Delaying the decision to buy a home in hopes of interest rate reductions poses significant risks.

Frankly, with the number of buyers attending open house inspections increasing by around 30% month-on-month, as indicated by data from Raine & Horne, few are opting to take this gamble on interest rates.

Interest rate fluctuations often defy predictions, and potential reductions of the official cash rate by the Reserve Bank usually depend on a downward trend in inflation. For those seeking a home, whether as first-time buyers or upgraders, the speculation surrounding future rate cuts may prompt uncertainty about the ideal timing for making a property purchase. Let's weigh the pros and cons of waiting.

It's important to note that no one, not even the most experienced economists, can guarantee a decrease in interest rates. However, should rates decline, it could significantly enhance your borrowing ability. This could mean the difference between purchasing a higher-quality home or securing property in a more desirable location.

Furthermore, delaying your purchase until rates drop might increase the likelihood of passing a lender's "stress test." Lenders must assess whether you could manage mortgage payments if the loan rate were 3% higher than the rate, you're currently being offered(i).

The dangers of waiting for rates to fall

Delaying your purchase decision carries the main risk that prices will escalate. Australian real estate values have surged by 10.2% since January 2023, translating to approximately $71,832 in dollar terms. This upward trend has persisted despite successive interest rate hikes and cost-of-living challenges.

Forecasting house prices can be challenging but at Raine & Horne we anticipate continued growth in property prices in 2024. This expectation stems from Australia's remarkably constrained housing market supply and the potential for interest rate cuts that drive buyer confidence.

When is the right time to buy?

Navigating the uncertainties and potential scenarios can render it challenging for homebuyers to pinpoint the best time for purchasing. However, a straightforward solution exists.

The best time to buy a home is when you're ready.

Since purchasing a property represents a significant financial undertaking, it's crucial to be at ease with this decision and to ensure your finances are well-prepared to handle a home loan. Obtaining preapproval for a home loan, with the guidance of a financial expert like Our Broker, can provide peace of mind.

The Reserve Bank of Australia (RBA) has chosen to maintain the cash rate at its first 2024 meeting this month, likely signalling the end of the repeated and substantial monthly rate hikes for home loan borrowers that started almost two years ago.

The RBA board's decision to leave the cash rate steady at 4.35% was a widely anticipated move that hopefully will bring a sense of relief to variable-rate home loan borrowers. These property owners experienced significant increases in mortgage repayments throughout 2022 and 2023.

At the same time, December's data indicates a two-year inflation-low, with the consumer price index (CPI) registering at 4.1% for the final quarter of 2023--below many economists' prediction of 4.3%.

Although still exceeding the RBA's target range of 2-3% inflation, the current rate of inflation represents a notable decrease from the peak of 7.8% recorded in the December quarter of 2022.

Steve Mickenbecker, a finance expert at financial comparison website Canstar, suggests that inflation is progressing toward the target range, and barring unforeseen reversals, the RBA's next cash rate adjustment could be a decrease.

Putting this conjecture to one side, the lingering question for variable rate borrowers revolves around when they can expect relief through rate cuts. Steve Mickenbecker speculates that a rate cut might be "at least six months away while some economists have suggested November or December for potential cash rate movements.

Craig Betalli, Senior Broker at Our Broker, says an earlier cut is not out of the question, noting that the inflation numbers affirm the toll of the RBA's aggressive rate hikes on spending and consumer confidence.

"If the inflation rate continues to decline in January and into the third quarter of this financial year, there may be motivation for the RBA to reduce rates before June.

"The extent of the rate reduction remains uncertain, but a range of 0.25% to 0.35% could be plausible, providing incremental relief to mortgage holders."

In the meantime, Craig urges borrowers to engage with their lenders directly or through finance specialists such as Our Broker to negotiate on interest rates and seek potential reductions.

That said, Craig advises borrowers to be careful about the risks when pursuing a direct approach when negotiating mortgage repayment arrangements with lenders.

"Making numerous enquiries about your lending and interest rates directly with a lender can have adverse effects on your credit score. Additionally, this approach may impact your credit file when applying for a loan or credit card in the future, as lenders may question the frequency of credit enquiries, interpreting it as a potential sign of financial difficulties."

Craig underscores that engaging with a financial expert such as Our Broker entails working alongside someone with a comprehensive understanding of the credit process. He asserts, "We understand the intricacies of pursuing a loan and negotiating interest rate adjustment and avoiding numerous, often futile requests that could negatively impact a borrower's credit score."

