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For many Australians, rate hikes and inflation have made the dream of property ownership feel ever more distant. But a recent analysis shows that meeting mortgage repayments could actually be cheaper than renting for more than a third of Australian properties.

Look, we get it. Often the biggest obstacle in the way of home ownership is saving up for a deposit.

But once you’ve got that sorted – which we’ll help you tackle below – a recent CoreLogic analysis found servicing a mortgage was more affordable than average rent prices in 518 Australian suburbs. In fact, in some areas there were savings of over $900 a month.

Not to mention that with rental prices surging by about 10% across Australia over the past year and vacancy rates at a record low 1.1%, home ownership has possibly never looked more appealing!

So we’ve got some tips to help you switch from renter to homeowner in a timely (and confident) way.

Take advantage of the buyer’s market

Buying now or in the near future could mean less competition for properties, price drops and sellers willing to negotiate.

And recent rate hikes mean that, even during the spring selling season, we’re seeing fewer buyers. In fact data shows the median number of days that properties sit on the market is now 35, compared to 20 days last year.

And in response, property prices are falling. September data showed a 1.4% drop.

So by shopping around in the right areas and putting your negotiator hat on, you may get a price that could make buying cheaper than renting.

And most importantly, buying property and making mortgage repayments can create equity for you … instead of your landlord.

Get in on government schemes

There’s no denying that saving a big enough deposit to buy can be a bit of a slog.

But what if there was a way to sidestep the standard 20% deposit? And possibly avoid stamp duty too?

There are a number of government schemes you may be eligible for that can fast-track house buying by an average of 4 to 4.5 years.

The federal government offers low deposit, no LMI loans for eligible first home buyers, single parents and regional first home buyers.

Also, all state governments (except South Australia) have first home buyer stamp duty concessions for those eligible.

And you can stack these schemes together for more bang for your buck.

But you’ll have to move quickly on the no LMI schemes – they’re allocated on a first-come, first-served basis every financial year.

Give us a bell

Keen to make the leap from renter to home owner? If so, you’ll be busy researching the market and learning the art of the deal – so why not get a helping hand with your finances?

We can help find the right loan for you and provide you with helpful guidance that could increase your chances of mortgage application success.

And while we’re at it, we can assist you in applying for any money-saving government incentives you may be eligible for.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Whether it’s your love life or your home loan application, no one likes getting rejected. There are many reasons why it could happen, and some can come as a big shock. So today we’ve outlined five surprising reasons to help you avoid home loan heartbreak. There are few words would-be home buyers dread more than: “your home loan application has been rejected”. It can feel like a real kick in the guts. And some of the reasons can be surprising. A rejected loan application can hold up your home-buying plans and could have a negative effect on your credit score. So it can be important to avoid this scenario. Below we’ve outlined five reasons your next application could be rejected – so you can start heading them off now.

1. Spending too much or too little

Most people know that spending too much is a major red flag for lenders. So limiting your unnecessary expenses is important. But drastically slashing costs and living a very meagre existence can also be a concern. Lenders can see this as unrealistic and unsustainable, and they can remedy it during assessment by applying the household expenditure measure (HEM) instead. HEM is a standardised benchmark used to estimate annual living expenses. And if your standard, reasonable budget is on the super savvy frugal side, there’s a chance HEM may be higher.

2. Credit cards

Having multiple credit cards and performing several balance transfers can affect your application. Every time you apply for credit an inquiry is logged on your credit history. And lenders will likely take notice. Even your “just in case” credit card can have an impact. You may need to prove you have the means to pay off the limit within three years, even if the balance is $0.

3. By now pay later services

‘Tis the season for shopping. And buy now pay later (BNPL) schemes will be rolling out the red carpet. But it might be worth resisting the temptation. The Australian Prudential Regulation Authority (APRA) amended its framework this year to include BNPL debts in the reporting of debt-to-income (DTI) ratios. Lenders will likely include BNPL debt in your DTI ratio to see your total debt in relation to your income. And a high DTI can result in limited borrowing capacity or even rejection.

