CHOICES
in this issue
•
5 steps to smash credit card debt•
The truth about 0% p.a. car finance•
Invest in your child’s education•
Is it time for a Home Loan Health Check?5 steps to smash credit card debt
Almost 60% of Australians owe money on their credit card, with over one-third facing card debt of $5,000 or more. With notoriously high interest rates, credit card debt isn’t just expensive. It can also be hard to pay off. Try our five simple strategies to clear the slate sooner.1
Check your card rates - card interest rates can be higher than 20% p.a. On an outstanding balance of $5,000 you could pay $1,000 in annual interest charges.2
Consider a balance transfer – balance transfer dealscharge zero (or very low) interest for a set period on amounts transferred to a new card. It’s a valuable chance to whittle away card debt. We can explain which balance transfer deals are right for your needs.
3
Review your budget – one of the simplest ways topay off card debt is by paying more than the monthly minimum. Talk to our team about drafting a budget that shows where you can cut back spending to free up cash for extra repayments.
4
Use a personal loan to pay off your card - using a personal loan to pay out card debt can reduce the overall interest cost, and the set monthlyrepayments are easier to budget for. We can sort through our range of lenders to help you secure a competitive rate for your personal loan.
5
Reach for a debit card – debit cards offer the security and convenience of credit cards but with none of the high interest costs. Leave the credit card at home and reach for a debit card when you’re out shopping to stay out of trouble with credit card debt.Don’t let credit card debt stress you. Contact us for more money-saving ways to free yourself from card debt.
Mortgage Choice Limited ACN 009 161 979. Australian Credit Licence 382869. Mortgage Choice Financial Planning Pty Limited ACN 158 645 624, AFSL 422854. The start of a new year signals a great time to put all the things you have been ‘meaning to do’ on the top of your priority list.
Whether you want to review your mortgage, pay off your credit card, buy a new car or even a home, now’s the time to put those plans into place.
In this edition of Choices, we show you how easy it can be to tackle the financial chores you have been putting on the back-burner.
You’ll learn how easy it is to pay off your credit card debt, put a financial plan in place for you and your children’s future, give your home loan a health check and secure yourself the best car loan for your needs.
So, what are you waiting for? Why not start crossing those financial chores off your to-do list today!
As always, if you have any feedback on our articles, give us a call – we would love to hear from you.
The information provided in Choices is for general education purposes only and does not constitute specialist advice.
News from...
Housing market outlook
While the Australian property market continues to grow year on year, new research would suggest the pace of growth is starting to slow.
According to the CoreLogic RP Data combined capital city index, the property market recorded a 0.5% drop over the three months to November 2015, which is the first quarterly fall in the Index since June 2014.
This quarterly drop in values took the annual rate of growth for 2015 to 8.7% - down significantly on the two years prior.
Throughout 2015, Sydney and Melbourne were once again the standout performers, with the capital cities recording dwelling value growth of 12.8% and 11.8% respectively. Canberra placed third in terms of value growth, with property prices climbing 4.5% over the course of 2015. This data makes it clear that the capital city housing markets are diverse and impacted by different events. For example, the economies of Sydney and Melbourne are relatively sheltered from the downturn in the resources sector and are benefitting from a very healthy services sector, while the mining states and territories are experiencing softer economic conditions and a sharp wind down in population growth.
Moving forward, it is likely that Sydney and Melbourne will continue to lead the way in value growth, albeit at a much slower pace.
Source: Tim Lawless, CoreLogic RP Data
Statistics Houses Units
Median sale price $421,000 $340,000 Change in median sale price (12 mths) 3.4% 3.2% Change in median sale price (3 yrs) 10.8% 7.9% Change in median sale price (5 yrs) 7.7% 4.6% Median asking weekly rent $350 $300
Source: CoreLogic RP Data Suburb ScoreCard, Corporate Edition, December 2015 (all data is to September 2015). All figures are current and based on data available at the time the report is published. Figures are indicative only and subject to revision.
