The RBA has decided to once again leave the official cash rate unchanged at 1.5%

The Reserve Bank of Australia decided to once again leave the official cash rate unchanged at 1.5% with the last rate move back in August 2016. I’d like to share today’s rate announcement and the thoughts on why the Reserve Bank of Australia has made this decision.

With a combination of retail deflation (ie the price of retail goods falling) and continued weak wages growth still impacting economic growth, the Reserve Bank have signaled that we can expect to see rates where they are for the time being. They have indicated however that they expect the next rate move to be an increase and are concerned about the potential shock that this may cause the economy.

Rates remain constant now but it is important that you are prepared if they increase. There may be different rates available from our lenders, so your broker is always on hand to ensure you have the right financial solution for your current circumstances.

If you’d like to have a chat about what today’s news means for you and your finances, please don’t hesitate to get in touch with an AFG broker.

The RBA decided to once again leave the official cash rate unchanged at 1.5%

The Reserve Bank of Australia decided to once again leave the official cash rate unchanged at 1.5% with the last rate move back in August 2016. I’d like to share today’s rate announcement and the thoughts on why the Reserve Bank of Australia has made this decision.

With weak wages growth, continued low inflation and a lack of significant economic growth we can expect interest rates to remain where they are for the time being.

Even when rates are unchanged, the role of your broker remains the same. There may be different rates available from our lenders, so your broker is always on hand to ensure you have the right financial solution for your current circumstances.

If you’d like to have a chat about what today’s news means for you and your finances, please don’t hesitate to get in touch with an AFG broker.

Reserve Bank of Australia has again opted to leave the official cash rate on hold at 1.5%

The Reserve Bank of Australia decided to once again leave the official cash rate unchanged at 1.5% with the last rate move back in August 2016. I’d like to share today’s rate announcement and the thoughts on why the Reserve Bank of Australia has made this decision.

With wages growth remaining modest and concerns emerging around the impact retail deflation is having on the overall economy, interest rates are predicted to be steady for the majority of 2018.

Even when rates are unchanged, the role of your broker remains the same. There may be different rates available from our lenders, so your broker is always on hand to ensure you have the right financial solution for your current circumstances.

If you’d like to have a chat about what today’s news means for you and your finances, please don’t hesitate to get in touch with an AFG broker.

For 2018’s first announcement RBA has opted to leave the official cash rate on hold at 1.5%

With the new year underway, we’ve come to the first rate news for 2018. I’d like to share today’s rate announcement and the thoughts on why the Reserve Bank of Australia has made this decision.

In its first meeting of the year, the Reserve Bank of Australia decided to once again leave the official cash rate unchanged at 1.5%. The last rate move was in August 2016.

With inflation remaining well constrained, rates appear to be firmly on hold until at least late in the year.

Even when rates are unchanged, the role of your broker remains the same. There may be different rates available from our lenders, so your broker is always on hand to ensure you have the right financial solution for your current circumstances.

If you’d like to have a chat about what today’s news means for you and your finances, please don’t hesitate to?get in touch with an AFG broker.

For 2017’s final announcement RBA has opted to leave the official cash rate on hold at 1.5%

We’ve come to the final rate news for 2017, in what has certainly been a jam packed year. We like to share today’s rate announcement and the thoughts on why the Reserve Bank of Australia has made this decision.

The Reserve Bank of Australia decided to once again leave the official cash rate unchanged at 1.5% for the 16th consecutive month.

This was an outcome that was again widely anticipated by financial markets. With inflation well constrained the status quo could well continue deep into the next year.

Regardless of whether rates move up, down or stay the same, your mortgage broker’s role remains unchanged. Your broker is always on hand to ensure you still have the right financial solution for your current circumstances.

If you’d like to have a chat about what today’s news means for you and your finances, please don’t hesitate to?get in touch with an AFG broker.

10 reasons why borrowers need a mortgage broker

In an age when technology helps us research, shop and even – at times – think, we might wonder what other help we could possibly need when it’s time to buy our next home.

But, unless you have weeks of spare time and a brain that can store hundreds of home loans, plus their fees and conditions, and then match them to your situation, log off and set up a time to see a mortgage broker.

