Borrowers: concentrate on long term property goals
Mortgage Choice, Australia’s Best Mortgage Broker*, is glad to see the Reserve Bank of Australia (RBA) has given Australians in debt some time out from further tightening their budgets in order to meet increased repayments.
The RBA decided to keep the cash rate (Australia’s official interest rate) steady at 7.25 percent at its April meeting, which is welcomed by all variable rate mortgage holders who have adjusted and readjusted their spending habits at least twice since the first rate decision in February this year.
Some have found their mortgage rate increasing outside the RBA cycle because their lender is attempting to recapture some of the margin lost due to the increasing cost of wholesale funding.
Mortgage Choice National Manager Corporate Affairs, Warren O’Rourke said times have been tough for many however borrowers must always remember their reasons for taking out a mortgage.
“When someone finds their mortgage repayment rising, they can get caught up in the ‘now’ and lose sight of why they took out a mortgage in the first place,” he said.
“Whether for an investment property or a home, a mortgage is a very useful tool to building a financial portfolio for the future or for your beneficiaries future”.
The latest Real Estate Institute of Australia data shows the Australian weighted average median house price rose 6.9% over the quarter to December 2007 and 11.8% over the year to $471,294. Price growth was recorded in all cities except Perth where the median house price was unchanged from the September quarter.
In fact, history shows that Australian residential property, on average, approximately doubles in value every ten years.
Mr O’Rourke said, “All borrowers must be aware that investing in property is usually a long term strategy. The housing market is generally a 7-10 year cycle; it’s a rollercoaster ride that has highs, lows and steady patches”.
“Always ensure you are comfortable with the advantages and disadvantages associated with a particular investment asset. Consider your goals and all possible outcomes, right from the outset.
As for interest rates for the rest of 2008, no one can predict the RBA or lenders’ movements for certain. The best indicator for the former is the consumer price index (CPI) inflation data for the March quarter, due out on April 23.
If it is high the RBA will seriously consider acting in the June quarter, most likely in May.
Visit the Mortgage Choice website at www.mortgagechoice.com.au or call 13MORTGAGE.
* Australian Banking & Finance Magazine Awards, May 2007.
For further information or to arrange an interview, please contact:
Kristy Sheppard Nicole Gentle
Mortgage Choice Reputation Pty Ltd
(02) 8907 0502 (02) 8252 7003
kristy.sheppard@mortgagechoice.com.au ngentle@reputation.net.au
About Mortgage Choice
Mortgage Choice is Australia’s leading mortgage broker. It provides professional home loan advice on, and choice of, products offered by an extensive panel of Australia’s leading lending institutions and its accredited loan consultants do not charge customers for their services. Mortgage Choice does not have its own products, and consultants are paid the same commission regardless of the lender or product chosen by the borrower#.
Through its national network of over 449 franchises and 678 loan consultants supported by Group and State Offices, Mortgage Choice writes almost 1 in every 20 Australian residential loans.
Mortgage Choice is a pure play distribution model with no balance sheet or funding risk, and consistently delivers strong profits and attractive yields. The company listed on the Australian Stock Exchange in August 2004 (ASX sign: MOC).
Recent awards/recognition: 2008 MFAA Awards Best in Mortgage & Finance Industry; 2008, 2006 and 2005 MFAA Awards Retail Mortgage Broker of the Year; 2007 Lending Central Awards Mortgage Broker of the Year; 2007 Franchise Council of Australia Excellence in Franchising Awards Franchisor of the Year finalist; 2007, 2005 and 2004 Australian Banking & Finance Awards Best Mortgage Broker; 2006 BRW Magazine Top 500 Public Companies list; and 2005 Australian Mortgage Awards Best Branding and Most Effective Internet Presence.
More information is available at www.mortgagechoice.com.au or by calling 13MORTGAGE.
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