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Stamp duty is the tax governments place on legal documents, usually in the transfer of assets or property. Governments impose stamp duties, also known as stamp taxes, on documents that are needed to legally record certain types of transactions.It is one of the most unpopular taxes in Australia, which could soon be scrapped in NSW if government plans get the green light. But what will it be replaced by? And would first home buyers in Sydney be better or worse off under the proposed new model?An Outdated TaxCurrently, stamp duty is one of the biggest upfront costs of buying property in Australia. The stamp duty calculator in NSW calculates that amount you pay based on the property’s market value under a sliding scale. Its rates vary from state to state, and whether you’re an owner-occupier, first home buyer in Sydney or an investor.In NSW, owner-occupiers face an average bill of $34,000 which is payable within three months of settlement. First-home buyers in Sydney are exempt or receive concessions on the tax if they buy an established property costing less than $800,000 or a newly built home valued at under $1 million.Critics, including the NSW treasurer, have slammed the tax as “outdated” and a “relic from a bygone era”. That’s because the rate brackets of the stamp duty calculator in NSW, haven’t been updated since 1985 when the median house price in Sydney was around $73,000.It’s now just under $1 million.The New Replacement TaxThe NSW government wants to replace stamp duty with, what the Treasurer dubbed, the “Netflix of property tax.” Under their proposals, you will be given a choice between paying stamp duty or a smaller, annual property tax based on land value. First home buyers in Sydney would get a grant of up to $25,000 instead of an exemption. There will be no double taxation. So, you won’t have to pay the annual tax if you’re an existing homeowner that’s not planning on moving.Pros and Cons of the Annual TaxThe government is consulting on their proposal with the details examined with utmost consideration. However, if this gets the go-ahead, the new model comes with both advantages and disadvantages.On the plus side, without the financial burden of stamp duty, more first-home buyers could get on the property ladder with the help of mortgage brokers in Sydney. Older people will be more likely to downsize.However, more buying and selling throughout the market could cause a short-term uplift in property prices. As a result, you may end up paying more for a new home. That could leave you worse off under the annual tax, as you’ll likely pay more in the long run. Before getting into the buying process, consult with your mortgage broker in Sydney.Looking for the best mortgage brokers in Sydney? Connect with us today and schedule a no-obligation consultation with our best mortgage brokers in Sydney to find out how we can help you with your home loan.Looking for a loan? Get in touch. Hit the button below to arrange a conversation with one of my … [Read more...] about Will The Proposed NSW Stamp Duty Impact You?

In the September quarter, mortgage brokers originated a record 66.9% of all new residential home loans, according to research group Comparator.This compares to market share of 60.1% the year before.Why is broker market share growing so strongly?One reason is value. When you go directly to a bank, you will only get told about that bank’s products. But when you go to a mortgage broker, the broker will compare loans from a wide variety of lenders.Another reason is ethics. Brokers have to follow the Best Interests Duty, which legally obliges them to work in their clients’ best interests. Banks, though, are not bound by the Best Interests Duty.Broker market share is likely to keep increasing, due to the rollout of open banking, a system that makes it easy for consumers to share their data with third parties. Brokers will be able to use open banking to help clients shop around and find more suitable loans.Looking for a loan? Get in touch. 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 Australians turning to mortgage brokers in record numbers

Over the year to October, the size of the average Australian home loan increased 16.4%, according to the latest data from the Australian Bureau of Statistics.Loan sizes also increased in every individual state and territory, as the graph shows. Naturally, the amount of money you borrow is very important. But so is the share of money you borrow compared to the value of the property you purchase.This is known as your loan-to-value ratio (LVR). For example, if you borrowed $800,000 to buy a $1 million property, your LVR would be 80%.The lower your LVR, the more likely lenders will offer you lower interest rates and special deals. Conversely, if your LVR is above 80%, you will probably have to pay lender’s mortgage insurance (LMI), an insurance policy to protect the lender in case the borrower defaults.If you’re planning to buy in 2022, it’s important you think about:What your LVR is likely to beWhether you can aim for a lower LVR to access lower interest ratesWhether you’re willing to pay LMI to enter the market earlyThe key is to be prepared and to crunch the numbers. I can help you with both tasks.Need mortgage advice? I can help.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 Australians taking out bigger loans in response to rising property prices

