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July 2018 e-newsletter
Rates on hold
As expected, the Reserve Bank of Australia (RBA) decided to leave the official cash rate on hold at 1.5 per cent at their July meeting on Tuesday.
This month, it’s all good news for home-owners and those in the market for a new loan!
Next month (August) will bring us to a record breaking two-year period since the RBA moved on interest rates. Many Aussies are using this period to pay down their home loans.
Most local economists are still predicting the RBA will leave rates unchanged for the remainder of 2018. Some are even predicting there will be no RBA rate movements until 2020!
At the end of May, the average variable interest rate on home loans for owner occupiers remained at its lowest rate since 1965 (averaging 5.2 per cent comparison rate).
There are excellent deals currently available for those looking to refinance - and renovation season is here, so there’s no time like the present.
Even though the property market usually slows down during winter, there’s still plenty of housing stock up for auction this year. If you’re in the market for a new home or property investment please give us a call, as we’re ready to assist with a competitive deal to help you snap up a bargain!
Can your profession save you on your home loan?
When it comes to saving on your mortgage, some of you may not have to look further than your job. If yours is a profession that classifies you as a ‘low risk’ borrower in the eyes of lenders, then you may be entitled to special discounts.
The lucky ones
Accountants, lawyers and teachers are commonly eligible for home loan discounts, or particular loan types without fees, based on their professions. “The benefits differ depending on specific professions, it depends on what industry the lenders decide to target as it’s a constantly changing situation, so what’s here today may not be around tomorrow.
Doctors take the cake
Lenders have their own target lists of professions, but doctors are the big winners. They'll get waived Lender’s Mortgage Insurance, lower interest rates and, in many cases, banks will even go outside of their normal policy to get their loans approved. Some banks will also consider vets, dentists as well as physio therapists so best to confirm.
How the perks work
Simply being in a certain profession won’t automatically save you on your home loan. To qualify you must apply with a lender that offers your profession a special discount and meet that lender’s criteria. You’ll often need to provide evidence of membership of a certain industry body such as the Australian Medical Association. Waived LMI is usually approved without any problems if you meet the criteria, however you’ll need to negotiate to get a better interest rate as well.
Because lenders don’t publish these better interest rates, to benefit from the discounts it’s best to have your broker by your side. Not only will they know which lenders to apply to, they will also assist you with pricing requests and negotiating the best possible interest rate.
Get in touch to see if we can help.
Rates on hold
As expected, the Reserve Bank of Australia (RBA) decided to leave the official cash rate on hold at 1.5 per cent at their June meeting today.
The RBA has not moved on rates since August 2016, with the objective of stimulating inflation, employment and wages growth through rate stability. However, the Organisation for Economic Cooperation and Development (OECD) is now forecasting official rates should gradually start to rise in late 2018, as these RBA measures start to take effect.
Meanwhile, local analysts are anticipating that lenders will soon start to raise rates outside of RBA movements, due to the rising costs of borrowing. Interbank lending rates (the rates that apply to Australian banks when lending money to each other) are on the rise and are likely to affect home loan interest rates across the board.
If you’re concerned about how this potential rise in rates may affect you, please give us a call.
Winter is here and action in our property markets is starting to slow. Auction clearance rates and home values are weakening, so conditions are currently favouring buyers. If you’re in the market for a new home or investment property, please get in touch now to arrange pre-approval on your loan.
May 2018 e-newsletter
Investment Update - First Quarter 2018
April 2018 e-newsletter