The post Fixed or variable home loan in 2016? appeared first on Oak Laurel.

Is it better to have a fixed or variable home loan in 2016?

A common question clients ask when taking out a home loan or looking to refinance their home loan is: Should I fix my home loan? or Is it better to have a fixed or variable home loan in 2016?

Sometimes what the client really wants to know is: Will interest rates increase in 2016 or the next few years?

 Nigel Abery (PhD), Principal Mortgage Broker at Oak Laurel.

What influences interest rates?

It is not really possible to know with any amount of certainty if interest rates will increase, remain the same or decrease in the short and medium term. There are many factors that can influence both the Reserve Bank of Australia’s cash rate and the bank or lender mortgage rates.

The factors that the Reserve Bank of Australia board consider when setting the cash rate are contained in the RBA Governor Glenn Stevens’ statement that is provided after each meeting. Some of the reasons for these changes are stated with some commentary about the RBA decisions in other articles on this site. The RBA decisions mainly revolve around global and domestic economic conditions and inflation (including house prices).

The bank and lender interest rate are influenced by the RBA cash rate, other cost of obtaining and providing finance, Government regulation (banks and lenders change their interest rates in order to encourage or discourage certain types of borrowers) and the risk of lending (this can be risk of lending to a certain type of borrower or due to other conditions such as higher risk locations or property types). Banks and lenders can also manage these types of risks by increasing the deposit or equity required.

Why fix you mortgage interest rate?

There are a few main reasons that you may want to fix your mortgage interest rate:

1. If the fixed rate loan has a lower rate than the variable interest rate alternatives.
2. If you want to be sure that your payments will remain at the fixed rate level for a certain period of time.
3. If you think that interest rates will increase and you will be paying less by fixing your interest rate.

Why have a variable mortgage interest rate?

There are a few main reasons that you may want to have a variable mortgage interest rate:

1. If the variable interest rate is lower than the alternative fixed rate (similar to the above but in reverse).
2. If you want flexibility to make extra payments or repay or refinance the loan without paying a break fee penalty. Note that some fixed rate mortgages allow substantial amounts of extra repayments.
3. If you think that interest rates will go down and you will be paying less by having a variable interest rate.

Which is better, a fixed or variable rate loan in 2016?

Assuming that you don’t need the flexibility to make extra payments or the certainty your payments will not increase, the question really becomes do you think that bank or lender mortgage interest rates will increase in 2016.

Though it is difficult to predict, I suggest that we may be at or near the lowest interest rates that we will see in the short to medium term. This is because of a number of reasons:

1. The RBA has stopped indicating that they may cut and now have made more undecided statements that the cash rate could go either way.
2. Lenders, mostly banks have had extra regulatory burden placed on them and are becoming more risk averse and are pricing more risk into their rates.
3. Interest rates are already very low and the RBA can only cut so much without being cornered without even being able to threaten a cut. The RBA often talks about cutting the cash rate in an attempt to stimulate spending and the economy without the need to actually cut rates, this is called jawboning.
4. I am an optimist and believe that the economy will improve.

Disclaimer: nobody can predict with certainty what will happen to interest rates. This is not considered as financial advice!

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The post RBA cash rate update Feb 2016 appeared first on Oak Laurel.

RBA cash rate update Feb 2016

RBA cash rate update Feb 2016. The Reserve Bank of Australia left the cash rate on hold at 2% today the 2 February 2016.

In the Statement by Glenn Stevens, Governor on the Interest Rate Decision, the reasons given for leaving the cash rate unchanged included:

• mixed economic conditions around the globe;
• declining commodity prices, especially oil prices, and the continuing decline in Australia’s terms of trade;
• volatility in financial markets;
• non-mining parts of Australia’s economy strengthening during 2015;
• improving and above average business conditions;
• employment growth and decreasing unemployment rate;
• increasing lending to businesses; and
• constrained inflation, CPI rising by 1.7 per cent over 2015, with underlying inflation at about 2 per cent & growth in labour costs subdued.