4. Credit history

Your credit history is a finicky thing. Even a few late payments can cause your credit score to drop. So it’s important to make sure your bills are paid on time. Also, applying for too many credit cards or other loans can impact your credit score, and therefore your home loan application. And with increasing news of scams, data breaches, and identity theft … it’s a good idea to check your credit history health. You can request a free credit report once a year from one of three national credit reporting bodies which are listed on this government website.

5. Your type of income

Your type of income could make or break your application. Lenders typically favour traditionally employed applicants with a steady and reliable income. Many lenders consider self-employment carries a greater risk for less consistent income, and some can reject applications on these grounds. So if you’re self-employed, when applying for a home loan it’s important to target lenders who are more open to lending to small business owners (we can give you the down-low on this). Also, word on the street is that tax debt is increasingly becoming an issue for self-employed applicants. So if you have a large tax debt, it might be worth getting on top of that if you can.

Get in touch

If you’re not the kind of person who likes being rejected, well, the good news is that we’re not the rejecting type. We’d love to have a chat about your home-buying dreams to see if we can match you with the right loan and lender for you. Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

It’s the hope that kills you. Just ask Carlton fans, NSW Blues supporters, Wallabies sufferers, and hopeful homebuyers who have fallen victim to underquoting. Obviously, you can’t change your footy team, but you can follow these tips to avoid the sketchy real estate practice. If it hasn’t happened to you, it’s probably happened to someone you know. You find a dream home that appears within your budget, you get your finance pre-approved, you get your hopes up, and … you get blown out of the water come auction day because the agent has underquoted the property. But hang in there – all is not lost, as we’ll touch upon below.

What is underquoting?

Underquoting is the misleading practice of advertising a property with a price guide that suggests to hopeful buyers that it could sell below market value, or for less than what the agent knows the vendor will accept. Accusations of underquoting have been rife in recent times, as national property prices have soared 24% over the past year alone. Now, there’s no doubt that some agents out there have been intentionally underquoting properties to drum up interest. But not always. Real Estate Buyers Agents Association (REBAA) president Cate Bakos says on many occasions selling agents get blamed unfairly for their reluctance to predict a strong competitive result, and in many circumstances, vendors exercise their right to change their price expectations without prior consultation with their agent. “Underquoting is amplified by a rising market,” adds Ms Bakos. Which means as property prices peak in Sydney and Melbourne, and the rest of the country starts to follow a similar trend, less underquoting should occur.

Why do agents underquote a property?

The main reason vendors and agencies underquote, explains Ms Bakos, is based on the belief that an underquoted property will attract more prospective buyers. It’s hoped that these buyers will fall in love with the property so much that they’ll find a way to compete against more cashed-up buyers, helping to push the property’s final price up in the process. “The reality is that many buyers find themselves shortlisting properties that are beyond their financial constraints, and this can lead to disappointment, wasted expenditure for building reports and due diligence, and lost opportunity,” says Ms Bakos.

Isn’t underquoting illegal?

Ms Bakos said while price guide legislation varied between states and territories, the problem was relatively endemic in many cities across the nation. She said while underquoting was illegal, there were still many legal loopholes that existed in current legislation, particularly in Victoria. “In Victoria for instance, vendors are not required to state their reserve price for an auction until moments before the auction,” says Ms Baokes. “And some offending agencies take advantage of this by pitching the property at a price lower than that of a reasonable price expectation or a realistically anticipated reserve.”

