It’s hard to imagine taking out a home loan with an interest rate of 17% per annum or higher, yet that was the reality for homebuyers in the late 1980s and early 1990s. And back then it would have been just as hard to imagine home loan interest rates of less than 3% p.a. The point is, ultra-low interest rates are not the norm, and while it might be tempting to load up on debt when interest rates are very…
Not so long ago one of the most effective, low risk wealth creation strategies to paying your mortgage off quicker was to use spare savings, either directly or via the well disciplined use of an offset account. If your mortgage interest rate was 8% per annum, that’s the effective, after tax investment return this strategy delivered, substantially reducing the term of the loan and delivering big savings on interest. But what about now? With home loans being offered at interest…
Let’s talk about home equity but first, the big picture. Retirees feeling the pinch of higher living costs, are reluctantly making difficult decisions as they draw dangerously close to outliving their retirement savings. A 2021 report released by the Association of Superannuation Funds of Australia (ASFA) found that 90% of Australians who died aged over 80 years had no superannuation savings – an alarming statistic given that our average life expectancy is currently 83.6. For many retirees, the family home…
Home ownership continues to be our Great Dream, yet according to domain.com.au, many of us are investing in bricks and mortar much later in life. So, what does it take to bring this dream to life with retirement looming? Here are some property tips from a financial advisor. There are many reasons you might purchase a home later in life: perhaps you’re starting fresh post-divorce, or you own a home and have decided to buy a second property to help…
With so much uncertainty surrounding who now has more control over setting mortgage interest rates – the Reserve Bank or the banks – it might be timely to think about your loans and whether they are structured to suit your needs into the future. One of the most obvious considerations for your home mortgage is whether a fixed or variable rate loan is best for you. Fixed rate loans Fixed rate loans are generally offered for terms of between one…
Ready to make the leap from renting to buying a home? Well, before you begin the search for your perfect home there are lots of questions to find answers to. Here are some of the big ones. Do you need to own your home? For most people home ownership remains part of the great Australian dream, but that’s changing. Renting offers greater flexibility and can be an economically viable alternative to buying a home. Weigh up the pros and cons…
One of the biggest financial commitments most of us will ever make is the mortgage on our home. So to save on your mortgage it is no surprise that adopting a smart mortgage strategy can be remarkable. Take this example… Our clients, Steve and Nicole purchased a home for $500,000 with a mortgage of $350,000 repayable over 30 years. With an initial interest rate of 4.00% and monthly repayments, they found they would be paying $251,543 in interest over the…
When considering a home loan, the first and often only comparisons made by most borrowers are the interest rate and fees charged, leaving out other features. Home loans come with so many options that it is worthwhile taking a look at the features of each loan to see which one suits your specific needs. Offset account The ability to save surplus funds within a separate bank account which can be used to offset the interest liability on your loan—saving you…
As it seems that home ownership moves beyond many peoples’ reach, the option of co-ownership is seeing many Australians getting into the property market and achieving their own Great Australian Dream. Co-ownership refers to a single property owned by two or more parties. Geared towards people unable to purchase a property independently, it involves pooling resources with others in the same boat, and getting a foot on the property ladder. Co-ownership has proven popular among: first home buyers; single parents;…
When choosing the right type of loan to suit your needs now and into the future, there are many factors to consider. What is the purpose of the loan? Credit cards provide immediate access to credit that can be used for many purposes, but the interest rate is high so they are best relied on only for short-term loans. If you need a larger loan to pay back over a longer period, consider a personal loan. These tend to be…