interest rate

Property outlook

by Greg on February 18, 2016
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The following is a guest article by Jonathan Preston. The changing nature of financing properties, whereby it now costs more to borrow as an investor than as an owner occupier is negative for areas that were investor hotspots previously. A prime example of this is in western Sydney, where we saw strong investment in cheaper […]

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Interest Rates Impact Your Monthly Mortgage Repayments – But How Much?

by Greg on February 10, 2016
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Many people worry about how fluctuations in interest rates can impact their monthly mortgage repayments. The world of finance is forever changing, so increases and decreases in interest rates are important to consider when looking for a new mortgage. What Happens If Interest Rates Increase? While usually a good sign for the wider economy, rising […]

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Wishing won’t make a housing boom

by Chris Lang on June 13, 2012
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Despite Australian’s love affair for residential property, Australia’s housing market might just be losing friends at a faster pace than facebook. The latest loss is the Reserve Bank of Australia after governor Glenn Stevens said on Friday it should not “engineer a return to a housing price boom.” Speaking in Adelaide to the American Chamber […]

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Will this rate cut save the property market?

by Chris Lang on May 2, 2012
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As many of you know, yesterday the RBA cut the interest rate by half of one per cent. The motive was to ignite growth in the economy as a whole, and to try and reverse the downward trend in property prices, in particular. Is there a reason why the RBA should be worried about the property market?

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RBA decides to keep the rates on hold at 4.75 percent

by Chris Lang on June 7, 2011
RBA decides to keep the rates on hold at 4.75 percent

Anyone with a mortgage will appreciate today’s decision by the RBA to leave the official cash rate on hold, at 4.75 percent. As many home owners are already in arrears on their mortgage repayments, the last thing they need is another rate rise. This situation is very sad, especially considering that 3 years ago the […]

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Refinancing from Westpac or CBA? NAB will pay your exit fee, but…

by Chris Lang on February 21, 2011
Refinancing from Westpac or CBA? NAB will pay your exit fee, but...

As you may have heard, NAB has announced its decision to refund mortgage exit fees to new customers who choose to switch from Westpac or the Commonwealth Bank. What’s the big deal? A couple of things, actually. Mortgage exit fees are estimated to be $700 – $900, and in the short term an offer to […]

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Dealing with rising interest rates

by Chris Lang on November 4, 2010
Dealing with rising interest rates

The RBA decision to lift interest rates by 25 basis points from 4.50 to 4.75 didn’t come as a surprise – in fact many of us thought it was only a matter of time. But when the Commonwealth Bank decided to lift the home loan rates by 45 basis points, now THAT was a nasty […]

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Another interest rates rise and how it translates into our money

by Chris Lang on May 4, 2010
Another interest rates rise and how it translates into our money

Interest Rates RiseToday RBA has lifted the interest rates again, for the 6th consecutive time. I didn’t mention any of the previous rate rises on Homeiown (why bother when the mainstream media is covering it well anyway), but this time is different.

What is so different about it?

Well, firstly, this interest rates rise will push the Standard Variable Rate above the 10 years average, and this is kind of big deal. The 10 years average is 7.5% and after today’s RBA decision the new Standard Variable Rate goes up above that number. Of course all the banks are quick to pass that on.

Percentages, percentages… look all too small and insignificant, aren’t they?

How about a real life example. Take a typical 30 year housing loan of $300,000. Today, with the same loan, you would be paying $317 more a month compared to September last year.

You know what, forget September last year, and compare it to last month. From May on, assuming that interest rates are not going anywhere (which is probably unreasonable) you will be paying $51 a month more, that’s $612 a year. Which means that average first home buyer is now around $600 a year poorer.

“Today’s rate rise is tough for families and small businesses”, Federal Treasurer Wayne Swan admits, and as a consolation reminds us that the rates are still significantly lower than they were at their peak. What a joke. Let’s just hope that that we all get a pay rise to cover this extra expense – otherwise it could just wipe out that holiday we were planning off the calendar.

Ironic, isn’t it.

First we get stung by forever rising housing prices. Then, after we’ve paid whatever it takes to secure ourselves a home and got into a mortgage for the next 30 years, they say that the rise in house prices pushes inflation up and that deserves another interest rates rise. So there we are, having overpaid for the house, we now have to overpay for the mortgage as well.

And renters amongst us are in no better situation – they don’t even own an “asset” that appreciates with the housing market, but are paying higher rents because their landlords with mortgages are passing on the difference in their mortgage repayments.

What are higher interest rates doing to your family budget?

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Another interest rate cut – what’s in it for us?

by Chris Lang on December 3, 2008
Another interest rate cut - what's in it for us?

Even though I don’t do news in Homeiown, yesterday’s announcement just couldn’t be ignored. RBA slashed interest rates – another percent, reaching 4.25%. For those of you who are thinking “So what?” I’ll explain – this is a big deal, normally the interest rate is moving up and down by 0.25 percent and not as frequently as RBA has been doing since September, cutting the total of 3 percent. It took them 6 years to drive the interest rates up to the point where it was in September and only 3 months to drop it to the lowest point it has been in 18 years.

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Homebuyers and Homeowners: they cut the interest rate again, how much we save?

by Chris Lang on November 5, 2008
Homebuyers and Homeowners: they cut the interest rate again, how much we save?

This time, when they announced the third successive interest rate cut, I made an exception, because I want to explain what it means to the home buyers.

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