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hello Evan Welcome to the summer edition of Haven. It’s hard to believe that we’re just weeks away from Christmas - it’s such a cliché but the year really has flown by. Latest statistics reveal that one in five Australians who take out a home loan are opting to fix their interest rate. In this edition we delve into the pros and cons of fixed versus variable. We also take a look at using the equity in your home to borrow for investment purposes. With many parts of Australia experiencing a flattened real estate market, now could be a fine time to take the property investment leap - it’s generally a buyer’s market and this could really work to your advantage. It’s Maggie Beer’s favourite comfort food and let’s face it, who doesn’t love roast chicken? We’ve been testing up a storm in the Haven kitchen and have the definitive step-by-step guide to guarantee you serve up the perfect roast chook. Make sure you heed Jamie Oliver’s tip by using a free range (and preferably organic) chicken, and you’re well on your way to comfort food bliss. Don’t forget to enter our competition to be in the running to win $1,000 cash (that would be handy with the festive season spend looming). We’re looking for yarns about the funniest, oddest or most cringeworthy gift you’ve ever received. Make us smile with your tale and the $1,000 could be on its way to you. We wish you the very best of the season and a safe and happy new year, and look forward to seeing you again in 2012. Kind regards, Evan Sourbis
Shop 8/505 Henley Beach Road |
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One in five Australians taking out a home loan is now opting to fix their interest rate, according to a recent AFG Mortgage Index. Not only are fixed rates proving popular in the midst of global economic uncertainty, many borrowers are cashing in on unprecedented, increased competition around fixed rate loans. Traditionally, lenders have set fixed rates a smidge above the average variable rate. At the moment, however, many institutions are offering fixed rates below others’ variable rates, prompting savvy borrowers to shop around. The main benefit of a fixed rate is certainty. Regardless of shifts in the economic sands, your mortgage repayments stay the same, allowing you to budget with more confidence. If official interest rates rise, your mortgage repayments are unaffected. On the flip side, of course, if interest rates drop, you won’t benefit. With experts wavering on whether local interest rates will go up, down or nowhere over the next 12 months, now could be an opportune time to take advantage of special offers around fixed rates. Some lenders, for example, are offering fixed rates at 0.8 per cent lower than the standard variable rate of other institutions. On a $300,000 loan, that equates to a $200 saving in interest each month. Fixed rates are generally based on what the economy may do over the next three to four years, while variable rates are more aligned to the current cash rate, set by the Reserve Bank of Australia. At the moment, this is overlaid with the fact lenders are looking to drive movement in the market through competition. Although Australia’s economy is deemed very stable against the backdrop of the European debt crises and slow economic recovery in the United States, home owners have been happy to sit on the sidelines to see how it all plays out before making any decisions about buying and selling. As a result, many financial institutions have been trying to entice us back in the game with competitive fixed rates. click here to continue reading
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Australian home owners scored a win on July 1 this year when lenders were banned from charging exit fees on home loans, making it more enticing for borrowers to shop around for a better deal. Exit fees were generally charged for the first four or five years of a mortgage to discourage borrowers from switching to a competitor before the lender had made a profit on the loan. Unable to now charge exit fees on variable loans, many lenders are making sure they cover their costs upfront with higher set-up fees. If you are thinking of switching, you should make sure you get all the facts and compare like with like so what you gain in the short term isn’t lost in the long run. Take into account loan establishment fees, ongoing account fees, the cost of any property valuations required by your new lender and settlement fees when doing your sums on how much you will be saving by switching. |
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If you have equity stored away in your home, now could be the perfect time to tap into it for an investment property. Equity is simply the difference between the value of your home and what you owe on it. If you have a property valued at $500,000 and owe $200,000 on it, you have $300,000 equity available. There are a few reasons why the time is ripe for home owners to scout out an investment property. Firstly, property prices have flattened across most of Australia in the wake of global uncertainty. However, key indicators in the US now point to a recovery there, which our market is likely to follow, especially given our strong economy. So, not only is now a buyer’s market but there’s a good chance of capital gains in the first few years of ownership. Secondly, interest rates are low. After the recent drop in official rates, there is strong speculation they won’t dip further in the short term. Thirdly, we still have a housing shortage here in Australia, which continues to drive low rental vacancy rates. That means good properties rent easily. Where to begin Start with a visit to your broker to get a rough idea of what you can borrow. Your broker can estimate your equity, talk through the types of loans available and give you a rough idea of repayments. Then you will know what you can afford before you start looking at properties. |
You can also do some rough sums beforehand with Our borrowing power calculator. A broker can find the right loan for your circumstances and shop around for the best deal. One of the most popular products among property investors is a line of credit. It acts like a big overdraft at a home loan rate, giving you instant access - as a rule - to up to 80% of the equity in your home. Interest is only paid on the funds you use. It’s a very elastic, convenient product. But one word of caution: you need to be disciplined with your cash flow. Easy access to equity can be a temptation for many borrowers to spend up big on depreciating assets that offer no investment value and only add to your overall debt. Capital gains or rental return? You should decide whether you want strong rental returns or decent capital growth over the next several years on your investment. If you are in a high tax bracket and looking to create a tax advantage through an investment loss, you will be looking for capital gain. |
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We love a sunburnt country, but most of us are not fond of all the creepy crawlies that live in our beloved bush, not to mention the stingers in our seas. Summer is the season we all come out to play, so it’s important you and your family know what to do if someone is bitten or stung. While most bites and stings inflict short-lived pain, some can be deadly. Knowing what to do could save someone’s life. SNAKES How dangerous |
How to avoid They only attack as a last resort when they feel threatened or are harmed. Most snake bites occur due to accidental encounters. To avoid being bitten |
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Did you know? • It takes a week to make a jelly bean. |