Here are 10 reasons why a mortgage broker is as valuable as ever:

  1. It makes financial sense. For the vast majority of home loans, your mortgage broker’s service is free. Lenders pay mortgage brokers a fee when they connect them to borrowers.
  2. Mortgage brokers work for you, not the lender. As keen as banks and credit unions might be to open their coffers, they have an equal interest (pardon the pun) in making as much money as possible from you over the life of your loan. A mortgage broker, on the other hand, will put your financial needs first and look for the loan that best suits your circumstances.
  3. Spoiled for choice. A mortgage broker has access to hundreds of loans from a long list of lenders – far more than you will encounter if you choose to go it alone. Mortgage brokers also have access to more boutique and wholesale lenders who don’t traditionally advertise to mum-and-dad property buyers, have some fantastic products and are eager for a slice of the mortgage market.
  4. Save your legs. Mortgage brokers will do the loan application leg work for you, not only making life easier but giving you a better chance of swift approval because your mortgage broker knows what’s required from the lender.
  5. After-hours service. Most mortgage brokers will come to you at a time that suits, an appealing selling point for busy professionals and families.
  6. Perfect match. Contrary to popular belief, banks generally like to deal with mortgage brokers because they put forward home buyers who meet all the lending criteria. It can often save higher-risk borrowers from being rejected and earning a red flag on their credit history.
  7. Avoid the pitfalls. Honeymoon offers, exit fees and fixed rates are just some of the terms that can confuse and confound. Your mortgage broker will take a long-term view and navigate through all the lenders’ fees, terms and conditions to make sure you’re not paying more than you should over the full life of your loan.
  8. Borrow within your means. You’re less likely to over-stretch and get yourself into financial difficulty down the track when you take out your loan through a mortgage broker. Where some lenders may allow you to borrow to capacity or offer a loan that’s not quite right for your situation, a mortgage broker will always recommend the loan that makes the most financial sense for you.
  9. Switching is simple. If switching lenders, either because you’re refinancing mid-loan or have bought and sold, your mortgage broker will manage the inquiries and all the paperwork. If buying a property, they will also often deal with your conveyancer or solicitor to keep things moving along.
  10. Get a health check on your existing home loan. At any time you request, a mortgage broker can scan the lending environment to make sure you’re still getting the best deal. And if your circumstances change, your mortgage broker can deal with your existing lender or find a new loan to meet your needs.

 

Reserve Bank of Australia has again opted to leave the official cash rate on hold at 1.5%

With celebrations for the race that stops a nation in full swing, the Reserve Bank of Australia has made this decision.

The Reserve Bank of Australia decided to once again leave the official cash rate unchanged at 1.5%. The rate has not changed since September 2016.

This outcome was widely predicted by financial commentators. With inflation seemingly well under control and the Sydney property market now showing signs of cooling, many are predicting that the next rate change may not come until well into 2018.

Regardless of whether rates move up, down or stay the same, your mortgage broker’s role remains unchanged. Your broker is always on hand to ensure you still have the right financial solution for your current circumstances.

If you’d like to have a chat about what today’s news means for you and your finances, please don’t hesitate to get in touch with your broker.

Official cash rate remains unchanged at 1.5%

After a weekend of football excitement, all eyes were on the Reserve Bank of Australia board meeting today where it was decided to once again leave the official cash rate unchanged for the 14th consecutive month.

With regulatory changes to investor lending appearing to have taken some heat out of the Sydney property market, in particular, the RBA continues to take a wait and watch approach due to modest growth and inflation forecasts as well as continued concerns around low wages growth and the impact of rising power prices on households.

Do you have any questions about your mortgage? An AFG broker can assist — if you haven’t already got one on your side we can help put you in touch.

The RBA has opted to leave the official cash rate on hold at 1.5%

With spring traditionally a busy time for the real estate market and for rate moves, all eyes were on today’s Reserve Bank of Australia board meeting, where once again it was decided to leave the official cash rate unchanged for the 13th consecutive month.

The RBA avoided the temptation to follow other developed economies and increase rates due to continued concerns around low wages growth and the impact of rising power prices on households.

Regardless of whether rates move up, down or stay the same, your mortgage broker’s role remains unchanged. Your broker is always on hand to ensure you still have the right financial solution for your current circumstances.

