It is with a reasonable degree of confidence that I can say that interest rates have peaked (Bill Evans: The Weekend Australian: Sat 29th Apr: page 30).
At the start of this cycle, I suggested that you plan for a peak of 5.5% (and more recently 6% just to cover a worst case).
Interest rates, to you, have now peaked (if I am correct) at just under that 5.5%.
You should now budget for rates at this higher level for a reasonable period ahead.
The biggest uncertainty when buying a home or having a home loan is how to reasonably plan for the seeable future. I try to help you plan.
If you are buying, you can be fairly certain that whatever your payments are now – they should stay at that level or go lower*.
(*Lower because I have placed your loan with a bank who agrees to keep your rate closely aligned with their “new to bank” competitive offers.)
I have written again to every bank (worth considering) available to me and invited them to mend their ways and come on board with this principle – banks are run by people who have no interest in you – beyond the money they can make from you. My role is to act in your best interests alone – and help them mend their ways.
(You can read a copy of what I stand for and what I have written to them – Read Here)
Two things for you at this point in time:
- If you have a home loan – Breathe a sigh of relief that you have weathered this cycle.
- If you are looking to buy either your home or an investment property – do not dilly dally – because the flip side of the interest rate coin is that house price will now continue to rise under pinned by…
- Population growth – immigration of 400,000 this year alone – that is a city the size of Canberra to house them!
- The high cost and lengthy time to build new.
- And a return of the Covid Tree Changers back to cities in large numbers putting pressure back on city house price (an interesting statistic from the same Weekend Australian).
If unemployment stays low at 3.5%-4% then there will be no bargains to be found in buying a house. You need to offer confidently and buy confidently. Whatever “pause and dip” we were due to have in housing is now almost certainly in the rear-view mirror.
As always if you’d like advice tailored to your own personal circumstances please call or email me anytime… It’s what I’m here for.