interest rate Archives

Navigating the Waves: Assessing the Impact of the 2024 Australian Income Tax Changes on Property Affordability

February 9, 2024

The year 2024 marks a significant chapter in Australia’s economic landscape, as the nation undergoes key income tax changes that have far-reaching implications for various sectors, including the real estate market. This article aims to explore the impact of the 2024 Australian income tax changes on property affordability, shedding light on how these adjustments may influence prospective homebuyers and the overall housing market.

Changes in Taxation:

In 2024, the Australian government implemented a series of income tax changes aimed at fostering economic growth and creating a fairer tax system. These changes include adjustments to tax brackets, deductions, and other relevant factors that directly impact the disposable income of individuals and families.

Impact on Property Affordability:

Disposable Income and Affordability:

One of the primary factors influencing property affordability is the disposable income of potential homebuyers. With the new tax brackets and adjustments, individuals and families may experience changes in their take-home pay. This shift in disposable income can directly influence the purchasing power of prospective homebuyers, potentially affecting their ability to enter the property market.

Interest Rates and Mortgage Affordability:

Changes in income tax can also have a cascading effect on interest rates set by financial institutions. If the adjustments lead to shifts in the overall economic climate, it may impact interest rates on mortgages. Homebuyers should closely monitor these changes, as fluctuations in interest rates can significantly affect the affordability of property loans.

Regional Disparities:

The impact of income tax changes on property affordability may not be uniform across all regions of Australia. High-demand areas may experience more pronounced effects, while regional markets may be comparatively less affected. Prospective buyers should consider these regional disparities when assessing the affordability of properties in specific locations.

Government Initiatives:

Governments often implement various measures to counterbalance the potential challenges posed by tax changes. First-home buyer grants, stamp duty concessions, and other incentives may be introduced to mitigate the impact on property affordability. It is essential for homebuyers to stay informed about such initiatives to make informed decisions.

Conclusion:

As Australia undergoes significant income tax changes in 2024, the impact on property affordability remains a dynamic and evolving aspect of the real estate landscape. Prospective homebuyers are advised to stay vigilant, keeping a close eye on how these changes may affect their disposable income, interest rates, and overall purchasing power. Additionally, understanding regional variations and government initiatives can empower individuals and families to navigate the evolving landscape of property affordability in the wake of the 2024 Australian income tax adjustments.

If you are interested if finding out your norrowing ability, contact

Assessing the Impact of the 2024 Australian Income Tax Changes on Property Affordabilityyour Origin Finance Broker by calling 1300 30 6767 or filling in the enquiry form on this page.

The Bond Market Says Your Home Loan Rates Will Fall

September 5, 2023

Normally if you are going to lock your money away for a period of time you would expect to get a higher return. Same as if you are looking for a fixed rate home loan, the longer the time frame the higher the rates should be as an offset of time and risk. The bond market is the same, long term rates should be much higher than short term rates to take into account the same dynamics.

Currently 1 to 10 year bond rates are below or at the Target Cash rate set by the Reserve Bank of Australia. The cash rate is 4.10% while the 5 year bond rate is 3.875% . Normally it should be between 0.25 and 0.75% above the rate depending on the market outlook and is actually currently 0.225% below the RBA’s target cash rate. Like wise all the medium term rates are below the target cash rate set by the RBA, for example the 1 year rate is 3.97% , 0.013% below it while the difference between 10 Year Bond rate and cash rate has dropped to zero.

This normally means that the market expects to see interest rates drop. A little in the next year and possibly more in 2 to 10 years.

Bond Market Says Home Loan Rates Will Fall

What does this mean for you as a home owner or potential owner? It means that home loan interest rates could possibly have peaked and some relief is on the way. It can also mean increased activity and prices as historically when interest rates fall, property prices increase. This is to some extent why we have seen the increase this year in prices in metro centres as buyer are trying to “get in” before the price rise happens which has been exacerbated also by a lack of supply, especially in new home construction.

If you want to avoid the stampede that happens as rates go down, now may be a good time to think about getting your finances in order and planning your next real estate move, whether it’s your first home , an upgrade or another investment property .

For a free assessment with your Origin Finance broker call 1300 30 67 67 or fill in the enquiry form on this page.

Why now may be the time to buy – but be careful.

May 12, 2023

The property market is changing, creating opportunities for some and traps for others.Today I tried playing with Chat GPT and asked it to write my blog on the Sydney property market – and was amazed by the results!

“Now, we all know that Sydney is a fabulous place to live with its vibrant city life, beautiful beaches, and stunning harbour. And, unsurprisingly, the property market is always bustling here. So, what’s happening now?” it said as if Sydney’s streets were paved with gold.

Now, there’s no doubt that Sydney property investors have done well over the years. But a simple request to write about today’s property market produced gushing results.

