Is it time to fix your loan?
If you are ready to buy a property, you may come across the question: should I fix my home loan rate or should I just leave it variable? No one can predict the future; the decision can only be made based on your current situation and your long term plan. Current cash rate is only 2% and sitting at historic low. There is no better time to consider fixing your loan. The following are advantages for fixing your loan:
- Easy to manage your cash flow: the repayment amount will be always the same. There won’t be any ‘surprises’ when lender debits money from your account. People find it easier to manage their cash flow and plan their budgets, especially if they are thinking to change job, having an overseas trip, getting married, etc.
- Protected against unforeseen rate rises: any rate increase will only affect people who have variable rate. While other people may need to adjust their cash flow or budget, fixed rate is acting like a product guarantee to give you the peace of mind as your financial situation won’t change.
However, there are also some disadvantages of having your home loan fixed. For example, if the rate goes down, you won’t be benefit from the rate cut. Most of the lenders have break fees if you want to refinance or pay out your loan earlier. Also, most lenders only allow borrowers to pay extra payment with a capped limit.
How about having a bit of both? Both variable and fixed rate have their own advantages and disadvantages. According to individual’s financial situation, you may use both to help you afford a home loan. Talk to our lending expert if you are seeking more information or advices, we are more than happy to assist you.
How Fear Affects Investment in Shares Vs Property
(by Eric Wong)
With stock market crashing and talk of property bubble across all media platforms, a lot of investors are in panic mode.
While news media like to focus on shorter time frames, savvy investors only look at the long term (short term investors are speculators, not investors).
If the graph is studied carefully, you will see the difference between what happens to share prices versus property price when fear sets in.
Property owners HOLD during tough times, rarely do panic set in that causes the market to be flooded with property for sale.
On the other hand, share investors SELL during tough times, nearly all share investors have the mentality of cutting losses when market dips. And prices fall sharply because fear causes them to accept any price the buyers offer.
Right now, fear has set in across the world with share markets plummeting and property price crashes being “predicted”.
If the impact of fear is consistent with the GFC in 2007/2008, I strongly believe the property market will recover a lot quicker than the share market.
{About the author}
Eric Wong is a real estate professional with many years of experience within the property division of Ernst and Young analysing companies including Mirvac, Westfield, AMP and Meriton. He is one of only a handful of Australian property professionals with qualifications as a chartered accountant and a real estate agent.
You can contact him on 0405 629 338 to discuss your property needs. To register for upcoming off-the-plan investment opportunities, visit http://property.zikira.com/projects.
2016 Year of the Monkey
With Chinese Lunar New Year approaching on the 8th of February, Australia Finance House like to take this opportunity to wish everyone a Prosperous and Fruitful 2016. If anyone is interested to find out your Chinese Horoscopes predictions in 2016, below is one of the websites for that you can go to just for fun… www.chinesefortunecalendar.com/2016
Celebrating Chinese Lunar New Year with NAB
Early Chinese Lunar New Year celebrations with NAB. Thanks to my NAB Business Development Manager, John Eldick, for the invitation. It was a fantastic night with charity raffle tickets draw, dance performance, beautiful food, and traditional lion dance. Highlight of the night for me was the lion dance and giving the red packet to the lion. Lion dance is believed to bring fortune and good luck to the business, and I am hoping that 2016 will be a prosperous year for AFH and also for everyone else.
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