If you want an obligation-free mortgage health check before Easter, contact Our Broker today at 1800 913 677.

Australians may be facing a cost-of-living crunch but that hasn't stopped us tucking away savings at record rates. But are you making the most of your savings? Could you be better off parking spare cash in an offset account linked to your home loan rather than a separate savings account? We crunch the numbers to find out.

Despite high inflation and a string of rate hikes, figures from banking watchdog APRA show household deposits hit a record high of almost $1.42 trillion in September(1).

Part of the appeal of growing savings is the opportunity to earn a decent interest rate after years of low returns on deposit accounts.

But if you have a home loan, you'll get a lot more bang for your buck holding spare cash in an offset account linked to your home loan.

An offset account works like a regular transaction account linked to your mortgage. The big difference is that instead of earning interest on the balance, the value of the offset account is deducted from (or 'offset' against) your home loan when monthly interest charges are calculated.

By reducing the balance on which interest is based, the loan interest charge is reduced. Your monthly payment remains the same, meaning more of each repayment goes towards paying off the loan principal. In this way, stashing spare cash in an offset account helps you pay down the loan sooner.

How an offset can see you save

An example will show how an offset works.

Let's say Trish has a home loan for $500,000. She pays the average standard variable rate of 6.95%(2). Trish also has $20,000 in savings.

Option 1 - Trish holds her savings in a separate savings account.

Trish deposits her $20,000 savings into an account paying one of the highest base rates of 4.90%(3).

In the space of a year, Trish could earn $980 on her savings. The catch is that interest earnings are fully taxable. If Trish is a high income earner, she could lose almost half her interest earnings to tax.

On the other side of the ledger, in that same year Trish would pay approximately $34,750 in home loan interest.

Option 2 - Trish holds her $20,000 in an offset account

By using an offset account, Trish does not earn any interest on her savings.

Instead, the monthly interest charge on Trish's home loan is based on a loan balance of $480,000 ($500,000 less $20,000). In one year she would pay about $33,360 in mortgage interest.

That's $1,390 less than the $34,750 she pays without the offset.

Remember, the most Trish could earn on a separate savings account (before tax) is $980. So, Trish is at least $410 better off in just one year ($1,390 less $980) by storing her spare cash in an offset account. As no interest is physically paid to Trish, there is no tax impact on the home loan interest savings.

The upshot is that interest rates on loans are almost always higher than rates on deposit. That is how banks make money. So, you will save more in interest charges using an offset than you would earn in interest received on a separate savings account.

Like to know more about home loan offsets? Call the team at Our Broker on 1800 913 677.

(1)https://www.apra.gov.au/monthly-authorised-deposit-taking-institution-statistics

(2) https://www.canstar.com.au/home-loans/average-interest-rates-home-loans/

(3) https://www.canstar.com.au/savings-accounts/best-savings-account-interest-rates/

Following the most extended series of interest rate increases, which notably consisted of an unparalleled sequence of 10 back-to-back hikes, it seems that the Reserve Bank has holstered its metaphorical weapon of monetary policy tightening.

This viewpoint comes after the central bank left the official cash rate unchanged for two consecutive months. Many, including the financial markets economists from some of our biggest banks, believed that the RBA needed to fire one more shot in the form of a 250-basis point (.25%) increase in the battle to return inflation to its elusive 2-3% target band. Some economists also believed that Australia's low unemployment would prompt the RBA to move the official cash rate up again in August.

With the August decision now behind us, many now expect that the cycle of rate hikes is over as inflation continues to moderate and the economy slows over the remainder of 2023. In other words, the cash rate of 4.1% is expected to be the peak rate and that the RBA will pause any further moves this year.

Subsequently, as the economy begins to decelerate as higher interest rates start to trickle down into the mortgage market and small business lending. This anticipation suggests that the recently appointed RBA governor, Michele Bullock, and the governing board will consider a reduction in rates. Notably, the Commonwealth Bank goes so far as to project that the official cash rate could potentially settle at 3.1% by the end of 2024. The Commonwealth is even tipping the first rate cut could be as early as March.

If you're uncertain about how the changing interest rate environment will impact your financial situation, consider consulting a financial specialist like Our Broker. We can help you understand the potential effects on your mortgage, offer personalised advice based on your goals, and help you make informed decisions.

To discuss your financial position and find the most suitable mortgage for your needs, please contact Our Broker today at 1800 913 677.