How to avoid becoming a victim of underquoting

Rather than rely on the price guide the real estate agent gives you, do your own homework. You can do this by looking at comparable sales within the last month or two (on websites such as Domain and realestate.com.au), and compare like-for-like properties and locations. “It’s an approximation, but it’s more helpful than living in the past and working off older, unreliable sales,” adds Ms Bakos. Here are the REBAA’s other top tips to avoid becoming a victim of underquoting: 1. Compare comparable properties by location, land size and condition. 2. Spend the months leading up to active bidding time (while obtaining finance pre-approval) to inspect, inspect and inspect as many properties and neighbourhoods as you can. 3. Look at other similar properties in the area and see what the agent’s initially-published estimate price range was; what the reserve price was; and what it finally sold for. 4. Consider consulting and engaging a REBAA-accredited buyer’s agent to take care of the process so you can “buy with confidence.” And last but not least, don’t forget to get in touch with us in advance to get your finance pre-approved. That way, come crunch time, you can spend less time on your finance application, and more time doing your homework to make sure the properties you’ve got your heart set on haven’t been underquoted. Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

It’s taking young couples roughly five years on average to save for a 20% home loan deposit, according to new research. Want to hear something crazy, though? We know how to quarter that timeframe… Real talk: it’s never been tougher to save up a deposit for your first home. In Sydney the average timeframe is 8+ years. In Melbourne 6.5 years. And most other places across the country, 4 to 6 years. That is unless you happen to know a finance professional who can help first home buyers purchase a home with just a 5% deposit – and not pay any lender’s mortgage insurance in the process. And how do we do that? Well, if you’re eligible, we can hook you up with the First Home Guarantee (FHG) scheme – which will release 35,000 places from July 1 (more on this below). By getting in early on this scheme and reserving a spot, you can quarter the amount of time it takes you to save up for your first home deposit.

Don’t believe us, check out these stats

Below you’ll see how long it’s currently taking first home buyers across the country to save for a 20% home loan deposit (according to Domain data), compared to saving just 5%. Sydney: 8 years 1 month (20%), down to 2 years (5%). Melbourne: 6 years 6 months (20%), down to 1 year 7 months (5%). Brisbane: 4 years 10 months (20%), down to 1 year 3 months (5%). Adelaide: 4 years 7 months (20%), down to 1 year 2 months (5%). Perth: 3 years 7 months (20%), down to 11 months (5%). Hobart: 5 years 10 months (20%), down to 1 year 5 months (5%). Darwin: 4 years 3 months (20%), down to 1 year (5%). Canberra: 7 years 1 month (20%), down to 1 year 9 months (5%). Combined capital cities: 5 years 8 months (20%), down to 1 year 5 months (5%). Combined regionals: 3 years 10 months (20%), down to 11 months (5%). Australia-wide: 4 years 5 months (20%), down to 1 year 1 month (5%). So if you’ve been saving towards a 20% for at least a year, you could be ready to hit the ground running when the 35,000 FHG schemes become available on July 1.

Tell me more about the First Home Guarantee scheme!

Ok, so the First Home Guarantee scheme (previously the First Home Loan Deposit Scheme) allows eligible first home buyers to build or purchase a home with only a 5% deposit, without forking out for lenders’ mortgage insurance (LMI). This is because the federal government guarantees (to a participating lender) up to 15% of the value of the property purchased. Not paying LMI can save buyers anywhere between $4,000 and $35,000, depending on the property price and deposit amount (it’s also worth noting that property price caps apply). But places in this scheme are on a first-come, first-served basis. So don’t let the recent expansion to 35,000 spots lull you into a sense of complacency. They’ll go fairly quickly, which means if you’re interested you’ll want to get in touch with us asap to ensure you’re ready to lodge the application come July 1. Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Property prices are predicted to fall over the coming year, but it’s always hard to know exactly when they’re going to start trending back up again. So if you’re interested in taking advantage of the dip, it could pay to start preparing now. Earlier this year, Domain’s June 2022 Quarterly House Price report showed national property prices were starting to slightly dip. And ANZ economists are predicting a 15-20% drop by the end of next year, before starting to recover in 2024 (prices never seem to dip for too long!). So how can you prepare to take advantage of lower prices if you’re in the market to buy? Here are our top five tips to help you get ahead of the curve.

