One of lenders has updated their policy with some changes that benefit those on casual or commission income.

Casually employed workers can use 100% of their casual income with no further shading.  A minimum of 6 months of employment in the current role is needed, and we’ll annualise your income based on 52 weeks instead of 48.

Only 6 months of history are needed to accept commission income, and we will annualise out the YTD income and shade to 80%.

Looking for ways to improve your borrowing cacpacity? Book in a telephone appointment with me and I will show you how. Click here to go my calendar to make a time.

The monthly house price results from CoreLogic show national house prices rose another 0.7% in June, taking the annual growth to 8%.

Perth (+2%), Adelaide (+1.7%) and Brisbane (+1.2%) had the strongest growth over the month, with Perth now up more than 23% over the year.

Melbourne (-0.2%) was the only capital city to see house price soften.

Regional house prices are expected to hit record highs in almost all parts of Australia in the next 12 months, according to analysis by Domain.

Its FY2025 Price Forecast Report predicts Queensland’s Gold and Sunshine Coasts will achieve the strongest growth and will become the most expensive regional housing markets in Australia.

It predicts the Gold Coast will grow by between 3% and 6% and the Sunshine Coast will grow by between 2% and 5%.

Regional Queensland is predicted to grow by between 2% and 4% and Regional NSW by up to 3%. Regional Victoria is predicted to drop by between 0% and 3%.

Domain Chief of Research and Economics Dr Nicola Powell, says regional house prices in NSW and Queensland would improve the most in large regional towns, such as Tamworth, and satellite towns of the major cities, such as Wollongong and Newcastle.

She says ongoing undersupply will continue to drive the markets. Powell says taxation changes in Victoria impacted that market and investors are looking elsewhere because the capital growth isn’t there.
 

Growing demand for apartments means unit values are tipped to hit record highs in more suburbs in the coming months.

CoreLogic data shows that unit values hit new highs in the past month in nearly 40% of suburbs in Australia.

The data shows that 90% of Brisbane and Adelaide unit markets have already beaten their previous highs, 80% in Perth and 20% in Sydney.

CoreLogic head of research, Eliza Owen, predicts apartment values will continue to rise at a faster pace than house values as buyers seek out the more affordable apartment market.

“In most of the capital cities at this point, growth in unit values is starting to overtake that of houses, and that could be reflective of people trying to make their money go further up by purchasing into cheaper asset types,” she says.

This is particularly the case in inner city markets, according to Owen.

“As house values soar to new heights, some of that demand must start to shift towards units just out of necessity.”

“It’s a more realistic option, which means the added demand could take some unit markets to new record highs as well as what we’ve recorded last month.”

It is possible to borrow up to 95% for investment purchases.

Typically the maximum most lenders will go to for investment is 90% but some will lend up to 95%. Meaning a substantially lower deposit. This means you can push your purchasing range further or keep more capital up your sleave for your next investment purchase. This is available for both purchases and construction. 

Click here to see if you qualify

Dual income property in Brisbane South - 6.55% Yield

This new release is situated in a booming area with the population growing at an average of 4.6% a year. A long term capital growth rate of  6.73%/year. And a long term rental growth of 3.5%/year.

The property is only 1.3km to the local school and 2.4km to the main shopping centre.

Looking for highy yielding investment property that delivers strong cashflow and growth. Join our mail list to receive the lastest high yield and off market properties direct to your inbox. Send me High Yield property

What is the loyalty tax?
Loyalty tax is a tax on loyal bank customers. It refers to the higher interest rates paid by existing home loan customers compared to new customers.
It is not a tax in the traditional sense, but rather a premium paid by existing customers.
The difference in interest rate paid exists because banks offer larger discounts to new customers compared to the lower discount offered to existing loyal customers.

How big is the loyalty tax for home loans?
According to the Australian Competition and Consumer Commission (ACCC)’s Home Loan Price Inquiry – Final Report, the average difference in interest rates paid by new and existing variable rate customers was:

• 0.29% for borrowers with home loans less than 1 years old.

• 0.47% for borrowers with home loans between one and three years old.

• 0.58% for borrowers with home loans three and five years old.

• 0.71% for borrowers with home loans five and 10 years old.

• 1.04% for borrowers with home loans greater than 10 years old.

As you can see, the difference increases the longer you stay with a lender.
 

Significant potential savings for borrowers
Borrowers are leaving significant potential savings on the table.
For example, if a borrower with a home loan of $500,000 switched to a home loan with an interest rate 58 basis points lower than their existing loan, they would save over $2,800 in interest in the first year and save over $34,000 in interest over the remaining term of the loan.
 

How do I avoid paying the loyalty tax?
The only way to avoid paying the loyalty tax is by shopping around and negotiating with your lender.
Existing home loan customers have two options before them, namely:

• Requesting a lower rate: Customers may be able to obtain a lower rate on their current loan simply by calling their bank. Look at interest rates offered to new customers by your lender as well as a few competitors. Then contact your lender and tell them you’re paying too much. If they don’t offer you a decent rate, go somewhere else.

• Refinancing: By refinancing to a new loan or a new lender, customers can take advantage of larger discounts which are usually not available for existing loans.

Why aren’t more people refinancing?
Refinancing seems like the logical choice but why are customers preferring to remain with their existing lender and get a smaller price reduction compared to what they could get by refinancing?

The initial cost of refinancing is minimal compared to the thousands of dollars that you may potentially save on interest and other fees over the life of the loan period.
And in some cases lenders offer cashbacks which can offset refinance costs.
The primary roadblock seems to be that customers do not have the inclination to spend time and effort to make the switch.

Refinancing isn’t as complicated as it used to be plus you have already been through the process when you first bought the property. This time there is no contract of sale to go through, no solicitors and real estate agents to talk to.

Are you paying a loyalty tax?
If you’ve been with your bank for more than 3 years, you’re likely paying too much.

It's easy to find out. Take our quick quiz now.

A major frustration for property investors is having to reset their interest only investment loan every 5 years.

If you have an investment loan you would be aware that most lenders only allow an interest only period of 5 years. After that it automatically converts to principal and interest repayments. Which can see your repayments jump by 20-30%.

The only way to get your loan back on interest only is to go through the whole application process again with your current lender or try to refinance.

Given the series of rate rises we have experienced this has become very difficult for many investors.

The beauty of this loan is the IO period is 40 years. No reviews. No need to make additional payments. At expiry you can either pay the loan out from super or other funds or sale of the property.

This means you have extra cash for other things like paying down your home loan, putting extra money into super, or even funds for another investment.

Find out if you Qualify

Reality Check