Given soaring cost of living, which includes higher home loan interest rates, rising petrol prices, and increasing grocery bills, it is now more important than ever to closely monitor your financial expenditures.

Home & contents insurance is no different in this regard, as insurance premiums are on the upswing. According to analysis conducted by the comparison website Finder, certain home insurance policies experienced price hikes of as much as 104% in the past year.

Furthermore, a staggering 63% of Australian home & contents insurance customers, equivalent to 7.4 million people, reported a hike in their insurance premiums in the last 12 months. This trend highlights the importance of regularly reviewing and comparing your home & content insurance policies.

But before diving into the tips for saving on your insurance, let's revisit why having home & contents insurance is worthwhile. Home & contents cover provides a financial safety net that helps you deal with damages and incidents that affect your home and belongings. This coverage typically includes protection against events such as fire, theft, storm damage, and more. When you make a claim, your insurer steps in to cover the costs of repairs, replacements, and even the complete rebuilding of your property. However, it's crucial to remember that your policy will have specific conditions and only covers events explicitly mentioned in the policy document.

Why compare Home & Contents insurance?

There are multiple compelling reasons to explore different insurance policies, starting with the potential for savings. As mentioned previously, premiums can vary considerably among providers. When you compare policies, you might discover a more budget-friendly choice that still fulfills your coverage requirements.

Some insurance providers may offer higher limits on insurance claims, providing you with better coverage in case of a major incident. It's crucial to assess your coverage limits to ensure they align with your assets and potential liabilities.

Different policies offer various optional extras that can be tailored to your specific needs. By comparing policies, you can find a policy that better suits your situation, whether it's coverage for valuable artwork, electronics, or special items like jewellery.

It's a common misconception that loyalty pays when it comes to financial products such as insurance. The facts are that many insurance companies offer their best deals to new customers. This means that staying with the same insurer for years can lead to you missing out on significant savings.

Life is constantly changing, and your insurance needs may change with it. Buying a new home, getting married, having children, or accumulating valuable assets are all factors that may necessitate an update to your insurance policy. By comparing policies with the assistance of financial specialists such as Our Broker, you can make sure that your coverage adapts to your changing life circumstances without breaking the bank.

In a surprising move, the National Australia Bank (NAB) recently announced significant changes to its home loan interest rates, leaving many in the housing market wondering about the implications of these adjustments.

These changes came into effect on Wednesday, September 13, 2023, and have sparked speculation about the bank's motives and potential impact on the broader housing landscape.

What's new?

NAB's announcement encompasses two critical areas of change: adjustments to their Base Variable Rate (BVR) home loan product and revisions to their fixed interest rates for the NAB Tailored Home Loan.

Changes to Base Variable Rate Home Loans include cuts of 0.96% to the Owner-Occupier Principal and Interest loan with the new rate now 6.49%. In comparison, the Owner-Occupier Interest Only was trimmed by 0.33% leaving the rate at 7.69%. Landlords also won a haircut with Principal and Interest loans slashed by 0.96% to 7.01%, while the Residential Investor Interest Only loan has landed at 8.02% after a 0.33% cut. In comparison the owner occupied advertised variable rates were also reduced to 7.32%, which after negotiated discounts, leaves borrowers with a rate of around 5.8% and investment principal and interest rates of 6.1% after negotiation.

There were also changes to Fixed Rates for NAB Tailored Home Loans aimed at making the fixed rates more competitive, potentially attracting borrowers who seek stability in their mortgage payments. For example, - the 2 year fixed rate with an LVR of 60% or less is now 6.19%.

ANZ has followed its rivals lead by also cutting fixed rates across its 1- to 3-year terms for both owner-occupiers and investors by up to 0.30 percentage points. The bank cut its 1 year by 0.2 percentage points to land at 6.34%, while the two year is 6.24% after a 0.3% cut. The three year fixed is now 6.39% after being trimmed by a modest 0.1%.

Craig Betalli, a Senior Broker at Our Broker, suggests that while NAB's rate reductions make them the cheapest among major lenders for 2-year fixed rates, other factors have contributed to the rate cuts.

"The surge of first-time homebuyers, investors re-entering the market, and people seeking security amid economic uncertainties may be driving interest in fixed rates," he said.

But before diving headlong into a mortgage, Craig recommends that potential borrowers consider their options carefully. "I'd urge buyers to hold off on finalising your decision regarding fixed rates. For first-time homebuyers and investors, secure a variable loan preapproval, and once you've identified a property, decide whether to go with a variable or fixed rate loan with the advantage of a little extra time."