1. Start researching the market now

Think about what you’re looking for in a property. Where do you want to live and what features are you looking for in a home? What can you realistically afford? Then start researching market prices on realestate.com.au or Domain so you can compare similar properties in your preferred locations. This gives you a benchmark to aim for while you’re saving your deposit, and when the time comes, you’ll be able to tell if the home you’ve set your eyes on is a great deal or not.

2. Keep your tax returns up to date

Having your tax returns ready to roll is a crucial step in the mortgage application process. Before a lender can approve your application, they need to know all about your income and ability to meet repayments. Your financial picture helps lenders to assess the risk of lending you money and what your borrowing capacity is. Some accountants have a four to six week lead time on completing tax returns – not to mention the time it takes for you to get your paperwork together and get an appointment – so if your tax returns aren’t up to date, best to get onto it now.

3. Start reducing unnecessary expenses

Lenders also like to see whether you’re a splashy spender or savvy saver. It’s all about assessing the risk of lending you a hefty sum. Go through your expenses and see where you can trim the fat. Excessive streaming services, too many takeaway meals, unused memberships and such can add up. You don’t have to become a full-on minimalist. But tweaking your expenses can make you look good to lenders. And the savings you unlock can go towards your deposit, which brings us to our next point…

4. Build up a deposit with genuine savings

Now that you’ve got an idea of market prices, you can work out how much you’ll need for a deposit. Generally, a 20% deposit is regarded as a great savings goal, but there are certainly ways to get into the market with as little as a 5% deposit, such as the federal government’s First Home Guarantee. Whatever deposit amount you’re aiming for, don’t forget to factor in a little extra to cover purchasing costs such as conveyancing fees, building inspections, and stamp duty. Lenders will look for a portion of your deposit to consist of genuine savings – at least 5% of the purchase price. Some of the more commonly accepted examples of genuine savings are: – Accumulated funds or regular deposits in a savings account in your name for at least 3 to 6 months. – Term deposit savings accounts held for at least 3 months. – Shares or managed funds held for at least 3 months. – Rental history for the past 6 months.

5. Assess your borrowing capacity or obtain pre-approval

Knowing your borrowing capacity or getting your finance pre-approved gives you a great insight into your borrowing limit. After all, you likely won’t know what kind of home you can afford to buy if you don’t know how much you can borrow. And that’s where we come in – we can help you assess your borrowing capacity or obtain finance pre-approval. So if you’ve got your eye on buying during the predicted dip over the next year or so, reach out today and we can help you start planning ahead. Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

They say all good things come to an end, and that includes your ultra-low fixed-rate home loan period. So what can you do to ensure a smooth transition?

With the past couple of years offering historically low interest rates, many Australians have been able to lock in an ultra-low fixed-rate home loan.

In fact, in July 2021, a whopping 46% of home loans taken out that month were fixed, which the ABS says was the peak period for fixing.

That means the peak time for borrowers rolling off their fixed-rate period will be between July and December 2023, according to RBA research.

And that time is fast approaching.

A looming fixed-rate cut off date can be daunting, particularly in the face of recent interest rate hikes. But you do have a few different options available, namely the three Rs: reverting, refixing and refinancing.

Reverting

If your fixed period ends and you haven’t made other arrangements, typically your loan will revert to the standard variable interest rate.

And this is set to give many home owners around the country a bit of a rude shock if they don’t start planning ahead.

In fact, RBA deputy governor Michele Bullock has warned that half of fixed-rate loans may face an increase in repayments of at least 40% when they roll straight onto a variable mortgage rate around mid-2023.

So before your fixed period ends, get in touch with us and we’ll help you explore your options. Which takes us to our next points – refixing and refinancing.

Refixing

Depending on the terms and conditions of your mortgage, you may be able to refix your loan with your existing lender.

