Market Update – May 2016

As you know, the RBA has cut the cash rate by 0.25% recently.iStock_000003281204_Large

Most of the lenders have passed on the full 0.25% reduction on their variable home loan products. E.g. CBA from 20/5, Westpac from 23/5, St George from 23/5 and ING from 20/5. ANZ reduced their standard variable rate by 0.19% from 13/5.

Special Offers

ANZ also has recently introduced a new 2 year fixed rate home loan for owner occupiers at 3.75% (comparison rate 4.87%).

St George has introduced a new 2 year fixed rate home loan for owner occupiers at 3.75% and for investors at 3.99%. The comparison rate is available on St George’s website. Once the fixed rate period ends, the variable discount needs to be negotiated manually.

CBA guarantees to beat currently advertised 1-5 year fixed home loan rates from NAB, ANZ, Westpac and St George by 0.01%. To take this offer (and if your loan is not on a fixed rate at the moment), you have to contact your Loans Advisor and they must lodge a special pricing application. The loan must be fully approved by 30/06/2016. We will explain to you the pros and cons before you decided to fix the rate.

Some lenders are still offering cash back for limited time only (NAB $1500, CBA-St George-Westpac $1250) – conditions apply.

In addition to the above, Newcastle Permanent have an additional non advertised special which will be available for a limited time, utilising a low cost parcel of funds that they have acquired.

Details of the Offer are as follows;

  1. 3.74% variable rate (comparison rate 4.10%) – Premium Plus Package. Further discount might be available for limited time only. Contact your Loans Advisor for more information.
  2. Minimum new loan amount $500,000
  3. Maximum LVR 90% inclusive of LMI
  4. Owner occupied security only

This particular variable rate pricing combined with their current 3.64% fixed 2 year rate (comparison rate 4.82%) presents as a very attractive proposition to prospective borrowers. To be eligible, total new borrowings must exceed $500,000, which can be a mix of variable and fixed. The variable component does not need to exceed $500,000.

For more details on this offer, please contact your Loans Advisor.

And lastly… If your loan has not been reviewed for more than 1 year, please contact your Loans Advisor and we will shop around and compare the products and negotiate a better rate for you.

Important Tip

When the interest rate on your loan goes down, if you are paying Principal and Interest, your current repayment does not go down automatically.

You need to call the bank if you want to reduce your repayment to the minimum.

If you can afford to keep paying at the current repayment amount, you can continue paying the same amount.

By doing this, more of repayments will go towards the principal, which means you will pay off your loan sooner.

Tax Time

The end of financial year is coming up fast. My fantastic Accountant, Harry Edwards from Bell Partners has summarised some key points around the changes announced in the 2016 Federal budget as well as some other tax tips.

Make sure you talk to your accountant to discuss your current and future investment plans.

Investment Market Update

Australian banks have effectively stopped lending to foreign buyers due to the high number of fraudulent applications.

There are a lot of foreign buyers out there who have purchased off the plan properties and now they are unable to get a loan here in Australia. This may have an effect on the apartment market in the months to come.

Having said that, the market is still very strong in some areas.

On Saturday, we went to an auction in West Ryde looking for a potential development site with a price guide of $1.8-1.9M. There were 25 registered bidders and the property sold for $1.2M above the reserve price. The vendors were extremely happy.

As always, if you have any questions, please do not hesitate to contact your Loans Advisor.

Share this:

Contact Us Today To Discuss Your Options