Month In Review - July
The new tax year has started, government grants go live to help First Home Buyers and some parts of Australia are back in lockdown! It's been another busy month and demand is showing no signs of slowing here in Brisbane.
Read on to find out what happened in the market throughout July.
Interest Rate Update
Rate drops from lenders seem to have leveled off and it doesn't look like rates are going any lower. Major lenders have started to raise their 3 & 4 year fixed rates. Loan processing times from lenders still remain one of the biggest hurdles when buying a new home, this can be up to 35 days! So if you're thinking of buying and need a 14 day finance clause to be competitive in the market then it's important to talk to your broker upfront to assess your options.
Here are some of the market leading rates as of June 2021.
With 3 & 4 year fixed rates creeping up if you still haven't refinanced to take advantage of these record low rates then you may miss the boat and potentially huge savings!
ANZ has predicted the base cash rate to rise to 0.5% by the end of 2023. This is potentially a lot earlier than originally thought as most predictions were for 2024 before we saw any changes. This is probably why we are seeing 3 & 4 year fixed rates increase now.
To find out if you qualify for any of the above rates contact us today.
RBA cash rate
The RBA cash rate has remained the same at 0.1%.
Some of the key takeaways from this meeting were:
- Maintaining the target of 10 basis points for the April 2024 bond will continue to keep interest rates low at the short end of the yield curve and support low funding costs in Australia..
- The unemployment rate fell again to 5.1% in May. Lower than before the pandemic started.
- Housing markets have continued to strengthen, with prices rising in all major markets. Housing credit growth has picked up, with strong demand from owner-occupiers, including first-home buyers.
- Given the environment of rising housing prices and low interest rates, the Bank will be monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.
- It will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. Meeting it will require the labour market to be tight enough to generate wages growth that is materially higher than it is currently.
- Despite the strong recovery in jobs and reports of labour shortages, inflation and wage outcomes remain subdued.
If you want to see what else was discussed then click HERE
New FHLDS price cap update
The federal government has confirmed new property price caps for the First Home Loan Deposit Scheme (FHLDS) and the Family Home Guarantee, which apply from 1 July 2021.
For the next 10,000 places issued under the FHLDS and the new Family Home Guarantee in the new financial year, property price caps will be as follows:
Read more about it HERE
APRA grants further support for loans impacted by COVID-19
The Australian Prudential Regulation Authority (APRA) has announced regulatory support for banks offering temporary financial assistance to borrowers impacted by COVID-19.
A number of authorised deposit-taking institutions (ADIs) have announced COVID-19 support packages that will provide affected borrowers with an option to defer their loan repayments. These packages have been offered to small business and home loan customers.
If you are affected by the new lockdowns then please reach out to your lender if you need help in paying your home or investment loan.
Purchase a property with just 2% deposit - Family Home Guarantee
The Family Home Guarantee aims to help single parents with dependents to purchase a new or existing home with a deposit as low as 2%, with the government guaranteeing the remaining 18%. This also means you no longer need to pay for Lenders Mortgage Insurance (LMI) which can save you thousands of dollars.
The Family Home Guarantee is limited to 10,000 places. However, this will be spread out over four financial years from 1 July, 2021 – which equates to 2,500 spots per year.
There is a strict eligibility criteria and as well as the 2% deposit you also need to have savings to cover the upfront purchase costs (legal, government, and mortgage fees, stamp duty etc.). The scheme is also only available through participating lenders.
If you need help finding out if you qualify for the new grant and which available lenders suit your requirements then contact us today where we will be happy to help.
SMSF loan rates drop as more lenders offer product options
SMSF have had it tough over the last couple of years with a majority of lenders withdrawing their mortgage products in this space, as a result rates increased and lender options dropped to only a handful. The good news is things have started to change and lenders are now entering back into this space with rates now falling into the 3% range.
If you have a property in your SMSF then it's time you reviewed it! Most of the SMSF loans we see from our clients are paying around 5%.
Contact us today for a free review to see if we can save you some money.
If you would like to find out more information on any of the above topics or would like to see how we can help you with your mortgage Contact us.
WARNING: The contents of this communication are not designed to replace credit advice. We have not taken into account your needs, objectives or financial situation. The comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts may result in a different comparison rate. The comparison rate is calculated on a $150,000 secured loan over a 25 year term at 60% LVR.