It’s worth noting though, that due to the official cash rate going up dramatically over the past few months, it’s unlikely that you’ll be put on a fixed rate similar to the one you’re currently on. But there’s always the potential for negotiation.

The usual maximum time frame for fixing a loan is five years – but you can lock in shorter periods, too. So look into the current financial climate before deciding on whether to fix, and then the term length.

All that said, other lenders might be willing to offer you a better rate – be it fixed or variable – than your current lender, which brings us to refinancing…

Refinancing

If your current lender doesn’t want to come to the party, refinancing your loan elsewhere could potentially score you a better deal.

Rising interest rates have brought on record levels in refinancing. In fact, more owner-occupiers refinanced in June than ever before, according to ABS data.

This means the home loan market is highly competitive right now and lenders are keen for borrowers who have a good amount of equity and are on top of repayments.

If that sounds like you, then it’s certainly worth exploring your options, which we’d be more than happy to help you do.

How to start preparing now

If you’re coming off a fixed-rate loan in the near future, there are other steps you can also take to smooth the transition.

First and foremost, start planning ahead now. That includes building up a buffer of savings to cover higher repayments each month and if things are looking tight, cutting back any unnecessary expenses.

Last but not least, get in touch with us well in advance of your fixed rate ending, so we have plenty of time to model different options for you – whether that’s reverting, refixing or refinancing.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

You’ve probably heard that interest rates are on the rise and national property prices are on the way back down. Here’s how you can kill two birds with one stone: by refinancing to unlock equity and giving your home an energy-efficient makeover at the same time.

Did you know that energy-efficient homes generally attract premium prices and sell faster than non-eco listings?

That’s according to the 2022 Domain Sustainability in Property Report, which found an energy-efficient house in the median range sells for $125,000 more (+17.1%) on average than a non-sustainable house.

The results are quite good for apartment owners too, with energy-efficient units selling for $72,750 more (+12.7%) than non-energy-efficient apartments.

Dr Nicola Powell, Domain’s chief of research and economics, says more and more sellers are addressing the demand for eco-friendly homes, as online listings with popular eco features attract 8.7% more views on average.

“More than half of all for sale listings in all states and territories contain energy-efficient keywords,” she says.

Installations that are popular with potential buyers

Here are the top three eco features popular in house listing searches right now.

1. Solar power: Australia has no shortage of sunshine. And there’s no shortage of demand for houses with solar panels either. A 2020 Origin Energy survey showed 77% of Australians view houses with solar panels as being more valuable. And 55% of renters said they would consider paying increased rent for solar panels.

2. Water tanks: if you have a sizable garden or lawn, a sustainable irrigation system can help keep your water bill down. Make use of the rainy season by collecting water in tanks. When the dry season hits, you’ll be prepared with free, nutrient-dense rainwater to lavish on your garden.

3. Insulation and glazing: window glazing and insulation can help stop your heating and cooling efforts from leaching out. You’ll also reduce the summer heat and winter chill invading your home.

Financing your eco reno

Depending on your situation, many lenders now offer green loans to help homeowners install environmentally sound features – and the good news is that lenders usually offer lower interest rates on green loans in an effort to encourage sustainability.

Another option at your disposal is to unlock the equity in your home to fund your eco reno.

And it’s not a bad time to consider doing so, as property prices increased 23.7% in 2021.

So how does ‘unlocking equity’ work?

Well, let’s say you bought an $800,000 house three years ago that, due to last year’s property price surge, is now worth $1 million.

And let’s also say you took out a $600,000 loan for that house, which you’ve managed to pay down to $500,000 (hurrah!).

By refinancing that $500,000 loan into a $700,000 loan (70% of your property’s new market value), you can unlock $200,000 in equity to help fund a deposit for your renovations.

It’s also worth noting that banks will typically let you borrow up to 80% of a property’s market value.

And don’t forget to check out any government rebates that may be available for eco your installations.