He continued, "For those contemplating refinancing into a fixed-rate loan, it's important to consider the loan amounts and the corresponding payments. Consider how much the repayment would truly fluctuate if interest rates were to rise or fall further and make a careful analysis of the risks involved with the help of a finance specialist such as Our Broker."

Moreover, Craig added that international factors such as economic instability in China and political and economic uncertainties in Europe and the US may have a downward influence future interest rate change.

If you are considering financing a property purchase or refinancing an existing mortgage this spring, contact Our Broker at 1800 913 677.

Indeed, this is the ideal moment to take control of your finances before football finals, the Melbourne Cup, and Christmas distract you from your financial goals.

1. Get the best home loan rate

Although the Reserve Bank appears to have paused any additional interest rate hikes, it's crucial to note that the official cash rate has surged from 0.1% in April 2022 to its present level of 4.1%.

But that's only part of the story as some lenders have implemented out-of-cycle increases, often by ten basis points here and ten basis points there. Given these changes, consider a refinancing strategy with the assistance of a financial specialist like Our Broker if your borrowing capacity permits. Even if you feel you have a borrowing capacity shortfall, with the help of Our Broker, you may find a lender who is happy to help you slash your mortgage costs through a refinancing strategy. This measure could serve as a valuable financial spring-cleaning strategy.

2. Manage your cash flow

Suppose you have a fixed-rate home loan with a low-interest rate secured a few years ago. If you're concerned about transitioning to a significantly higher variable rate, often called the 'mortgage cliff,' you'll be pleased to know that there are now interest-only loan options specifically designed for homeowners like you to help keep loan repayments down. As part of your financial spring clean, a specialist such as Our Broker can help you explore these tailored solutions and potentially set you up with the right mortgage that more closely matches your cash flow and budget.

3. Ensuring you have sufficient protection for your home?

With plenty of experts tipping that many parts of Australia could be impacted by bushfires this spring and summer, it seems it would be wise to have sufficient home and contents insurance. Most home and contents insurance plans typically cover fires, including bushfires, either as a standard feature or as an optional add-on. This implies that if your home is damaged or destroyed by bushfires, you may be eligible for compensation up to the sum insured to assist with restoration and repairs.

However, the extent of coverage your home receives depends on the specific terms and conditions outlined by your insurance provider. Different insurers may have varying interpretations of what constitutes a 'fire,' making it crucial to carefully review the precise terminology used by your insurer with the help of a finance specialist.

4. Debt consolidation

If you have too many debts charging higher interest rates, such as credit cards, car loans or even "buy now pay later" debts from ZIP and After pay, Our Broker can help you consolidate these liabilities into a cheaper rate, as part of your home loan.

Consolidating your debts helps you restructure your monthly payments into a more manageable and cost-effective arrangement.

This strategy should result in lower interest rates and a reduced monthly payment, enabling you to regain control of your financial situation and have peace of mind leading into spring and summer.

For more tips on spring cleaning your finances, please get in touch with Our Broker today at 1800 913 677.

By Craig Betalli, Senior Broker at Our Broker

AUGUST 11, 2023

Following the most extended series of interest rate increases, which notably consisted of an unparalleled sequence of 10 back-to-back hikes, it seems that the Reserve Bank has holstered its metaphorical weapon of monetary policy tightening.

This viewpoint comes after the central bank left the official cash rate unchanged for two consecutive months. Many, including the financial markets economists from some of our biggest banks, believed that the RBA needed to fire one more shot in the form of a 250-basis point (.25%) increase in the battle to return inflation to its elusive 2-3% target band. Some economists also believed that Australia's low unemployment would prompt the RBA to move the official cash rate up again in August.

With the August decision now behind us, many now expect that the cycle of rate hikes is over as inflation continues to moderate and the economy slows over the remainder of 2023. In other words, the cash rate of 4.1% is expected to be the peak rate and that the RBA will pause any further moves this year.

Subsequently, as the economy begins to decelerate as higher interest rates start to trickle down into the mortgage market and small business lending. This anticipation suggests that the recently appointed RBA governor, Michele Bullock, and the governing board will consider a reduction in rates. Notably, the Commonwealth Bank goes so far as to project that the official cash rate could potentially settle at 3.1% by the end of 2024. The Commonwealth is even tipping the first rate cut could be as early as March.

If you're uncertain about how the changing interest rate environment will impact your financial situation, consider consulting a financial specialist like Our Broker. We can help you understand the potential effects on your mortgage, offer personalised advice based on your goals, and help you make informed decisions.