AD E L AI D E H O U S I N G
M AR K E T K E Y S TAT I S T I C S
The team Rob, Nick, Aaron, Carol, Julie and Sheridan
p 08 8398 2955
w MortgageChoice.com.au/adelaidehills1 PO Box 633, Stirling, SA 5152
First time buyers savvier
than ever
The majority of first home buyers consider property to be a lucrative investment, new research has revealed. According to the latest First Home Owner Survey by Mortgage Choice, more than 55% of first home owners said they bought property to “set themselves up financially” for the future.
Despite the fact that property prices are rising across most property markets, the majority of first time buyers still see buying property as an important and financially savvy decision.
Today’s first home buyers are very financially literate. They understand that buying a home takes patience, sacrifice and due diligence.
Data from the Mortgage Choice First Home Owner survey found more than 70% of first home buyers knew their exact mortgage rate and understood exactly how much of a rate rise they could afford before they faced financial strain. Pleasingly, more than one third of first time owners said they could easily afford interest rate rises of at least 2%. And, given that the lenders historically move their interest rates in small incremental amounts (e.g. 0.15% - 0.25%), the majority of first time owners are in a good financial position. Indeed, the data would suggest first time owners are in a good financial position because they did a lot of
preparation before purchasing their property.
When asked whether or not they made sacrifices to their lifestyle in order to save the deposit for their first home, 73% said yes, with the vast majority indicating that they “cut back on spending”.
It would appear buying property is not a decision that first home buyers make lightly. They do their research and take their time when deciding on a property, with 70% of respondents indicating that they searched for the “right home” for more than six months before buying. Furthermore, more than 60% of respondents said they saved for their home deposit for more than 2 years, so they had plenty of time to review their options and ensure property ownership was the right move for them.
During their search for the perfect home and mortgage, the vast majority of first time buyers said they engaged a mortgage broker and, as a result, felt “well educated” on the process.
With that in mind, if you are in the market for a property, it may pay to speak with a professional mortgage broker. At Mortgage Choice, we have access to hundreds of home loan products from our panel of lenders, so we can help you find the right home loan product for your needs.
70
%
of first home buyers know their
mortgage rate and know how much of a
The (costly) truth about 0% p.a.
interest rate car loans
Picture this. You’re in the showroom, you’ve found the vehicle you love – and even better, the dealer is offering finance at an unbelievable 0% p.a. Amazing value, right?
Actually, no – not such great value at all.
Zero percent dealer finance comes with a twist. It’s known in the industry as ‘subvention’ finance. This means the cost of funding is built into the car’s advertised price. So the dealer can often not afford to provide a discount because they’ll lose money.
For you, as a car buyer, 0% p.a. finance offers very little room to negotiate on price, yet this is one area where motorists can save big dollars on the cost of their car. Sure, dealer finance can seem tempting especially in the high pressure environment of a car yard.
But don’t race in.
Weigh up your finance options before you hit the
showrooms. This gives you time to check out the range of car loans available, and by organising loan pre-approval you are in pole position to drive a bargain at the car yard. If you’re in the market for a new vehicle, talk to us about competitive car finance, and shift the savings on your next car into top gear. We have access to a range of vehicle finance providers and car buying services and will help you compare all your options.
YOUR QUESTIONS ANSWERED
In the meantime, take a look at our short Money Chat video
MortgageChoice.com.au/KnowCarFinance
for a quick rundown of car finance options.
1
0% p.a. interest car finance offers usually apply only to certain models in a range, so if you have your heart set on a certain model, you may have to compromise to take up the 0% p.a. offer.
2
Look out for additional clauses in the sales contract, like servicing the car regularly at the dealership to maintain warranty.3
Make sure you read the fine print of your sales contract and only pay for the warranty and insurances you really need.Invest in your child’s education
Providing children with a quality education is one of the greatest gifts parents can bestow. With a feast of schooling options available, making the right choice is challenging. Paying for it can be even harder.
Industry figures suggest that for a child born in 2015, the total cost of education from pre-school to Year 12 can range from just over $64,000 in government schools through to more than $450,000 in the private system*.
Moreover, education costs come at a time when families face other challenges like paying off a home loan and setting money aside for retirement.
Simply hoping it will all work out is not a plan. The key to meeting education expenses is to lay sensible foundations from an early stage – preferably before your child starts school.
1
build cash savings
This is a low risk option, although your money will earn low, fully taxable returns without capital growth.