The Governor of the Reserve Bank of Bank did not give any guidance of where interest rates may head in the future with the following statements.

class="x-blockquote" >At today’s meeting, the Board judged that there were reasonable prospects for continued growth in the economy, with inflation close to target. The Board therefore decided that the current setting of monetary policy remained appropriate. Over the period ahead, new information should allow the Board to judge whether the recent improvement in labour market conditions is continuing and whether the recent financial turbulence portends weaker global and domestic demand. Continued low inflation may provide scope for easier policy, should that be appropriate to lend support to demand.Glenn Stevens, Governor of the Reserve Bank of Australia

Commentary

The mixed signals in the global and local (Australian) economy appear to have the Reserve Bank Board uncertain what the future may hold and therefore deciding to keep rates on hold. Regardless of what may happen in the future the current improving employment data and low interest rates are good for borrowers.

By Dr Nigel Abery (Ph.D.)

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The post Melbourne property prices reach peak Feb 2016 appeared first on Oak Laurel.

Melbourne property prices reach a new high in February 2016

Melbourne property prices reached a new high in February 2016 according to property price data from Corelogic.

Melbourne’s property price rises are ahead of all of Australia’s other capital cities, including Sydney which has seen a decrease in property prices in recent months.

Melbourne’s property price rise trend has been a steady upward trajectory after dipping after the previous maximum in November 2015.

The auction clearance rates in Melbourne also show signs that the market is heating up again with good clearance rates according to Domain.com.au data.

Though the Melbourne property prices have hit a new high, the price rises are slower and steadier than the gains in the recent past that worried Government policy makers. So don’t expect Government banking regulator to require banks and lenders to carry out any further restrictions on investment lending. There is also indication that the participation of property investors is not the main driver in Melbourne’s property price gains.

The restriction of property price gains to the Melbourne market and the cooling of the Sydney property market, where bubble fears were greatest, should still leave the door open for the Reserve Bank of Australia to cut interest rates if needed.

“The Melbourne property market has a good outlook for 2016, probably better than any other property market in Australia.” said Dr Nigel Abery (Ph.D.) Principal at Oak Laurel.

“Melbourne’s property market has good fundamentals, with more people choosing Melbourne to settle in that any other city in Australia” said Dr Abery.

“Melbourne is a great city to live in and that is why thousands of people are moving from other cities around Australia and overseas to live in Melbourne” said Dr Abery.

“Not all suburbs are the same so don’t expect that you will get average gains if you buy in a bad location. I would avoid inner city large high-rise apartments unless you investment horizon is super long term. Alternatively, if you buy a quality property in a good location you may expect to outperform the average price gains.” said Dr Abery.

“Look for suburbs where people high incomes and above average capacity to pay want to live. Convenient locations with good access to transport and amenities such as good schools are likely to continue to attract buyers willing to pay top prices” said Dr Abery.

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The post Bad credit truck finance: truck loans for people with adverse credit files appeared first on Oak Laurel.

Bad credit truck finance

Bad credit truck finance is available, Oak Laurel finance brokers can help!

Do you have bad credit and want to get a truck loan? Most people with bad credit get turned down by the banks and lenders. When you have bad credit you can end up thinking that there is no options for you to finance your truck, trailer or other equipment purchase. However, this is not true! Oak Laurel finance brokers get the tough truck and equipment loans approved!

Having a few dents in your credit file does not mean that you will be unable to get your truck purchase approved. It may be true under normal circumstances but Oak Laurel finance brokers are not your normal finance brokers. Oak Laurel finance brokers are specialists that get the tough loans approved!

STOP applying for finance immediately, you are only damaging your credit file even further but applying again and again and being rejected! Contact Oak Laurel finance brokers immediately! We can get you back on track to a clean credit file and financing your truck, trailer or other equipment that you need to run your business.

Did you know that Oak Laurel finance brokers can also help people that have only just registered their ABN? If you have only just registered an Australian Business Number (ABN) then most banks and lenders will not finance your truck, trailer or other equipment purchase. However, Oak Laurel can assist people who have only recently registered their ABN. This also means that you do not need to provide any financials such as tax returns, business Activity Statements (BAS), or even an accountants letter. We can assist new business owners to finance many types of equipment even when they have only registered their ABN or one day!

