February 10, 2015
With the last RBA rate decison to lower the cash rate to 2.25% came lots of celebration and high-fiving. Now people can access home loan rates in the 4.3% area and even 5 year fixed rate home loans around the 4.5% mark - unheard of really!
Too often though we can lose sight of why that has happened, the main reason in a nutshell is that we as a country are not travelling as well as we should be as far as growth prospects are concerned, which was the main thrust of Governor Steven's post decision speech.
Whilst rates are low there is still a growing concern for jobs and industry growth outside of the mining sector and that concern has a hard reality of lay-offs, cut hours, reduction in full time work and longer times in the unemployment queue so spare a thought for those who may not be doing it as easy as those of us on the 4.3% interest rate train, and remember....what goes down, must come up! Interest rates are at an all time low, that does not mean they will stay here so ensure when you are doing your due diligence that you factor in the possibility that these days will not be here forever.
So what do you do? talk to an expert (not Uncle Darryl or the local butcher) about what-ifs? What if your suburb is hit by economic woes and your property values are effected? What if you gear up on numerous investment properties without giving thought to rising rates in two or three year's time? What is your planned exit strategy - or do you even have one? How can you set up your loans for a quick exit or to maximise returns that you are getting? Should you be positioning for equity growth, or for cashflow and should that cashfow be positive or negative.
Accountants, solicitors, your broker and your financial planner are all worth a chat to in order to make an informed decision based on your own personal needs but with one eye to the future.
We are happy to help where we can to crunch numbers for you, to work with suppostions and research, and of course to secure the best available finance for you going forward, all at no cost. Call us on 5474 4100 or email email@example.com