If you’d like to have a chat about what today’s news means for you and your finances, please don’t hesitate to get in touch with your broker.

Different loan types

Finding the right home loan is as important as finding the right property.

There are literally hundreds of home loans available, with new products emerging all the time.

An AFG broker can help you find a loan that suits your particular needs, help you complete the paperwork, professionally package it with your supporting documents and submit it to your chosen lender.

When you’re ready, ask your broker to call you to discuss next steps. Here’s a snapshot of the main types of home loans and some of their pros and cons.

Variable

Standard variable loans are the most popular home loan in Australia. Interest rates go up or down over the life of the loan depending on the official rate set by the Reserve Bank of Australia and funding costs. Your regular repayments pay off both the interest and some of the principal.

You can also choose a basic variable loan, which offers a discounted interest rate but has fewer loan features, such as a redraw facility and repayment flexibility.

Pros

  • If interest rates fall, the size of your minimum repayments will too.
  • Standard variable loans allow you to make extra repayments. Even small extra payments can cut the length and cost of your mortgage.
  • Basic variable loans often don’t come with a redraw facility, removing the temptation to spend money you’ve already paid off your loan.

Cons

  • If interest rates rise, the size of your repayments will too.
  • Increased loan repayments due to rate rises could impact your household budget, so make sure you take potential interest rate hikes into account when working out how much money to borrow.
  • You need to be disciplined around the redraw facility on a standard variable loan. If you dip into it too often, it will take much longer and cost more to pay off your loan.
  • If you have a basic variable loan, you won’t be able to pay it off quicker or get access to money you have already repaid if you ever need it.

Fixed

The interest rate is fixed for a certain period, usually the first one to five years of the loan. This means your regular repayments stay the same regardless of changes in interest rates. At the end of the fixed period, you can decide whether to fix the rate again, at whatever rate lenders are offering, or move to a variable loan.

Pros
Your regular repayments are unaffected by increases in interest rates.
You can manage your household budget better during the fixed period, knowing exactly how much is needed to repay your home loan.

Cons
If interest rates go down, you don’t benefit from the decrease. Your regular repayments stay the same.
You can end up paying more than someone with a variable loan if rates remain higher under your agreed fixed rate for a prolonged period.

There is very limited opportunity for additional repayments during the fixed rate period.
You may be penalised financially if you exit the loan before the end of the fixed rate period.

Split rate loans

Your loan amount is split, so one part is variable, and the other is fixed. You decide on the proportion of variable and fixed. You enjoy some of the flexibility of a variable loan along with the certainty of a fixed rate loan.

Pros

  • Your regular repayments will vary less when interest rates change, making it easier to budget.
  • If interest rates fall, your regular repayments on the variable portion will too.
  • You can repay the variable part of the loan quicker if you wish.

Cons

  • If interest rates rise, your regular repayments on the variable portion will too.
  • Only limited additional repayments of the fixed rate portion are allowed.
  • You will be penalised financially if you exit the fixed portion of the loan early.

Interest only

You repay only the interest on the amount borrowed usually for the first one to five years of the loan, although some lenders offer longer terms. Because you’re not also paying off the principal, your monthly repayments are lower. At the end of the interest-only period, you begin to pay off both interest and principal. These loans are especially popular with investors who plan to pay off the principal when the property is sold, having achieved capital growth.

Pros

  • Lower regular repayments during the interest only period.
  • If it is not a fixed rate loan, you have the flexibility to pay off, and often redraw, the principal at your convenience.

Cons

  • At the end of the interest-only period, you have the same level of debt as when you started.
  • If you’re not able to extend your interest-only period, you could face the possibility of increased repayments.
  • You could face a sudden increase in regular repayments at the end of the interest-only period.

 

Low Doc

Popular with self-employed people, these loans require less documentation or proof of income than most, but often carry higher interest rates or require a larger deposit because of the perceived higher lender risk. In most cases, you will be financially better off getting together full documentation for another type of loan. But if this isn’t possible, a low doc loan may be your best opportunity to borrow money.

Pros

  • Lower requirement for evidence of income. May overlook non-existent or poor credit rating.

Cons

  • You will probably pay higher interest than with other home loan types?or may need a larger deposit, or both.