My Property Pulse - November 2024
Discover November 2024 property trends, market insights, company news, and expert advice in My Property Pulse.
All eyes will be on the Reserve Bank of Australia on December 10, as it makes its final cash rate decision of the year. In the meantime, here's what else is making news:
New insights into property investment
Are redraw & offset right for you?
More homes needed to improve affordability
Read more below.
Thank you to everyone who joined us for our first annual Client Appreciation Night! 🎉 It was an honour to celebrate our incredible clients who settled this year with us. Your trust and support make everything we do possible—here’s to your success and a bright future ahead!
A big shoutout to our Lending Operations Manager, Bec Seaman, and Customer Service Specialist, Issac Theobald, for volunteering at the Little Athletics BBQ Night! Over 200 sausages served with smiles 😊
New insights into property investment
More and more Australians are turning to property investment, new analysis has revealed.
CoreLogic’s head of research, Eliza Owen, found that the number of investors entering the market was exceeding the number exiting, by comparing home loans data with listings data.
“Investor inferred listings have been trending higher since March this year, to 13,000, but remain well below the peak of investor listings activity in November 2021,” Ms Owen said.
“As investment listings remain below these highs, the number of new loan commitments remains high at 18,400. The previous five-year average for the month was 14,516.”
Why is property investing so popular? Probably because it offers three big potential benefits:
Capital growth – if your property rises in value
Ongoing rental income – which can be used to pay down your mortgage
Tax benefits – you can reduce your taxable income if your property is negatively geared
Reach out if you’re thinking about buying an investment property. We will model different repayment scenarios for you, so you can make an informed decision about whether investing is right for you.
Redraw and offset - are these loan features right for you?
There’s a lot more to a home loan than just the interest rate. The features of the loan can also have a big impact on your total mortgage costs and repayment flexibility, which is why it’s important to understand the potential benefits of a redraw facility and an offset account.
Redraw and offset have one thing in common – they reduce the amount of interest you get charged. If, for example, you have $500,000 outstanding on your loan and $40,000 in either redraw or offset, you’ll be charged interest on only $460,000 (i.e. $500k minus $40k).
But there are subtle differences between the two features.
Redraw is a facility that sits within your loan. The way you accumulate money in redraw is by making extra home loan repayments. The lender will allow you to borrow back (or redraw) these extra repayments, subject to certain conditions. But because this money belongs to the lender, it’s technically possible the lender might decide one day not to allow you to reclaim the money, or change the conditions of redraw.
Offset is a separate transaction account that’s linked to (but separate from) your home loan account. The way you accumulate money in offset is through deposits – for example, salary payments. The money in your offset belongs to you, so the lender can’t prevent you accessing it.
Pros: you can use redraw and offset to reduce your interest bill and pay off your home loan sooner.
Cons: your lender may charge you a higher ongoing fee or higher interest rate to access these loan features. Also, you may be charged a fee for each redraw transaction.
Take the next step
Talk with one of our business finance experts who can guide you through the process and help find the best solution tailored to your needs.
Call us on (02) 8313-8400 or request a call back.