Get in touch today

If all of this seems confusing, don’t fret! We’re more than happy to help you navigate loans, equity, and refinancing for your eco reno.

And if you decide to proceed, the good news is that part of the process can include refinancing your home loan.

Why’s that good news?

Well, just because interest rates are going up, doesn’t mean you can’t scope out a better deal on your mortgage. Competition amongst lenders remains fierce, particularly if you have a decent amount of equity and a strong track record of meeting your mortgage repayments.⁣

So if you’d like to discuss your reno and/or refinancing options, get in touch today.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Thinking about refinancing? As interest rates rise, so do the hurdles you need to clear. Here’s why you might want to look at refinancing soon to avoid potentially missing out.

When was the last time you refinanced?

If the answer is “never”, or you can’t actually remember, there’s a good chance you’re paying a higher interest rate than you could be due to the “loyalty tax”.

You see, the banks don’t think you’re paying attention, and as such, they only offer their lowest rates to new customers in a bid to win them over – as proven by the RBA.

In fact, a recent RateCity analysis found that customers who stay loyal to their bank could be hit with an extra $5,101 in interest over the next three years alone (based on a $500,000 loan taken out with CBA in 2019).

For a $750,000 loan that would be an extra $7,652 in interest, and for a $1 million loan it’s $10,202 extra.

This is a big reason why owner-occupier refinancing across the country rose 9.7% in June to a new record high of $12.7 billion, according to the Australian Bureau of Statistics.

Great. But why is refinancing now so important?

Ok, so when you refinance, your new lender must assess something called your “home loan serviceability”.

Basically, that’s your ability to meet your home loan repayments at an interest rate that’s at least 3% above the rate you’re being offered.

And as you might have seen on the news, the big four banks are tipping the RBA’s official cash rate to increase from 1.85% in August to anywhere between 2.60% (Commbank forecast) and 3.35% (ANZ forecast) by November.

That means as interest rates go up, so too will the hurdle you’ll need to clear for home loan serviceability when refinancing.

All in all, that means the sooner you refinance, the lower the hurdle you’ll need to clear to ensure you’re not stuck with your current rate and lender.

How to explore your refinancing options

This is the easy bit! Simply get in touch today and we’ll help you get the ball rolling.

And even if you don’t want to refinance with another lender, there’s always the option of asking your current lender to review your rate, indicating that you’re prepared to refinance if they don’t come to the table.

After all, loyalty should be a two-way street!

So if you’d like to find out more about what options are available to you, give us a call or flick us an email today – we want to help you through the period ahead as much as we possibly can!

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

The Reserve Bank of Australia (RBA) has increased the official cash rate by another 50 basis points to 1.85%. Here’s how to hang in there and keep up with all these monthly cash rate hikes.

Another month, another RBA cash rate hike – that’s four months in a row now!

It’s hard to believe that at the beginning of May the cash rate was just 0.10%. Today, it was increased to 1.85%.

RBA Governor Philip Lowe said in a statement that today’s increase was a further step in the normalisation of monetary conditions in Australia.

“The increase in interest rates over recent months has been required to bring inflation back to target and to create a more sustainable balance of demand and supply in the Australian economy,” said Governor Lowe.

“The (RBA) board expects to take further steps in the process of normalising monetary conditions over the months ahead, but it is not on a pre-set path.”

If you’re having a little trouble hanging in there, below is a condensed version of an article we put out last week to help you alleviate some pressure on the household budget.

1. Build up a buffer

There are no two ways about it – interest rates will only continue to climb in the months ahead.

That means it’s important to start planning ahead now, if you can, by building up a buffer.

This usually includes putting extra money into an offset account, redraw facility, or savings account – usually a facility that’s attached to your mortgage or easy to access.

2. Reduce expenses

Stan, Netflix, Spotify, Amazon, Audible, Apple TV, Disney, Paramount+, Kayo, Binge … how much do you spend on subscriptions each month? And how many can you cut out?

Next on the hit list: takeaway coffees. Six takeaway coffees a week costs you about $120 per month, or $240 per couple.

Instead, you can brew your own (barista-quality) coffee at home for $30-$70 a month.

And if you can, try to cut back on takeaway meals – they can really add up over time and home-cooked meals provide more leftovers for lunch the next day, too.

3. Shop around

A recent Choice study found Aldi to be the cheapest grocery store. Failing that, this ING survey found the average Australian family saves $114 a month simply by doing their grocery shopping online.

And don’t forget to look around for better deals on your car insurance, pet insurance (sorry Rex!), home insurance, utilities, your phone bill, and your internet bill.

4. Refinance

If you haven’t refinanced for a while, there’s a decent chance you could get a better rate on your home loan.

And you may want to get the ball rolling sooner rather than later.

That’s because lenders need to stress test your ability to meet your home loan repayments at an interest rate that’s at least 3% above the loan product rate you’re being offered.

So as interest rates go up, so too will the hurdle you’ll need to clear to pass that test (aka home loan serviceability).

Another option to consider is consolidating multiple loans – such as a car or personal loan – into your mortgage to reduce your monthly expenses.

Similarly, you can also consider refinancing to extend the term of your mortgage, which could help reduce your monthly repayments.

Both these options come with a downside, however, as by extending them you’ll pay more interest on the loan than you would’ve otherwise (ie. car loans are shorter than home loans).

But if you need cash flow now they can be an option to get you out of a jam.

5. Come and speak to us

Last but not least, if you’re concerned about what’s going on with interest rates, inflation and/or how you’ll meet your home loan repayments, please don’t hesitate to get in touch with us.

Everybody’s situation is different. And we understand many of the ideas we’ve listed above might not suit your financial and personal situation.

So if you’re worried about how you’ll meet your repayments in the months ahead, give us a call today. We’d love to sit down with you and help you work out a plan moving forward.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Seven in 10 homeowners have recently used the equity in their home to renovate, invest in property or shares, or boost their superannuation. Have you thought about how you could take advantage of last year’s property price spike? You might have heard that property prices spiked 23.7% in 2021, yeah? That’s quite the growth spurt! So how do you take advantage of that growth without (or before) selling your home? Well, one way to do so is to cash out equity while property prices are high (which we’ll explain in a little more detail below). According to NAB research, three in 10 mortgage holders have recently done just that and have used the money to give their home a facelift by renovating. Other popular options include using unlocked equity to buy an investment property (16% of homeowners), invest in shares (12%) and boost super balances (8%).

So how does ‘cashing out equity’ work?

It might sound complicated – but we promise it’s not. Let’s say you bought an $800,000 house three years ago that, due to last year’s property price surge, is now worth $1 million. And let’s also say you took out a $600,000 loan for that house, which you’ve managed to pay down to $500,000 (you little beauty!). By refinancing that $500,000 loan into a $700,000 loan (70% of your property’s new market value), you can unlock $200,000 in equity to help fund a deposit for your renovations or to buy an investment property. It’s also worth noting that banks will typically let you borrow up to 80% of a property’s market value. So if you upped the ante and refinanced to an $800,000 loan, you’d be able to unlock $300,000 in equity.

Want to find out more about unlocking the equity in your home?

If it still all sounds a little confusing, don’t stress, we’d be more than happy to sit down with you and help you work out how much equity you can unlock. And if you decide to proceed, the good news is part of the process can include refinancing your home loan. Why’s that good news? Well, just because interest rates are going up, doesn’t mean you can’t scope out a better deal on your mortgage. Competition amongst lenders remains fierce, particularly if you have a decent amount of equity and a strong track record of meeting your mortgage repayments.⁣ So if you’d like to explore your options when it comes to unlocking the equity potential in your home, get in touch today – we’d love to help you crunch the numbers. Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.