Many Australian borrowers need to navigate significant changes to their mortgages throughout 2023 including fixed interest rate and interest-only term expiries. The banks understand borrowers are likely to be more active this year and are well-prepared to offer discounts and cash incentives to retain customers. This eBook aims to help borrowers make informed decisions, minimise …
It has been very well reported that many mortgage holders will soon be paying much higher interest rates when their fixed rate terms expire. It is estimated that $478 billion worth of fixed rate mortgages are due to expire in 2023. In addition, borrowers may also have to navigate the end of an interest only …
The very first article that I wrote for a magazine was published 19 years ago! No wonder I feel old. The article was called ‘Unlimited finance…’. My thesis was that investing in high yield properties, doesn’t magically extend ones borrowing capacity allowing them to invest a lot more. Some investors believe targeting high rental yielding …
Borrowing capacity has probably never been tighter in the 20 years since I started ProSolution! This is delaying investment plans for some clients. However, my expectation is that this is temporary and an easing in borrowing capacity might not be too far away. How borrowing capacity rules have changed over recent years In 2019, …
Banks will usually offer higher interest rate discounts to new customers to win their business. But, of course, the banks never offer these higher discounts to existing customers, unless they ask for them. Whilst this has always been the case, it is noteworthy that interest rate discounts have increased substantially over the past 10 years. …
Some investors have been spooked by the RBA hiking interest rates by 0.75% over the past two months, particularly since it has spent the past two years telling us that rates would not rise until 2024. Higher interest rates at the same time as rising prices (inflation) are a two-fold blow for household budgets. Where …
Update: On 6 October 2021, the regulator announced that banks must now test whether a borrower can afford a loan based on principal and interest repayments at current rates plus a buffer of 3% (previously 2.5%). As this measure requires a cash flow analysis, we feel it’s more meaningful than imposing a debt-to-income ratio cap …
Borrowing to invest in property is a popular and highly effective wealth accumulation strategy if it’s implemented correctly. However, loan structuring can often be an afterthought. The reality is that loan structuring and maximising your borrowing capacity is almost just as important as buying the right property. This blog sets out how to structure your …
It is my contention that similar provisions should be available to banks and mortgage brokers. Often, the way you assess an application for a borrower with a net worth of $2,000 compared to a borrower with $20 million will vary. Making this distinction allow lenders to apply a more common sense approach. However, unfortunately, no …
Many lenders are taking a number of weeks (sometimes months) to approve loans at the moment. These delays have been caused mainly by significantly higher mortgage application volumes and the operational disruption from onshoring back-office services due to Covid lockdowns in the Philippines and India. As such, banks are prioritising applications for borrowers that have …
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