There’s an opportunity to put more cash in your pocket
Banks and lenders have been playing around with their pricing for a little while which has created some gaps in pricing. This has been opened up more with the RBA cutting the cash rate last week.
Some lenders have passed on the cut in full some a smaller percentage.
We now have a situation where across the big 4 banks the gap from their lowest to their highest variable rate is 1.65%. Once we look a bit broader to other lender this spreads out to over 2%.
Being able to reduce your interest rate by 1% on a $500,000 loan could save you over $3,500 a year.
Consolidating some other personal debts like credit cards could really improve your cashflow as well.
We recently saved one client nearly $10,000 a year in repayments
Talk to us about ways to put more money in your pocket today
Super changes will see increased property values
The low tax environment that super offered, particularly to high income earners is gone and will shift many peoples focus into other options like property investment.
The strict limits on the amount of money that can be pumped into super, combined with a cap on how much can be transferred to a tax-free private pension and a rise in the contributions tax for high income earners, has made the super system a far less attractive vehicle for wealthy savers trying to avoid the taxman.
When you consider a high income earner can get back 45% of their expenses via a tax refund for property investment it’s no surprise more capital will find its way into the property market.
Low rates will drive retirees into the property market
Last week’s rate cut is a further blow to self-funded retirees who were relying on interest as income.
Only a few years back a savings balance of $1 million dollars could have earnt you $60,000 to $70,000 a year. Now you’d be doing well to get an income much above $25,000.
That’s a 66% fall in income. Low deposit rates will force retirees to look at alternate investments like property and shares which will generally offer higher yields.
Talk to us about how to finance your investment plans.
Check out our answers to some popular home loan questions.
Get more than just a low rate
If you are looking to purchase property or want to review your existing lending it is worth talking to us to get your home loan options properly assessed. We not only look at your interest rate we can also assist with developing a longer term plan focused on your financial goals. Contact us to discuss you plans.