / $87,000It’s possible the house-unit price gap will further widen, because now that so many Australians are working from home, more people want a dedicated home office, which could lead to increased demand for houses.On the other hand, it’s also possible the gap will narrow, because with houses looking relatively dear and units relatively cheap, demand might shift from the former to the latter.Get in touch if you need a home loanGet in touch if you need a home loan Hit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Book a review 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 Price gap between houses and units hits record level