2
Grow a diverse portfolio of assets
Shares, managed funds, or an investment property can all generate healthy returns to meet education costs. The right choice for you depends on your investment timeframe and how you feel about risk.
3
Add savings to your home loan
Making extra payments on your home loan can significantly lower interest charges, and the funds can be accessed via redraw to meet education costs.
4
Access home equity
Home loan interest rates can be the lowest of all forms of debt. Talk to us about using home equity to fund your child’s education.
5
Personal loans
Taking out a separate loan to pay for school fees is always an option but it can be an expensive one. The interest charges will add to the overall tab, potentially making it harder for families to manage the expense.
strategies to pay for education
But there’s much to consider. Planning for school bills can mean revising household budgets, especially if one parent is on maternity/paternity leave. It can also involve issues like in whose name to invest to minimise the burden of tax. Great advice is a good investment for families facing education expenses. And it can encompass the whole family if grandparents and other relatives wish to contribute. Contact us today for expert advice on strategies to give your children the best education you can afford.
*ASG Education Cost estimates
Happy new home loan
The beginning of a new year is a great time for fresh starts, and setting a date to review your home loan can deliver valuable results.
The mortgage market is extremely competitive right now. While some lenders are lifting rates, others are stepping up to the plate with very competitive deals.
Importantly, many lenders are open to negotiation. Don’t take a lender’s standard variable rate at face value because it may be possible to secure a better deal, and we can liaise with lenders to negotiate a great deal on your behalf. Now is the time to speak with us about a free Home Loan Health Check. We can assess if your current loan is still best suited to meet your needs and where that is not the case, we can streamline the refinancing process for you to ensure that you’re making the most of low rates and new
features. Many of our customers barely notice the changeover process. But they always comment on the savings, which can be especially impressive over time. Hit the ground running in 2016. Call us today to arrange your free Home Loan Health Check.
Consider the questions below and if you answer yes to any of them, it’s a good time to review your current home loan using our free Home Loan Health Check service.
A guide for refinancing
Refinancing from a $300,000, 30-year mortgage with a 5.0% p.a. interest rate to a loan with a rate of 4.75% p.a. could see you save around $16,000 over the loan term.
TIP!
Is it time for a Home Loan Health Check?
Have your circumstances changed
since you took out your loan? Yes No Is your goal to pay off your home loan
sooner or reduce your payments? Yes No Are you considering buying an
investment property? Yes No
Do you think that consolidating your debts
into your home loan could benefit you? Yes No Are you planning any major home
renovations this year? Yes No Are there other reasons that you might
wish to top up your home loan
(e.g. purchase a car, take a major holiday)?
Fire safety around
the home
By Dale Vine
Being prepared is the best form of prevention when it comes to
improving your home’s fire safety. If we were talking rural properties or homes in high risk fire areas with surrounding bushland, preventative measures can be quite extreme and costly. But for your average townhouse or inner city home, there are a few easy things you can do to reduce the risk of house fire:
•
Never leave the house or a room with a candle orincense stick burning. An open flame or hot ash can quickly turn into a far more serious fire if it spits onto nearby flammable material.
•
Now that winter is gone, pack away your electric blankets. It can be easy to unknowingly flick the controller on when making your bed and a heated bed on a hot day is an unnecessary risk you don’t need to have. A faulty overused controller is often why these things ignite.•
Be wary of the morning rush when using heated appliances. Clothes irons, hair straighteners, hair dryers or a frying pan for fried eggs will all hold heat for a period of time after being used, so be careful not to throw them back into a cupboard or drawer before they have properly cooled. I’ve seen a bloke’s station wagon catch fire after he placed a whipper snipper that still had a hot motor in the back!•
De-clutter! A clean space is a safer space. Built up areas such as mail stacked on top of the fridge add to the risk of something catching alight. Although we’d all like to burn our bills, it’s not worth burning your house down if one falls down the back of the fridge radiator!•
Replace the batteries in your smoke alarms. Or better yet, get them hard wired to your house power by an electrician so they will always remain functional.Replace the batteries in your
smoke alarms
Make sure to switch off heated appliances and let
them cool before putting them away
What makes us different?
