Time to read : 3 Minutes
What Does The October Rate Rise Mean For You?
I get it, every time the rate increases there is more pressure on homeowners and buyers. The thing I want to say to you is don't panic.
And...
Interest rates are always going to go up and down.
There is never a perfect time to sell or buy.
If you're willing to be nimble there is always a good deal to be had.
For people who want to buy...
There is really no time like the present.
🏡 Buying into a higher interest rate market could help you be more sensible with your budget and give you a great negotiation tactic too.
Prices are dropping around Australia. With Perth and Adelaide now both showing signs of softening. Only Darwin is holding and that is still 10.1% softer than their peak in 2014.
Recent data shows that the house prices could fall by 30% as rates rise, but whilst this may be a concern for some owners, for others it may not be. Property is usually for the long haul anyway.
The other bonus in a falling market is that there are often less buyers and competition and sellers are usually more realistic with their prices too.
Be aware: That you will not be able to borrow as much as you could a year ago, with debt-to-income (DTI) ratios becoming tighter.
What about homeowners?
Stay calm, and consider all your options. Right now on the Compare Club panel we currently have variable rates from around 3.64% and fixed rates as low as 4.49%.
The rate you can get will vary on the type of borrower you are, as lenders are really paying attention to who is borrowing. For example a contract worker vs a full-time worker will be considered much riskier right now.
The Governor of the Reserve Bank (RBA) Phillip Lowe said this week that "the Board is committed to returning inflation to the 2–3 per cent range over time" and to expect "further increases... over the period ahead."
So it is a really good time to assess if you are on the best rate for you, especially if you are about to finish up on a much lower fixed rate.
There are some good fixed rates out there too if you like to be able to plan ahead. This is because banks have more control on what they set those rates at.
Banks are certainly trying to encourage more people to lock in fixed rates and some come with perks like cash, points and even free internet.
But it all really comes down to what suits you the best, and my team and I are really focused on nutting out what that is so we can help you.
The bottom line
The market is tough for buyers, owners and sellers right now but there is always a way forward.
👐 There are always good deals to be had and we are here to help you!
☎️ I have had clients who didn’t think we could beat their home loan deal and then we did... the most important thing right now is to speak to someone.
💰Every 0.50% that you can take off your rate will save you some serious money in a year and help you pay off your mortgage sooner too.