To discuss your financial position and find the most suitable mortgage for your needs, please contact Our Broker today at 1800 913 677.

Pause on rates bodes well for winter and spring sales

The decision today by the Reserve Bank to leave the official cash rate at 3.6% not only provides homeowners with an early easter present but also augurs well for winter and spring real estate markets, said Angus Raine, Executive Chairman Raine & Horne.

The RBA's decision to press the pause button follows hot on the heels of CoreLogic's latest national Home Value Index (HVI), which recorded the first month-on-month rise since April 2022, up 0.6% in March.

"The RBA started increasing the cash rate in May 2022, and today's announcement is fantastic and gives homeowners with mortgages some respite," Angus said.

"The decision by the RBA, along with news that property values are returning to form once again puts the focus back on our favourite asset class."

Appraisals, listings and OFIs already up

According to the April Raine & Horne Monthly Property Report, appraisals (up 30%) and listings (43%) have already increased since January, while the number of groups attending open-for-inspections (OFIs) is also up by 23%.

"Even before the RBA paused rates, homebuyers were already active, and this bodes well for winter and spring markets," Angus said.

"The property drums are beating now that interest rate hikes have stalled, appraisals are up, and buyers are back in numbers at open for inspections."

Craig Betalli, Senior Finance Specialist from Our Broker, agreed that the cash rate pause would give borrowers welcome relief.

"The rate pause will provide more certainty for borrowers as it is now possible interest rates won't change for a while.

"This now makes it a great time to get a home loan preapproval with the assistance of your brokers as a first step to buying property.

"Also, those facing higher rates after coming off lower fixed rates and who were worried about their ability to meet their monthly mortgage repayments now might be in a better position to refinance with the assistance of their broker to secure a better deal from their lender."

Craig added, "Borrowers should keep an eye on fixed rates with the expectation that they may start to come down as the effects of the ten straight interest rate hikes begin to flow through the economy.

"So, our advice is not to fix your rate just yet and reach out to your broker for the best variable deal available."

By Craig Betalli, Senior Broker at Our Broker

JULY 7, 2023

Undoubtedly, property owners with mortgages would have experienced a sense of relief when the Reserve Bank made the decision to maintain the current interest rates.

Nonetheless, individuals with variable rate mortgages now face the dilemma of what course of action to take. According to most recent communication from the central bank, although inflation is on a downward trend, it is still considered relatively high. Consequently, there is a strong likelihood of further interest rate increases, potentially even one or two more hikes between now and Christmas. This would put variable rates at well over 6% before potentially coming back down in the new year.

The decision of whether to opt for a fixed or variable rate mortgage is made more challenging due to the compression of economic cycles. This is partly because consumer sentiment seems now more resilient and recovers at a faster pace compared to a decade ago. As a result, market cycles tend to be shorter, spanning 3 to 6 months instead of three to six years. So, looking forward, rather than experiencing distinct peaks and troughs, we expect more ripple-like trends that last for months rather than years. Unfortunately, the short-term focus of markets and interest rate cycles often works against the advantages of fixed-rate mortgages.

However, it is worth noting that you can still obtain fixed-rate loans ranging from 1 to 3 years starting at 5.64%. That said we have seen an upward trend with some lenders now charging 6.2%. The issue is that many experts are already suggesting that although there is still potential for rate increases, the cash rate may begin to decrease within a year, depending on global circumstances.

Therefore, if further rate increases will put pressure on the family budget and you can secure a fixed rate around 5.7% for 1 or 2 years, it might be worth considering this as an option. Otherwise, it would be beneficial to seek the assistance of a finance specialist such as Our Broker to find the best available variable rate loan.

To discuss your financial position and find the most suitable mortgage for your needs, please contact Our Broker today at 1800 913 677.

The latest data from Australian Prudential Regulation Authority (APRA) shows that commercial real estate lending has continued to grow over the last 12 months despite the shadow of higher interest rates and the challenges created by the pandemic.

According to the prudential regulator commercial property loans held by Australian banks increased by 12% compared to the June 2021 quarter. Total commercial property loan limits were $413.7 billion in June 2022 compared to $369.5 billion the previous year(i).

Craig Betalli, Senior Broker at Our Broker said he was not surprised by the result. "My view at the start of this rate rise cycle was that commercial property sales were going to peak as there's less emotion involved in these transactions than say buying a home," he said.