As your local home loan experts, we’ll take care of the legwork involved in finding the right home loan, from loan application through to settlement, so you can spend your time doing the things you love. By sorting through hundreds of loans from our panel of lenders, which includes the big banks, we can determine the options best suited to you.What matters to us is finding the loan that’s right for you. As Mortgage Choice brokers, we get paid the same rate regardless of which home loan you choose from our wide choice of lenders.
Best of all, there is no charge for our home loan service. Contact us today to get expert advice at no cost to you.
Mortgage Choice Limited ACN 009 161 979. Australian Credit Licence 382869. Mortgage Choice Financial Planning Pty Limited ACN 158 645 624, AFSL 422854. The start of a new year signals a great time to put all the things you have been ‘meaning to do’ on the top of your priority list.
Whether you want to review your mortgage, pay off your credit card, buy a new car or even a home, now’s the time to put those plans into place.
In this edition of Choices, we show you how easy it can be to tackle the financial chores you have been putting on the back-burner.
You’ll learn how easy it is to pay off your credit card debt, put a financial plan in place for you and your children’s future, give your home loan a health check and secure yourself the best car loan for your needs.
So, what are you waiting for? Why not start crossing those financial chores off your to-do list today!
As always, if you have any feedback on our articles, give us a call – we would love to hear from you.
The information provided in Choices is for general education purposes only and does not constitute specialist advice.
News from...
Housing market outlook
While the Australian property market continues to grow year on year, new research would suggest the pace of growth is starting to slow.
According to the CoreLogic RP Data combined capital city index, the property market recorded a 0.5% drop over the three months to November 2015, which is the first quarterly fall in the Index since June 2014.
This quarterly drop in values took the annual rate of growth for 2015 to 8.7% - down significantly on the two years prior.
Throughout 2015, Sydney and Melbourne were once again the standout performers, with the capital cities recording dwelling value growth of 12.8% and 11.8% respectively. Canberra placed third in terms of value growth, with property prices climbing 4.5% over the course of 2015. This data makes it clear that the capital city housing markets are diverse and impacted by different events. For example, the economies of Sydney and Melbourne are relatively sheltered from the downturn in the resources sector and are benefitting from a very healthy services sector, while the mining states and territories are experiencing softer economic conditions and a sharp wind down in population growth.
Moving forward, it is likely that Sydney and Melbourne will continue to lead the way in value growth, albeit at a much slower pace.
Source: Tim Lawless, CoreLogic RP Data
Statistics Houses Units
Median sale price $421,000 $340,000 Change in median sale price (12 mths) 3.4% 3.2% Change in median sale price (3 yrs) 10.8% 7.9% Change in median sale price (5 yrs) 7.7% 4.6% Median asking weekly rent $350 $300
Source: CoreLogic RP Data Suburb ScoreCard, Corporate Edition, December 2015 (all data is to September 2015). All figures are current and based on data available at the time the report is published. Figures are indicative only and subject to revision.
AD E L AI D E H O U S I N G
M AR K E T K E Y S TAT I S T I C S
The team Rob, Nick, Aaron, Carol, Julie and Sheridan
p 08 8398 2955
w MortgageChoice.com.au/adelaidehills1 PO Box 633, Stirling, SA 5152
Mortgage Choice Limited ACN 009 161 979. Australian Credit Licence 382869. Mortgage Choice Financial Planning Pty Limited ACN 158 645 624, AFSL 422854.
CHOICES
in this issue
•
5 steps to smash credit card debt•
The truth about 0% p.a. car finance•
Invest in your child’s education•
Is it time for a Home Loan Health Check?ISSUE 1, 2016
Do you know someone thinking about getting a new home, car or personal loan? If you’ve been happy with our service, please pass on our contact details. We’d love to help!
Why choose Mortgage Choice?
We care about helping Australians afford to live the life they want to. Did you know Mortgage Choice can help you with more than just your home, car and personal loan needs? If you’re after insurance or want some direction with financial planning, our specialists are here to help. We can even help you with the financial needs of your business.
Contact us today to find out more.
The best compliment you can
give us is to refer a friend
Robert, , Aaron, Nicholas
talk to us today
p 08 8398 2955 e [email protected] w MortgageChoice.com.au/adelaidehills1 PO Box 633, Stirling, SA 5152 124 605_2628 485