Over the years, my clients have done well where they have made wise investments rather than just following the latest fad.

But, as we start to see the property market pick-up, many are starting to rush headlong into investments that could well be too good to be true. This week’s Australian ran an article stating “NDIS property promotions underplay the complexity of these increasingly popular investments”.

The article cautioned against gullible investors being blindsided by property spruikers.

And yet, at the same time, many economists are predicting growth in the property market – it’s just a case of choosing widely. This week we arranged finance for a young couple Sydney who have been clients for a few years who were wise-enough to sit out all the speculation that was occurring in the property market of Covid days.

Now they have worked out that, with interest rates almost at a peak, the market may be about to lift-off – so they have taken the plunge.

But I am also hearing other stories of project marketers flogging house-and-land packages to people who are on disability benefits and who hope to have enough income by the time the property settles in 2024. It may work out for them, but there’s a lot of risk.

There’s no doubt we are entering into a Brave New World. But that doesn’t stop us doing our due diligence before we buy.

If you want to talk more about your property and finance needs, please contact me on 02 9922 5055.

By Graeme Salt

Australia enters a two-speed property market

May 5, 2023

By Graeme Salt

For the rest of the year Australia will have a two-speed property market.

For those with strong incomes and healthy savings, Australia is a land of opportunity with a property market starting to rise.

But for others, trapped by high interest rates, there’s limited opportunity. For them – refinancing or buying will be tough.

According to Corelogic housing values look to have bottomed out, with Sydney now 3.0 per cent higher than the recent trough recorded in January according and CBA now predicts prices will jump 5 per cent this year.

If you’re looking to get into the market – this could be your chance.

However, at the same time, up to 880,000 existing homeowners will need to find hundreds, or even thousands, of dollars more each month when their fixed-rate periods expire this year.

According to NAB close to 40 per cent of their existing home loan customers would struggle to meet the lending criteria of a different bank.

Get ready for six months of bad news as households servicing a $550,000 mortgage will suffer an $891 increase in monthly repayments. And someone with a $1 million mortgage would have to fork out an extra $1,620 each month.

As a result, it’s hard to envisage a really buoyant market for some time.

Until interest rates fall, or credit policies ease, house prices are unlikely to rise significantly.

But the long-term prediction for housing remains rosy. With 400, 000 arriving here from overseas this financial year alone, demand for property remains strong.

The bell has been rung for the bottom of the market – where to next?

If you want to talk to me about your lending needs, I can be contacted on 02 9922 5055 or message me here

How to get yourself out of mortgage prison

April 8, 2023

Refinance now to get out of Mortgage Prison

Think you’re the only one going through mortgage pain? Well you’re not.

Think you have to grin and bear it? Maybe you don’t

About 16 per cent of households with a home loan are in “mortgage prison”, unable to refinance to a lower rate because they do not meet banks’ tough serviceability assessment rules, the Reserve Bank of Australia has revealed.

The RBA’s semi-annual review of financial stability says rising interest rates mean an increasing number of existing borrowers cannot pass a bank serviceability assessment, which tests a person’s ability to cope with a three percentage point increase in interest rates.

It means hundreds of thousands of households are stuck with their existing lender and unable to directly reap the benefits of strong competition in the refinancing market, with banks offering discounted interest rates and $4,000 cashbacks.

However, this research does not consider the relief that non-bank lenders can provide to those in mortgage stress – these lenders are not legally required to apply the serviceability buffer tests. And non-bank lenders still offer competitive rates.

Non-bank lenders cover about 10 per cent of the market and often only go through brokers.

If you want to learn more about how to get finance with non-bank lenders, contact your Origin broker.

And, if all else fails, you can still talk to your existing bank about getting them to drop their rates. As the central bank said, about one-third of borrowers who are unable to refinance have managed to renegotiate their interest rate with their current lender.

Call Origin Now on 1300 30 67 67 or fill in the form on this page to find out what your options may be.

Rates on Hold?

April 8, 2023

Homeowners breathed a sigh of relief this week as the Reserve Bank of Australia (RBA) opted not to raise interest rates unlike at its previous 10 months.

However, we may have to endure a bit more pain until things get easier.

The RBA has indicated that further rates rises may be on the way. The Bank’s Governor said in a recent speech “the board expects that some further tightening of monetary policy may well be needed to return inflation to target within a reasonable timeframe.”

And the bosses of the Big Four banks have all said that further rate rises are on the way too.

The 10 consecutive increases have seen repayments on a 25-year, $500,000 loan rise $983 per month – is being taken as a sign the RBA is nearing the finish line on rates, or is already there.

But its increasingly clear that, if we have not reached the peak in interest rates, we are close to the top.

And, with inflation starting to dip, there is now talk of rate cuts being on the way. The Australian Financial Review’s survey of 36 economists puts the first post-pandemic rate cut in play by February 2024, according to the median forecaster. A quarter of respondents predict it could even happen this year.