"Rather when it comes to a commercial property transaction the emphasis is on the return on capital. So as interest rates fell the leverage on the rental income translated into higher prices or growth in the commercial property sector."

Current lending trends

Craig says that despite a slight softening in new lending commitments, refinancing is driving the commercial property loan market. "There is no doubt that rates between 5 and 6% are attractive to current commercial property borrowers while the banks seem to still have an appetite for lending.

"Valuations are still stable but were coming in a bit under at the start of the rate rise cycle but with limited sales it's hard to tell."

With the urbanisation of some older industrial areas closer to Australia's CBDs it has meant a shortage of stock. Craig explained, "With more industrial and office space in cities such as Sydney being converted to residential, there's also a squeeze on commercial space in the suburbs as people try to find a workspaces closer to home."

For all your commercial property loan needs whether you're an investor or owner-occupier contact Our Broker on 1800 913 677.

(i) https://www.apra.gov.au/news-and-publications/apra-releases-quarterly-authorised-deposit-taking-institution-statistics-12

The mortgage market has become more complicated, and that Australia's biggest banks are shaking up their fixed home loan rates is just the tip of the iceberg of the complexity.

At the end of September, Commonwealth Bank cut its 3-year fixed rates for owner-occupiers and investors while increasing one and four-year rates. It's incredibly confusing and just another reason why almost 70% of residential mortgages are now written by finance specialists such as Our Broker, according to research from the Mortgage and Finance Association of Australia (MFAA)'s Industry Intelligence Service report (IIS)(i).

As for why fixed rates seem to be heading in different directions, Craig Betalli, a senior broker from Our Broker, says it's not entirely clear why this scattergun approach to rates is occurring. Perhaps lenders are attempting to balance their portfolios to have a smoother spread of shorter- and longer-term fixed rates.

With most borrowers currently opting for variable-rate home loans, it could be a marketing ploy to encourage some customers to consider a fixed rate. Cashback offers attract many customers to refinance their mortgages to variable-rate loans.

As Craig says, borrowers need assistance to get a better rate and find out if they can borrow enough for their new home or investment. Then there are the life events, such as how we prepare for having a child. How do we move forward after divorce, or how do we finance a renovation, a new business or help our children into property? Or what are the best ways to fund a car?

A finance specialist from Our Broker can suggest a range of products based on your situation, enabling you to compare several options rather than simply going with a lender you already bank with, for example. If you don't have the time to research home loan options, a mortgage broker can do that work for you.

If you're considering your next property move and would like to know your finance options, talk to Our Broker today on 1800 913 677.

(i) https://www.mfaa.com.au/news/latest-industry-intelligence-service-iis-report-published

A home loan pre-approval is an enquiry with a lender about the likelihood of you being lent a sum of money to buy a property. Moreover a finance specialist such as Our Broker can help you find the right lender so you get the best outcome for your property purchase.

Searching for a home to buy without preapproval makes it very difficult for you to know your borrowing capacity. You could be wasting your time looking at properties which are completely out of reach budget wise, or even looking at properties lower than your repayment potential. You could be missing out on your ideal property.

Getting a pre-approval in place should the first step in your journey to buy a home. It will put you on the right track to knowing what you can afford and hence, the suburbs you should be looking at. An Our Broker mortgage professional will confirm your monthly repayments as the pre-approval process also involves looking at your daily living expenses. This step ensures your home loan will be affordable, while taking into account life changes, such as starting a family. And it's all completed before you lodge a pre-approval application.

Pre-approval can take a couple of weeks to complete, depending on the banks' workload. To help make the process go smoothly, it is important to have documentation which confirms your identity, income, savings and spending behavior, as well as your previous loan history. Don't assume that because you have either a high income, or a lot of equity, that the bank will overlook cluttered savings or credit accounts.

A finance specialist from Our Broker will look at details of your savings and earnings, along with a proposed purchase price figure, and even the property you have in mind. They then lodge a pre-approval for the proposed purchase. Once approved your home buying journey can begin.

When the time comes that you have found the right property for you, a broker will instruct the bank to order a valuation to confirm the purchase price and the bank will then issue your approval as unconditional. You then have your new home or investment property secured.

While the cash rate is predicted to increase, the RBA have indicated there will be measured increases and it might not affect your borrowing position. However, with interest rates already being increased by the banks on a daily basis, it's important to have an up-to-date fully assessed pre-approval in place.

To enquire about getting a pre-approved home loan, contact Our Broker today on 1800 913 677.

