If you are buying investment properties in Perth, you have probably figured out that very small decisions and variances in numbers can add or subtract large amounts of money to your bottom line.
Thanks to a spate of RBA rate cuts, interest rates are at an all-time low–and is still falling. Some economists have gone so far as to predict a drop of as much as another 0.75 percentage points before the housing industry across Australia fully recovers and interests begin to rise again.
This leads to a rather welcome “dilemma” for many: “Should I invest in property now, or wait and see if I can get even a better interest rate in another few months?” Adding to the uncertainty of this dilemma is that housing prices are rising, even as many predict them to level off.
We believe that every person interested of property investment in Perth should maximise the benefits of today’s record low interest rates. Here are four questions that we feel everyone should ask before taking out or refinancing a home loan.
Is your rate lower than the variable rate?
Your answer must be “yes,” and it should be at least 0.7 of a point lower. It could be as much as 1 point lower. Many lenders offer this deal as a package discount. If yours doesn’t, you might want to find one who does.
Do you have a “buffer?”
If you have made your current payment lower than your previous one, have you tried paying the old amount to help pay off the principal faster? This will give you some “wiggle room” due to increased equity if you end up needing more money later.
Should you convert to a fixed loan immediately?
The variable rate is around 6%. Many banks are offering a fixed rate closer to 5%. If you have a solid budget built around consistency, you may want to convert your loan now.
Is paying more on your mortgage the most efficient use of your money?
Many investors have expensive consumer loans, which are often written with interest rates as high as 15% to 20%. If you have high interest loans on the table, pay them off first.
Call 1300 472 427 today so we can discuss your mortgage.