If you are looking for truck finance or know someone that is looking for truck finance or other types of equipment finance tell them about Oak Laurel finance brokers.

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Truck finance for new business startups

Truck driver can get finance for their new truck business!

Are you a truck driver? Chances are that you are working for a trucking company. If your trucking company does not treat you well and pay you enough maybe you would be better as a self employed truck driver. As a self-employed truck driver you could be making your own decisions about when and where you work and which jobs you accept and at what rate. But maybe you don’t own a truck, so how can you run your own trucking business without out a truck? Well you probably can’t run a trucking business without a truck but Oak Laurel can help you to finance a truck so that you can start your own trucking business!

Maybe you thought that you needed to have a proven trucking business with complete financial records before the banks and lenders would give you a truck loan! Well that is not always the case! Oak Laurel finance brokers can often arrange funding for new truck businesses that do not have any financial records.

Oak Laurel finance brokers get the tough loans approved! When you have been told NO by the banks we can often get you a yes from one of our specialist lenders who are more understanding and flexible that the traditional banks and lenders that you are used to dealing with.

Do you have bad credit? Oak Laurel can often still arrange a bad credit truck loan for you! The cost of a bad credit truck loan may be a little more than  if you have a clean credit file but if it gets you the funding you need to get you business going or keep your business then it may be worth a little extra cost until your credit file cleans up again!

Whatever your situation contact Oak Laurel to see what we can do for you!

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Happy Australia Day 2016

Happy Australia Day 2016!

Here at Oak Laurel we wish everyone here in Australia, and abroad, a Happy Australia Day 2016!

We hope that all you Australians enjoy the day off (or your extra pay rates for working on a public holiday if you are working). Today is a great day to spend with family and or friends to celebrate being Australian and the wonderful country that we live in!

Here are a few fun facts about Australia Day

Australia Day is celebrated on the 26th of January each year. Australia day is a day off for most Australians as it is a public holiday.

Do you know what Australia Day really symbolizes?

• The first Australia Day was January 26, 1808 marking twenty years since Captain Arthur Phillip, a Royal Navy officer, the first Governor of New South Wales and founded the British penal colony that later became the city of Sydney, Australia, raised the flag at Sydney Cove.

• In 1818 Lachlan Macquarie was the first Australian Governor to hold the first “official” Australia Day celebrations. It marked thirty years of European settlement in Australia.

• In the early part of the nineteenth century, Australia Day was called “Foundation Day” and was typically marked by sporting events including horse racing and boat races.

• On the 50th anniversary of the Sydney Cove landing, New South Wales was the first colony to declare Australia Day as a public holiday in 1838.

• By 1888 nearly all of the colonies had declared a public holiday to celebrate Australia Day, but it wasn’t until the 1940’s that January 26th was agreed upon by all states as the proper day to celebrate.

So, we hope that you enjoy Australia day and can appreciate what you are getting a day off for.

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The post Residential Construction Commencement Quarterly Record appeared first on Oak Laurel.

Residential construction commencement levels reach new high

Residential construction commencement levels in Australia have reached a new quarterly record high during the September quarter.

Australian Bureau of Statistics data shows that across Australia 55,532 dwellings commenced in the three months to the end of September 2015. This is an increase in construction commencements by 0.5% compared to the June quarter. Nationally across the previous 12 month to the end of September 2015 construction commencements rose by almost 11% to 215,329. The year to end of September value is 15% above the previous record of ~187,000 new dwelling commencements in 1994.

At the national level new dwelling commencements may have reached new highs but on a State by State basis the levels varied greatly.

Construction commencements by state were as follows:

• Northern Territory +17.4%,
• New South Wales +2.4%,
• Western Australia +1.7%,
• South Australia +1.2%,
• Australian Capital Territory +0.4%,
• Queensland -1%,
• Victoria -3.8 %,
• Tasmania -20.7%.

The Housing Industry Association has forecast that in 2016 Australian will maintain strong levels of new dwelling commencements though unlikely to reach new highs.

It is forecast that 2016 will bring a change in the mix of what is built and large geographical divergences across states and territories.

