TestPosted in '' on September 4, 2010 Test
Election outcome good news for ratesPosted in 'Economics, Home loans, Interest rates' on August 23, 2010 A hung parliament has added to uncertainty in the outlook for the
Australian economy, with investor and consumer activity likely to remain
on hold until a government is officially elected.
In an extraordinarily close result in the federal election over the
weekend, Australians may have to wait as long as 10 days before they
know whether Julia Gillard or Tony Abbott will be governing the country.
“Coming at a time of renewed concerns regarding the global economic
outlook, the Australian election outcome will likely add to local
investor nervousness in the short term,” AMP chief economist Shane
Oliver said over the weekend.
Concerns over who will govern the country,
and the possible move towards less "business-friendly policies" as a
result of increased Greens power, and the absence of productivity
boosting longer term reforms under a minority government, will all add
to jitters in the economy this week. While it wont be the sole factor, in the medium term, it will play in the mind of the Reserve Bank when determining interest rate settings. (source: The Advisor Magazine, 23 August)
All I want for Christmas is interest rates on holdPosted in 'Economics, Home loans, Interest rates' on August 16, 2010 by Paul Cunningham
It is very unlikely that borrowers will be hit with any more interest rate rises this year after the release of softer jobs figures earlier this month. According the the Australian Bureau of Statistics (ABS) the unemployment rate was 5.3 per cent in July, compared with an unrevised 5.1 per cent in June. These latest figures, combined with the recent lower than expected Consumer Price Index result, make a compelling 'wait and see' approach for the Reserve Bank (RBA)
The softer job number should not come as a surprise following several months of a weakness in retail spending and caution from manufacturing and services sectors. The good news from these figures is that interest rates will clearly be on hold until at least the end of the year, with most economists talking about 2011 as the next move. And if the soft numbers continue then the next move by the RBA may even be a cut. While this may seem unlikely, there is some chance however small, given the weakness we are seeing in global markets.
The RBA will be looking closely at the next set of Consumer price figures as an actual guide for its next interest rate decision.
(source: Sydney Morning Herald, 12 August 2010)
4 tips before you refinance your home loanPosted in 'Home loans, Interest rates, Mortgages' on August 6, 2010 Refinancing your
loan is a great way to access things like competitive interest rate, better
customer service or a product that more closely matches your current needs. But
when it comes to tinkering with your mortgage, there is definitely a
right way and a wrong way to do it.
There are situations where refinancing makes perfect
sense. If your current lender’s interest rate is higher than its
competitors, for instance, or you need to access cash to finance things like
renovations, investments or education, then refinancing can be an effective way to tap into your equity.
However, you need to consider the process carefully, as
there are many factors that influence the outcome of a refinancing
application. Before you decide to move your
mortgage to another lender, make sure you answer the following
questions:
Has my financial situation changed?
If your income has changed for any reason, you may not have the
same borrowing power today as you did when you applied for your existing
loan. Financial factors that can impact your borrowing power include:
moving from full time to part-time or casual employment; starting a new
business, increased personal and consumer debts,
such as credit cards or car loans; or a drop in income temporarily
to have a baby.
What is my motivation for refinancing?
If your personal debts such as credit cards and personal loans have
escalated, and you wish to refinance so you can consolidate them into
your mortgage, tread carefully. Its ok to use this method reduce your monthly commitment but dumping credit card debt into your home loan will greatly increase the amount of time you’ll take
to pay it off. It's important then to consider how you new loan will be structured to help you avoid this.
Will I have to pay exit fees to get out of my current loan?
Obviously your existing lender doesn't want you to take your valuable business elsewhere,
and they may be able to financially penalise you for doing so. Make sure you check
your loan contract carefully: exit fees, pre-payment penalties and
deferred establishment fees can equate to thousands of dollars and might cancel out any benefits you’ll receive by refinancing.
Has my credit rating changed since I first got this loan?
If your credit history has taken a hit due to outstanding debts or
financial difficulties that you’ve experienced since you were approved
for your current loan, you may have trouble accessing the rates and products you have if you refinance. If you're in doubt about your credit do a credit
check prior to applying elsewhere.
(source: Your Mortgage)
Interest rates to continue on holdPosted in 'Economics, Interest rates, Mortgages' on August 3, 2010 by Paul Cunningham
THE RBA kept interest rates steady for a third straight month today, after soft inflation and retail data amid worries over global growth.
In spite of strong employment growth, data continues to indicate softer conditions across most sectors of the economy. Last week, official headline inflation figures for the June quarter showed a weaker-than-expected quarterly rise of 0.6 per cent, taking the annual headline rate to 3.1 per cent. Underlying inflation (measurement that excludes volatile price movements) showed prices rose 2.7 per cent in the year to June, This is right in the middle of the Reserve bank’s inflation target of 2 to 3 per cent. Price rises in utilities; health, alcohol and tobacco were almost entirely offset by falling prices for food, holiday travel, accommodation and fuel.
On top of this an unofficial measure of inflation, The TD Securities – Melbourne Institute Monthly Inflation Gauge, recorded its weakest growth in several months. Figures released yesterday showed the Gauge only rose 0.1 per cent last month, to an annual rate of 2.8 per cent. That represents a continuing moderation, after a rise of 0.3 per cent in June and 0.5 per cent in May. Additional data released yesterday showed new home sales fell by 5.1% in June, while a fall in house prices and weak retail figures have also added weight to the view that the RBA can afford to take a wait-and-see approach with what looks to be cooling conditions.
A senior strategist with TD Securities says the Reserve Bank is unlikely to move on rates until inflationary pressures emerge as a real problem. With the Unemployment rate at 5.1 per cent the economy is fully employed. If this was a trigger for tightening the RBA would have moved in the last month or two.
Most economists are now tipping the reserve to keep rates on hold at 4.50 per cent until 2011 when they have a chance to interpret data available later this year
(source: ABC)
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