Competition in the variable home loan space is heating up, as NAB today trims its base variable rate by 0.10% - but only for new owner-occupiers, according to the financial comparison website RateCity.

NAB's lowest variable rate is now 2.19%, aligning with big four bank competitors, Westpac, and ANZ. However, NAB offers this rate for customers with 20% deposits, unlike Westpac and ANZ, which require 30% or bigger deposits.

Interestingly, while dropping its variable rate, NAB increased its fixed rates for the sixth time in six months, noted RateCity. The bank raised its fixed rates by up to 0.50% for owner-occupiers and investors. Following these changes, NAB has only one fixed rate under 3%, at 2.74% for one year.

Financial specialist Craig Betalli, a Senior Finance Specialist at Our Broker, said "Until the latest cycle, the lenders used historically low fixed rates as the competitive battleground. Now, as the fixed rates have increased, they have decided to offer lower variable rates as a means of attracting greater market share."

According to Craig, it's a classic case of robbing Peter to pay Paul. "It seems that the lenders are using some of the profits from their fixed rate hikes to offer these discounted variable rates," he said.

RateCity.com.au research director, Sally Tindall, agreed, "While fixed rates are rising rapidly, there is still plenty of competition in the variable home loan market."

She continued, "NAB has bowed to the pressure and cut its basic variable rate to match its big bank competitors Westpac and ANZ," she said.

"Despite no change from the RBA, we've seen the average big four bank's basic variable rate drop by 0.35% in the last year, but only for new customers.

"For anyone on a variable rate, now is the time to haggle with your lender before the predicted RBA rate hikes begin," she said.

Craig Betalli added, "While the Reserve Bank hasn't touched rates for 17 months, homeowners might be able to give themselves a rate cut by shifting lenders to grab one of the lower variable rates with the assistance of a finance specialist such as Our Broker.

TO FIND A SUITABLE HOME LOAN WITH A VERY COMPETITIVE RATE AND FEATURES TAILORED TO YOUR NEEDS, CONTACT OUR BROKER ON 1800 913 677.

There is no doubt it is time for homeowners to consider the prospect of interest rate hikes, particularly after the Reserve Bank governor Philip Lowe failed to rule out an interest rate rise before 2024.

If you have a variable rate mortgage, the advice from Craig Betalli, Senior Broker with Our Broker, is that a "split rate loan" could be the shrewdest way to future-proof your mortgage against possible rate increases. A split rate loan lets you divide your mortgage between fixed and variable rate components. This strategy allows you to enjoy the best of both worlds - the certainty of a fixed rate and the features of a variable rate loan, such as a 100% mortgage offset, which enables you to pay down the loan faster.

However, whether you choose a split rate or a fixed-rate loan, you must decide how long you'll lock the rate in for whether it's 3, 4 or 5 years. As part of this decision-making, you must consider a myriad of factors such as what your borrowings are, what your cash flow looks like, whether your career or business prospects are likely to change over the next five years, and your age and family situation. Fortunately, a finance specialist such as Our Broker can help you work through these variables when deciding on the right mortgage strategy.

When selecting fixed rates, if you have the choice between a five-year rate, which is cheaper than a 3-year rate, then locking in for the half-decade is a no-brainer. However, when the 3-year rate is cheaper than the 5-year fixed-rate, you must work out the extra cost for the first 36 months and how you will make it up in the last two years of the five-year term. Obviously, to make the five-year fix a winning strategy will mean banking on the RBA increasing official rates. So, there are risks with this strategy that a mortgage broker can help you navigate.

At the same time, whether you choose a split rate or not, Craig urges homeowners to make hay while the sun continues to shine on historic low-interest rates. Every extra dollar you pay off your home loan now is a dollar less you'll need to pay when rates increase. Moreover, if you have a fixed rate and breach the extra repayments cap, consider parking any additional payments in a saving account. When you come off the fixed-rate, you can use these savings to make extra payments off the mortgage.

To find more about the best way to retire your mortgage debts, contact Our Broker today on 1800 913 677.

Whether you fix the interest rate on your home loan now or not depends on your goals, circumstances, and risk profile.

Probably the best time to get a fixed rate was about 5-6 months ago as fixed rates are now around 2.39% for two years up from about 1.8%. Alternatively, it's still possible to find variable rates as low as 1.94%.

