Home News Confused with all the talk about low interest rates?

Confused with all the talk about low interest rates?

Font size :
The property market has been getting a lot of attention in recent months after a surge in house prices, auction clearance rates and home loan approvals. And with the Reserve Bank of Australia set to drop interest rates to a record low of 2% within the next six months, we are being told that property investors are generating more equity from their investment properties than ever before! 
 
The mixture of low interest rates and rising rental income proves the perfect recipe for generating cash - and with media outlets hyping about property investors buying properties that are almost paying for themselves, it’s a wonder there are any properties left on the market! 
 
It’s fantastic that consumer confidence is on the rise, but we all know interest rates are not going to stay this low forever. So it’s important to be realistic. There is so much conflicting information out there; all you can do is make sure you are prepared for rising interest rates and inflation. As we always advise our customers, they key is to: plan, plan, plan, do your numbers, talk to the experts… and did I mention - plan!
 
When working out your figures add an extra 1–2% onto your outgoings. This will prepare you for rising expenses in the future – meaning you won’t be caught short and find yourself entering the negative gearing roller-coaster. It’s called a contingency and will be more useful than you ever imagined. 
 
So the process to planning is – whether it’s a new investment property you’re buying, or you have taken a new loan for an existing property – now all the costs that are likely to occur so you’re prepared.  
 
Simply add up all your expenses such as council rates, water charges, repairs and maintenance and property management fees, add into it the loan costs.  You can then compare the total monthly costs, or annual costs against expenses. 
Here at HomeSource; our new service RentSource is designed to help property investors make more out of their investments in a hassle free way.  RentSource can manage all your repairs, maintenance and property management fees at half the price to anyone else in the country. 
 
The moral of story is to always be prepared! The Global Financial Crisis has been a hash reminder of the dangers people can face when borrowing too much money. The RBA recently advised banks to maintain ‘a strict lending criteria’ in the low rate environment to avoid an unrealistic property bubble. 
 
Don’t get me wrong, there’s no doubt it’s a great time for property investors who are reaping the benefits of low interest rates.  
 
Just be mindful that it can be a double edge sword! The rates can work for you or against you – the key is to be prepared to make sure they work for you!

Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker

Mortgage News and Articles

New social housing aims to transform Ivanhoe Estate New social housing aims to transform Ivanhoe Estate

The sprawling redevelopment aims to boost the supply of affordable housing in Sydney Read more

A new suburb will be built in west Melbourne A new suburb will be built in west Melbourne Mount Atkinson will become home to more than 22,000 people over the next 15 years ... Read more

Surging house prices threaten liveability in Melbourne Surging house prices threaten liveability in Melbourne Analysts warn the city could become just as unaffordable as Sydney, if property trends continue ... Read more

More Aussies would benefit from regional hubs linked to cities More Aussies would benefit from regional hubs linked to cities Shorter commutes could spur higher home sales in regional towns, analysts say ... Read more

More mortgage news and articles

Sponsored Links

Sunday, Aug 20, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords