The first question most clients as is how much can I borrow?

As an Expat, the factors that affect the amount you can borrow can be different from those of an onshore borrower. The timing of purchase can significantly affect the amount you can borrow.

Today I’d like to focus on two key factors that are outside of your control but can directly affect borrowing capacity and, if timed well, can assist you with a purchase.

Interest rates - Interesting Times

Earlier in the year we wrote about the effect that interest rates has on the ability to borrow funds.

Effectively, as interest rates rise, the amount you can borrow reduces. Broadly, a 1% interest rate rise reduces your ability to borrow by 10% (of total debt), eg if you could borrow $1mil and rates rise 1%, then you can now only borrow $900,000.

I’m sure you have seen over the past few months that Central Banks globally have been increasing interest rates. As inflation rises, Reserve Banks use interest rates to try and control consumer spending and control inflation.

Interest Rate 2022 -2023 Outlook.

The 3rd May 2022 will it go down as a momentous day in the financial history of Australia. The weekend news was littered with the opinion of doom and gloom (relating to interest rate rises) and the effect of what interest rate rises will have on the economy.

What is the cost of obtaining a mortgage in Australia?

As we lead into another Federal Election, one of the significant political issues leading into the last Federal Election was the Royal Commission into the Banking, Superannuation, and Financial Services Industry, or as it became known as the Hayne Review.

Should I Fix my interest rate?

Back in Quarter 3 2021, the Reserve Bank of Australia (RBA)  announced that we could see an interest rate increase at some point in 2022, previously they had suggested no changes until 2024. Since then we still have not seen the Reserve Bank make any changes to interest rates, but we have seen banks increase their fixed rates, some three times during the last six months.

As I sat and watched the ABC news on the 19th January 2022, an interesting report came on about the reserve bank raising interest rates later in 2022.

Bear in mind that earlier in the news, the ABC had just reported on the number of deaths, hospitalisation, and new cases of Omicron, the numbers for deaths and hospitalisation were the highest Australia had seen since the pandemic.

Do banks reward existing customers for their loyalty when applying for a new home loan?

To Fix or not to fix, that is the question. Let’s chat about whether to fix or not fix your interest rate.

APRA increases the serviceability buffer lenders use when assessing a loan.

On 6th October 2021 APRA (Australian Prudential Regulatory Authority) announced changes to the serviceability buffer banks are to use when assessing a new loan. The buffer is to increase from 2.5% to 3% from the 1st of November 2021.