An extra 4,651 first home buyers will be able to access federal government assistance during the 2021-22 financial year.The government had originally pledged to support 20,000 first home buyers this year – 10,000 under the First Home Loan Deposit Scheme and 10,000 under the New Home Guarantee.Now, the government has added an extra 4,651 places, which went unused during the 2020-21 financial year.The First Home Loan Deposit Scheme lets eligible first home buyers purchase a home with just a 5% deposit, without having to pay lender’s mortgage insurance.The New Home Guarantee is almost identical, except it applies to new builds, off-the-plan properties and house-and-land packages.The government hasn’t stipulated where the extra 4,651 places will be allocated, but it seems likely they will be spread over both programs, based on demand.Looking to buy your first home? I can help. 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 Government boosts first home buyer support

More property listings are coming onto the market, which should give buyers more choice in 2022.In November, another 96,346 properties were listed for sale, according to SQM Research. This was 2.3% higher than the month before and 20.4% higher than the year before.As the charts show, while there’s been a significant increase in new listings, there’s been a big decrease in old listings. That suggests many of these homes have finally found buyers. If buyers have more properties to choose from in 2022, it’s likely homes will take longer to sell.Properties listed on realestate.com.au during November took an average of 30 days to sell, which is incredibly low by historical standards. The year before, the figure was 44 days.In November, the amount of new listings added to realestate.com.au reached their “highest level in a decade" for capital cities and "highest level in five years" for regional locations.Need a loan? Get in touch. 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 properties being listed for sale

You might not realise that lenders often charge lower interest rates to new borrowers compared to existing customers.Over the past year, as the graph from the Reserve Bank of Australia shows, this gap has widened. Back in October 2020, owner-occupiers who took out new variable loans were charged, on average, 0.32 percentage points less than existing borrowers. By October 2021, this gap had grown to 0.37 percentage points.If the RBA increases the cash rate next year, as many economists predict, it will be interesting to see if this gap widens or narrows as lenders bid to undercut their rivals and grab more market share.Want a better rate? Get in touch. 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 Long-term home loan customers paying ever-high ‘loyalty tax’

For the past year, the cash rate has been at a record-low 0.10%, with the Reserve Bank using ultra-low interest rates as a way to stimulate the economy during the pandemic.But what will happen if and when the Reserve Bank raises the cash rate? Will it lead to a downturn in the property market?The answer is no, according to research by the Property Investment Professionals of Australia (PIPA), an association that represents buyer's agents.PIPA analysis of five periods of increasing cash rate movements since 1994 found that property prices continued to rise – sometimes significantly – even after rate rises of up 2.75 percentage points. So if interest rate rises don’t lead to property downturns, what does?PIPA says downturns occur because of some combination of reduced access to credit, falling affordability, worsening local economic conditions and declining consumer sentiment.Need a 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. 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 Analysis finds property prices can go up even when rates are rising

Investor borrowing has increased for 11 consecutive months, according to the most recent data from the Australian Bureau of Statistics.During those 11 months, the value of loans that investors signed up for jumped from $5.1 billion in October 2020 to $9.6 billion in September 2021 – an increase of 87.5%.The September result was also the second-largest month for investors in history. Why are so many investors entering the market right now? Because, in many parts of the country, investors are enjoying a rare trifecta of rising prices, rising rents and falling vacancy rates.Meanwhile, total home loan borrowing has been trending down since May, after previously reaching record-high levels.Monthly home loan commitments fell from $32.6 billion in May to $30.3 billion in September, due to an ongoing decline in owner-occupier activity.Whether you're an investor or owner-occupier, it's important to know your numbers and put a plan in place well before you start searching for a property. Feel free to contact me if you want to discuss your options.Learn more about property investment 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 Strong investor activity defies wider home loan trend