None of us have enjoyed these rate rises. But the economy has coped well so-far and the worst may-well soon be over.

Call Origin Now on 1300 30 67 67 or fill in the form on this page to find out what your options may be.

Reduce your interest rate and get up to $4000

March 24, 2023

Refinancing your mortgage can be a great way to save money on interest payments and potentially reduce your monthly repayments. In Australia, there are many lenders who offer competitive rates and incentives to refinance your mortgage. How can you can refinance your mortgage in Australia and get a massive interest reduction and up to $4000 refinancing payment? Read on.

Shop around for the best deal

The first step to refinancing your mortgage in Australia is to shop around for the best deal. There are many lenders in Australia who offer different rates and incentives, so it’s important to compare them to find the one that suits your needs. You can use online comparison tools to compare different mortgage offers and choose the one that offers the best value or call you Origin broker to do it for you!

Calculate your savings

Once you have found the lender with the best offer, it’s important to calculate your potential savings. You can use online mortgage calculators to compare your current mortgage with the new offer and see how much you could save in interest payments. It’s also important to consider any fees associated with refinancing your mortgage, such as exit fees from your current lender and application fees from the new lender.

Apply for the refinancing

Once you have decided to refinance your mortgage, you can apply for the new loan with the new lender. The application process usually involves providing information about your income, employment status, and credit history. The new lender will also conduct a valuation of your property to determine its value and the amount of equity you have in it.

Pay off your existing mortgage

Once your new loan is approved, you will need to pay off your existing mortgage with the funds from the new loan. This process is usually handled by the new lender and involves paying off your old loan and transferring the title of your property to the new lender.

Enjoy the benefits of refinancing

Once your new loan is in place, you can start enjoying the benefits of refinancing. These benefits can include a lower interest rate, lower monthly repayments, and potentially significant savings over the life of your mortgage. Some lenders also offer cash incentives for refinancing, which can be a great way to offset any costs associated with the process.

Refinancing your mortgage in Australia can be a great way to save money on interest payments and potentially reduce your monthly repayments. By shopping around for the best deal, calculating your savings, applying for the refinancing, paying off your existing mortgage, and enjoying the benefits of refinancing, you can take advantage of the competitive mortgage market in Australia and potentially save thousands of dollars.

Call Origin Now on 1300 30 67 67 or fill in the form on this page to see what your options can be.

Doug Daniell – CEO – Origin Finance

What to do when your low fixed rate home loan is maturing

March 14, 2023

As a home loan borrower, you may have taken advantage of cheap fixed home loan rates in Australia. However, when your fixed term ends, your loan will automatically switch to a variable rate. This change can impact your monthly payment, and it’s important to understand what to expect.

Fixed home loans in Australia are usually offered for a period of 1-5 years. During this time, your interest rate is fixed, meaning your monthly payment remains the same. This can be beneficial if you want to budget your expenses and protect yourself against interest rate hikes.

However, once your fixed term ends, your loan will automatically switch to a variable rate. This means your interest rate and monthly payment can change depending on market conditions.

The change in monthly payment can be significant, especially if you initially took out a fixed-rate loan with a low-interest rate. For example, if you have a $500,000 home loan with a fixed rate of 2% for 2 years, your monthly payment would be $2,148. Once the fixed term ends, your loan might switch to a variable rate of 6%, increasing your monthly payment to $2,998. This is an increase of $850 per month, or $10,200 per year.

To prepare for the change in monthly payment, it’s important to understand your options. Here are some steps you can take:

Review your loan terms: Before your fixed term ends, review your loan terms to understand when the change will occur and what your new interest rate and monthly payment will be.
Budget for the change: Once you know the new interest rate and monthly payment, adjust your budget to accommodate the increase. You may need to cut back on other expenses or find ways to increase your income to cover the additional cost.
Consider refinancing: If the increase in monthly payment is significant, you may want to consider refinancing your home loan. Refinancing can help you secure a better interest rate and lower your monthly payment.
Talk to your mortgage broker: If you’re struggling to make the new payment or are concerned about the impact of interest rate rises on your loan, talk to your mortgage broker. They can help you understand your options and work with you to find a solution that meets your needs.

A mortgage broker can also help you shop around for a better deal on your home loan. They have access to a wide range of lenders and can help you find a loan that suits your needs and budget. By working with a mortgage broker, you can be confident that you’re getting the best deal possible on your home loan.

In conclusion, the change in monthly payment when your fixed home loan matures in Australia can be significant, especially if your interest rate increases from 2% to 6%. It’s important to understand your options and plan accordingly to avoid financial stress. By reviewing your loan terms, budgeting for the change, considering refinancing, and talking to your mortgage broker, you can make the transition to a variable rate as smooth as possible.