It is forecast that there will be increases in the short term for: detached houses; semi-detached dwellings (of two storeys); and units of one or two storeys. Geographically, the eastern seaboard markets are likely to remain strong, with some potential for the southeast corner of Queensland but New South Wales and Victoria remaining the strongest housing markets.

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Melbourne property prices show clear upward trend

Melbourne property prices show a clear upward trend after hitting a low point after previous highs at the end of November 2015. As of 20 Jan 2016 Melbourne property prices are just shy of the previous record highs that occurred at the end of October 2015 according to property price monitor core logic.

Sydney property prices continue to soften and may be plateauing. No definitive trend can be observed in Perth’s property prices over the past few months. Brisbane has shown a general upward property price trend since mid 2015 but has dipped off previous high seen towards the end of December 2015. This follows data that Melbourne’s rent prices are rising in Dec 2015.

It should also be noted that this is the time of year when property sales (both auctions and private sales) are lower than average. When the peak selling and buying season arrives we will be able to get a fuller picture of where the property market is heading and at what rate.

“The data shows prices show a moderate and steady increase in the property prices in Melbourne with nothing for policy maker to be worries about” said Dr Nigel Abery (Ph.D.)

“Melbourne appears to be the best performing property market in 2016 with prices and rents increasing at a moderate and sustainable rate.” said Dr Abery

“It is important that property investors remember that the capital cities are not homogenous property markets, some suburbs will be increasing whilst others decreasing in price.” said Dr Abery

“Property is a long term investment. Australia’s population growth make investing in property in Australia’s major cities a sensible choice. These small rises and falls in property prices observed recently will seem insignificant over the longer term.” said Dr Abery

Are you looking to finance a property purchase or refinance your existing loans?

Contact one of our mortgage brokers in Melbourne or wherever you are to assist you with your finance.

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The post Commercial property purchases popular among foreign buyers appeared first on Oak Laurel.

Commercial property purchases popular among foreign buyers

All of the focus on foreign ownership has been on residential property and the Government forced the sales of foreign owned residential property has made front page news. However, not much attention has been focused on foreign ownership of Australian commercial property. Commercial property in Australia remains as popular as ever according to an analysis by CBRE.

Figures show that the sale of office, industrial and retail property valued at over $5 million totaled $28.4 billion during the 2015 calendar year. 

These values are only 4% less than 2014’s  record sales of $29.6 billion.

According to the CBRE’s analysis, 2015 had the greatest market share of foreign investors investing in commercial property with $11.7 billion in purchases equating to 41% of the total commercial property sales in Australia.

It has also been observed that Australian investment is also flowing offshore in what is now a globalised market place.

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The post Construction home loans appeared first on Oak Laurel.

Construction home loans – Build your dream home

Building your own dream home can be an exciting adventure for you, but it can also be fraught with problems. The last thing you need is a problem with your finance delaying your settlement or holding up progress on the construction and costing you time and money. This is why it is so important to use a mortgage broker that understands construction home loans.

Some people feel that the personal relationship that they have with the lending manager or bank manager at their local branch will solve all of their problems when it comes to borrowing money. However, there are certain limits that your local bank branch staff have when it comes to offering you the best alternative. Primarily is that they can only offer you a limited range of loans, the loans that their bank sells.

At Oak Laurel we have access to a wide range of lender and this give you more construction loans to choose from. Not only that our mortgage brokers understand construction loans, so not only will they be able to find a construction loan package that meets your needs but they will be able to guide you through the process construction loan process so that you don’t make a costly mistake.

The convenience of working with an Oak Laurel mortgage broker can far outweigh working with your local bank branch staff. Furthermore, because Oak Laurel brokers have access to a wide range of lenders, more than most of the mortgage broker franchise brokers have, we have options that they can’t offer you.

Construction home loans are more complex and require more time and effort to assess and get approved than regular home loans. This is because the lender is assessing and approving something that is not yet built. There is also a lot more paperwork that needs to be assessed and approved. This can include, contract of sale, the building contract, builders specifications and council approved plans, along with all the other documents usually required to assess a home loan. Therefore it helps if your broker understands the intricacies of construction loans and the policies of the different lenders.

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