While there was talk about the RBA cash interest rate being lowered yet again for Christmas, the RBA kept the rate steady at 2%. If you are thinking about obtaining a home loan, we must warn you that rates aren’t going to stay at record lows forever.
In a suburb like Rockingham, whose housing market lead WA in capital growth from November 2014-October 2015 with a rise of 13.1%, playing “housing market roulette” can cost you thousands of dollars for every month you guess wrong.
That means that, while the interest rate could go down by 0.25% in February, housing prices are still rising, 3% from September 2015 to October 2015. That means it will cost more money for a deposit, whether or not the interest rate rises, falls or holds steady.
What it Means to You
There are two factors at work here. The first factor: the interest rate, which some say will fall, some say will rise and some say will stay steady. The second factor: housing prices, which are falling in some markets across Australia, are generally flat in Perth and are rising 13.1% per annum in WA.
If you are thinking about buying a home, we think it’s time to “pull the trigger” before prices begin to rise again everywhere. We know it can be tempting to wait for interest rates to fall further but a variable rate loan can allow you to take advantage of future rate cuts while providing flexible terms that allow features such as extra payments at no charge to pay off your home faster and offset accounts, which can also allow you to pay off your home faster. Both give you access to money you have paid “ahead” of your original schedule.
Call a Mortgage Broker at Smartline Rockingham Today
To learn more about a home loan, call us today: (08) 9527 1800.