Doug Daniell

CEO Origin Finance

Mortgage Rate Increase – Need a Break ? Contact your Broker Now!

March 7, 2023

Rates Concerning you? Call your broker to get a Rate Reduction

If you’re a homeowner with a mortgage, you know how important it is to stay on top of your payments and make sure you’re getting the best deal possible. Interest rates can play a significant role in the cost of your mortgage, and a high interest rate can end up costing you thousands of dollars over the life of your loan.

Fortunately, there’s a way to reduce the interest rate on your home loan and potentially save yourself thousands of dollars in the process. By calling your mortgage broker, you can take advantage of their expertise and access to a wide range of lenders to find a better rate that suits your needs.

Why Call Your Mortgage Broker?

Mortgage brokers are licensed professionals who specialize in helping people find the best mortgage rates and loan terms for their specific needs. They work with a variety of lenders and financial institutions to find the best deals for their clients and can help you save money on your mortgage in a number of ways.

Here are a few reasons why you should call your mortgage broker to help reduce the interest rate on your home loan:

They can negotiate on your behalf: Mortgage brokers have established relationships with lenders and can negotiate on your behalf to secure a lower interest rate. They know the ins and outs of the industry and can help you navigate the complex mortgage market to find the best deal for your unique situation.
They have access to a wider range of lenders: Mortgage brokers work with a wide range of lenders, including banks, credit unions, and other financial institutions. This means they have access to a larger pool of mortgage products and can find you a better rate than you might be able to find on your own.
They can help you refinance: If you’re already locked into a high-interest mortgage, your mortgage broker can help you refinance to a lower rate. This can save you a significant amount of money over the life of your loan and help you pay off your mortgage faster.

How to Get Started

If you’re ready to reduce the interest rate on your home loan, the first step is to call your mortgage broker. They can help you understand your options and guide you through the process of finding a better rate.

Here are a few tips to keep in mind as you get started:

Gather your documentation: Your mortgage broker will need to see your current mortgage statement, credit report, and income documentation to help you find a better rate. Make sure you have all of this information on hand before you call.
Be clear about your goals: Let your mortgage broker know what your goals are for reducing your interest rate. Are you looking to save money on your monthly payments, or do you want to pay off your mortgage faster? Be clear about what you’re looking to achieve so your mortgage broker can help you find the best deal.
Ask questions: Don’t be afraid to ask questions or clarify anything you don’t understand. Your mortgage broker is there to help you, so make sure you’re comfortable with the process and understand your options.

Conclusion

Reducing the interest rate on your home loan can be a great way to save money and pay off your mortgage faster. By calling your mortgage broker, you can take advantage of their expertise and access to a wide range of lenders to find the best deal for your unique situation.

If you’re ready to start saving money on your mortgage, call your mortgage broker today and see how they can help you reduce your interest rate.

Call Origin Now on 1300 30 67 67 or fill in the form on this page to save your money and sanity!

Doug Daniell – CEO – Origin Finance

Getting Business Finance is Easier than You Think

October 30, 2017

Did you know that getting finance for business purposes might be easier than getting a home loan?

With the amount of scrutiny from regulators such as APRA and ASIC on residential mortgages, the banks are trying to increase their lending to businesses – and with ultra-low rates, business owners are finding commercial loans very competitive.

Here are some examples of what is happening in the world of commercial lending.

Offices/Warehouses/Shops

Typically these properties have a higher rental yield than residential properties. Banks will lend up to about 70 per cent of their value.

And, in the commercial world, lenders are less demanding in assessing whether-or-not you have the income to service the loan. Typially if you can prove the rent plus any surplus income you have is 1.5 times the interest on the loan, you can get finance.

One mid-size bank is very aggressive here; lending up to $1m at 4.45 per cent.

Buying Your Own Premises

Many business owners come to me as they have had enough of paying rent and want the security of owning their own premises (expansion plans are easier to implement when you know what you are doing).

The same financial metrics above apply; typically what my business clients do is buy the property in the name of another company they own and then rent it to themselves on commercial terms. That way they can always rent it to another business in future.

Self Managed Superannuation Funds (SMSFs)

Many of my clients are either buying commercial properties in their own Super Funds or transferring a commercial premises into it. The reason is that tax rates for Superannuation are very generous.

But lending in Superannuation is not straight-forward; you need to make sure that you have the Trusts set up properly.

Asset Finance

Pretty much all businesses need a car. But they may also need vans, forklift trucks and fit-outs.

Arranging finance here is pretty straight-forward. And, if you own a property, some lenders will lend to you on a lo-doc basis at very attractive rates such as 4.9 per cent.

The ability to get finance is often key to a businesses’ success; sometimes arranging it can be very complex. If you want to discuss more about your finance needs, please contact me on 1300 30 67 67.

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