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Australian expats can now borrow up to 95% of the property value
The great news is that 95% lending is now available for Australian expatriates. This means that you can now buy a property in Australia with as little as 5% deposit plus the purchase costs (stamp duties, legal fees, insurance and government charges). Standard qualifying criteria applies. Contact us for more information.
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Recent testimonials
Anton, Thanks for all your help with my refinance. I guess everyone is a little wary about
dealing with people based on a web presence only, but I can say to all your
prospective clients that I have found your service to be very thorough,
extremely prompt, and totally professional at all times.
Thanks I would
be more than happy to recommend you to friends/colleagues looking to refinance
Australian loans, or to have this message listed on your website as a
testimonial.
Neil, Auckland
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What experts have to say about the property market next year
KPMG Property analyst - Bernard Salt
"If the cycle theory is correct then there will be a property upswing beginning in Sydney in 2006 or 2007 before spreading to other parts of the nation. This would place the next cycle as running from, say 2007 to a peak in about 2011."
Wakelin Property Services cofounder - Monique Wakelin
"It will be steady as she goes for the next 12 to 18 months or so and then we will see a moderate upturn."
Macquarie Bank head of property research - Rod Cornish
"We expect moderate capital city price movements over the next 18months with continued price drops in weak sectors such as generic investment apartments in oversupplied locations."
BIS Shrapnel senior property analyst - Angie Zigomanis
"We expect strong economic growth to maintain stable prices over the next 12 months,with prices expected to weaken in the medium term as higher interest rates impact on affordability."
Page 6, Investor, The Age, Sunday August 7, 2005.
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Fixed rate loans - pros and cons
Almost every lender
offers fixed rate loans within their range of products. Whilst fixed rate loans
offer fixed repayments and predictability for a certain period of time, there
are a number of limitations to consider.
A mortgage with a rate fixed for 2, 3 or 5 years will be easier to build your
plans on. You can always switch into a fixed product by making a request to your
bank. The downside of this type of finance is the lack of flexibility. Most
lenders will charge penalties if you try to break the fixed contract by
switching to a different product, refinancing to another institution or selling
the property. Banks usually limit the amount of extra repayments you can make on
a fixed mortgage. This will not suit those who would like to pay out their
property as soon as possible. In summary, the certainty this type of mortgage
provides comes at a price of inflexibility.
A split loan with fixed and variable portions is a good alternative when you
want to combine the certainty of a fixed rate and the flexibility of a variable
rate. However, it is still possible to find a lender who allows unlimited extra
repayments on a fixed rate mortgage.
Is it a good time to fix? Many of our clients ask this question.
To find the answer, we have to look at how banks set their fixed rates. Banks
have a team of economists who analyse and predict upcoming changes to GDP,
inflation, unemployment, exports, exchange rates, and interest rates. The
forecast of the official interest rate set by RBA and future home loan rates is
used as a benchmark for setting up fixed rates for mortgages.
Consider a 3-year fixed home loan rate. Is it likely to be below or above the
average predicted variable rate in the following 3 years? The answer is 'ABOVE'.
Why? Because if it was below, the bank would be more likely to lose money on the
3-year fixed loan. Banks expect to make more money on a fixed rate than on a
variable and set the fixed rates accordingly.
Many of us have heard stories about jumping into a fixed rate at the right
time and, in the end, paying less than those on variable mortgages. This happens
when banks misjudge interest movements. For example, in March 2002 banks
expected official rates to go down due to the falling GDP and weakening stock
market. They set fixed rates below the prevailing variable rates. However, the
official rates have since risen from 4.75% to 5.50%. Those who fixed in March
2002 were lucky.
But how often do banks make mistakes favouring their customers? Unfortunately
for us, banks are more likely to win the game. For this particular reason, we
strongly recommend to our customers not to attempt to predict interest rate
movements to decide whether to choose a fixed rate mortgage. The decision for or
against can be based on your risk profile. It can be compared to, say, home
insurance. If something happens to your house, it will be rebuilt at the expense
of the insurer. In a similar way, fixed rate loans offer security, but come at
higher price and are less flexible.
Disclaimer
The purpose of this publication is to inform about choices
available on the mortgage market and does take into consideration your personal
situation and requirements. Under no circumstances, this material constitutes
advice, and you should not treat it as advice. If you need professional
financial advice, please contact your financial adviser or chose one from Australian
Financial Planning Association
In our next newsletter
- Buyers agent and how they can help overseas customers.
- Loan features. Which ones do you really use?
We will be happy to discuss and research various options for your new or existing mortgage in Australia. There are plenty of deals in store for you, simply contact us by sending an enquiry.
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