The impact of the Reserve Bank

Whether you fix your home loan or not is also an extremely timely question, particularly with some commentators predicting as many as four rapid-fire official cash rate increases when the Reserve Bank decides to move. Assuming rates go up 0.25% each time, a principal and interest loan with a rate of 1.99% could jump to at least 2.99%. This increase would add $400 a week in mortgage repayments on a $600,000 balance with a 30-year term.

However, the Central Bank remains cautious about rate increases as inflationary pressures aren't necessarily demand-driven but rather are caused by a lack of supply. For example, the hospitality industry is running on empty because there is a shortage of workers for hotels, restaurants, and cafes. Of course, the reopening of international borders might address headcount shortages for the hospitality and services sectors, while more tourists will mean more demand for caf latte, hotel rooms and smashed avo. However, it's a case of 'wait and see' for the RBA for now. That said if you can find a respectable fixed rate now, then grabbing it would be a smart move.

Nevertheless, choosing between a fixed rate, variable rate or a mix of variable and fixed, known as a 'split loan', is always case by case. For example, if someone is borrowing 95% of the property's value, are debt averse or are pushing their borrowing capacity to limit, then a fixed rate might be the best option - or at least a split rate with much of the loan fixed.

Then again, suppose the borrower plans to make significant repayments and has excellent employment prospects. In this case, an Our Broker specialist might tailor a split loan towards a more substantial portion of the loan being a variable rate - say 70% variable with the rest of the mortgage fixed.

Whether to fix your mortgage or not is always a 'horses for courses' decision, which a financial specialist from Our Broker is available to walk you through. Call Our Broker today to learn more about the most suitable loan structure for your circumstances on 1800 913 677.

Having a mortgage is an essential step on the path to homeownership. However, most banking institutions will also allow you to address some of your other financial needs as part of a packaged home loan.

A packaged home loan combines your mortgage with other banking services. A packaged home loan usually includes a credit card, mortgage offset account and savings or everyday banking account. Some packaged mortgages even offer additional services, such as financial planning and share trading if you're looking for investment diversification.

Not all packaged home loans are the same, but there are similarities, such as interest rate discounts. This discount is often tiered depending on the amount you borrow. In other words, if you borrow more, you'll earn a more competitive interest rate.

We mentioned earlier that 100% offset accounts are a common feature of many packaged home loans. An offset is a transaction account linked to your home loan. Any funds you save in this account will offset your mortgage principal and thus reduce the amount of interest you pay.

Whether it's an offset account or some financial advice, the primary benefit of a packaged loan is that it combines a raft of financial products in one place. You will pay an annual fee for this convenience, often around $400.

But then again, the fee often replaces multiple other fees the lender charges for each product individually. So, be sure to weigh up the benefits and convenience of a packaged home loan and whether you'll use all the products before assessing whether this is suitable for your financial situation.

As part of your decision-making, be sure to check with a finance specialist from Our Broker about the range of packaged home loans available to you. This specialist will ensure you find a packaged home loan with the most suitable products, interest rates and fees that meet your personal circumstances.

To find out more about home loan packages, contact Our Broker today on 1800 913 677.

When contemplating an upgrade or downsizing in your housing situation, it's essential to weigh the pros and cons of different strategies for buying or selling property with your local Raine & Horne agent. Let's explore a "sell-first" approach initially.

Selling first has advantages

If you can negotiate a delayed settlement period for the sale, extending beyond the typical 42 days, it can provide you with the breathing space needed to find your next home and move into it before finalising the sale of your current property. A longer settlement period reduces the pressure to find a new property quickly and prevents potential buyers from taking advantage of your urgency to sell.

However, if you are very particular about finding the perfect next home, an extended settlement may not solve the issue. In such cases, you might have to resort to temporary rental accommodations, incurring costs for moving your belongings and weekly rent.

There's also the possibility that property prices might increase after you've sold your current property, which might be an issue for those looking to upgrade, as a sell-first approach exposes you to market fluctuations.

On the other hand, if you opt for a "buy-first" strategy, you can avoid the inconvenience of moving into rental properties and paying for multiple moves. Additionally, this approach provides you with more time to find the right property without rushing.

However, buying first may necessitate a "bridging loan" to finance your new property and manage mortgage payments on your existing property. Bridging loans typically cover homeowners for short periods, usually up to 12 months, and lenders often require security over both properties until the original property is sold and settled. Various arrangements exist for these loans, with some lenders allowing borrowers to add interest payments to their existing loan to alleviate immediate financial pressure.

For more information about bridging loans, please contact a finance specialist from Our Broker today on 1800 913 677.