Rate cuts leaving investors well placed

Rate cuts leaving investors well placed

by 0 comments

Since November 2011, the cash rate has been cut six times, creating potential savings and portfolio growth for investors who act wisely on these changes, said one leading adviser.

Smartline Personal Mortgage Adviser’s executive director, Joe Sirianni, explained that these cash rate cuts could see investors saving $90,000 and cutting years off their loan term.

A 30-year $300,000 loan that was bought in May 2013 at seven per cent would most likely see investors paying around six per cent, Mr Sirianni said, due to banks passing on about one per cent.

If payments were maintained at their previous levels, this would take six years and nine months off the loan.

“If you’ve been used to making those repayments at that higher rate, it should then be reasonably painless to continue to keep them at that same level,” he said.

“Chances are most people won’t even miss the money and the benefits of not touching that money now for a major long-term benefit should outweigh any pain.”

Rather than $347,000 in interest, about $257,000 would be paid instead, or about 26 per cent less.

Further cuts, he explained, would compound this effect.

promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2017

With a combined sales volume of over $14 billion in 2017, the Top 100 Agents ranking represents the very best sales agents in Australia. Find out what sets them apart and learn their secrets to success.

featured podcast

featured podcast
How this agent grew his database by 50% in five years

In this episode of Secrets of the Top 100 Agents, Robert Pignataro joins host Tim Neary to explain how he increased his personal database by...

View all podcasts

Does the benefit of being part of a branded group outweigh the cost?

Depends on the group
Do you have an industry update?