Property Archives - Frontrow Financials

How did property prices go in 2024? And what’s tipped for 2025?

2024 has been a year of change, with property values and market conditions shifting across many of our state and territory capitals.

In fact, the only constant has been the Reserve Bank of Australia’s cash rate, which has held steady at 4.35% since November 2023.

After a year that saw home values rise nationally by 5.5%, according to CoreLogic, it’s worth looking at what we can expect in the new year.

The Australia-wide picture

November 2024 saw home values rise nationally by a barely perceptible 0.1%.

Technically speaking, it’s the 22nd straight month of growth since January 2023. But realistically, 0.1% hardly qualifies as a cracking pace of growth.

Quite simply, CoreLogic says the market is losing steam, and a downturn is gathering momentum – particularly in Melbourne and Sydney.

That’s good news for buyers who may be able to take advantage of softer price growth in 2025.

However, in a market as large and diverse as Australia, it pays to drill down to local trends.

With this in mind, let’s take a look across our major capital cities.

Queensland

Brisbane home prices have climbed 12.1% over the past year. Can the growth be maintained? Maybe, though perhaps not to the same

extent. Domain is predicting price growth ranging from 5-7% for houses, and 7-9% for apartments in 2025.

New South Wales

Sydney is up 3.3% over the past year and likely hit a cycle peak in August. Home values have flattened or fallen ever since, says

CoreLogic, with the city’s median home price of $1.2 million proving an affordability challenge. Domain is predicting a 4-6% rise

in home values through next year.

Victoria

Melbourne took out the wooden spoon for property price growth in 2024, recording a 2.3% fall in prices over the last 12 months. The

new year could bring a change of pace. Domain predicts house values could rise 3-5% in 2025 though apartments are expected to dro

p by up to 2%.

Australian Capital Territory

Home prices in Canberra have barely budged in 2024, declining by just 0.1% in the past 12 months. Domain is taking an optimistic

view, expecting house values to rise by 3-5% next year, while unit values could drop by up to 4%.

Tasmania

Hobart values fell 1% in the year to November, bringing the total falls to 12.1% since the market peaked in March 2022. However, more

affordable prices plus generous stamp duty reforms launched in mid-2024 could make 2025 a big year for first home buyers in Tassie.

South Australia

Home values in Adelaide have jumped 14% over the past year. However, CoreLogic says Adelaide’s 2.8% rise in values over the past

three months was the lowest since June 2023. Even so, there may be plenty of steam left in the market, with Domain forecasting a 7-

9% rise in prices in 2025.

Western Australia

Perth has seen home prices soar 21% over the past 12 months. But with listings up 33% in November, CoreLogic says the pace of price

growth is slowing. Domain is expecting prices to rise by a more modest 8-10% next year – still nothing to sneeze at.

Northern Territory

Prices in Darwin have barely budged this year, mustering up just 0.9% growth over the past 12 months. Next year may be better. SQM

Research is predicting home values in Darwin could rise anywhere from 3% to 10% in 2025 depending on interest rates and population

growth.

Get to know your borrowing power

A cooler market could be the opportunity you’ve been itching for to buy a property next year.

Call us today if buying a first home, investment property or upgrading your current home is on your radar for 2025 – we’ll help give

you a clearer idea of your borrowing power.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Thinking of buying a holiday home? Here’s what to weigh up

It’s that time of year when we lock up our home, load up the car, and hit the highway to unwind with an all-too-brief sea or tree change.

It can add up to a wonderful experience, and some holidaymakers will stretch the vacation buzz a lot further by purchasing a holiday home.

But given the current state of property prices, is a weekender a smart move?

Here’s what to weigh up.

A holiday retreat is a major outlay

No matter whether you’re thinking of a coastal retreat or hinterland hideaway, homes in popular holiday spots can be pricey.

As a guide, an apartment in Coolum on Queensland’s Sunshine Coast, can set you back about $870,000.

If you’re thinking of a house in Byron Bay on the NSW north coast, you’ll likely need a budget of around $3.5 million.

That said, there can still be relatively affordable holiday spots.

A unit in Victoria’s seaside town of Portland, about four hours drive from Melbourne, can cost around $304,000,

And in the wine growing regions of WA’s Margaret River, or Tanunda in South Australia’s Barossa Valley, you may be able to pick up a house priced from around $670,000-$770,000.

Can a weekender still be a smart investment?

Wherever you buy, a holiday home is likely to involve an outlay of several hundred thousand dollars.

That sort of money could pay for a lot of vacations around the nation – and across the world.

So, first and foremost a holiday home should stack up as a good investment.

This is where it’s worth putting down the pina colada and taking off the rose-tinted glasses.

Ideally, you probably want your holiday home to deliver long-term capital growth.

The thing is, vacation properties tend to be located in regional areas where price growth can be very different from our big cities.

That’s not to say regional neighbourhoods don’t tick the box for capital gains.

CoreLogic points to areas such as Mackay, Geraldton and Townsville, which are seeing “exceptional growth” driven by affordability and lifestyle appeal.

However, not all regional markets are booming.

The holiday town of Batemans Bay, on NSW’s south coast, and Victoria’s coastal city of Warrnambool, for example, have both experienced declining values over the past year, according to CoreLogic.

Long story short, be sure to research any area you’re looking at buying into to get a feel for how property values are likely to move in the future.

Can a holiday property pay its way?

Gone are the days when most holiday homes stood empty for most of the year.

Platforms like Airbnb and Stayz offer a chance to put a vacation retreat to work earning short-term rental income.

The catch is that various state governments are limiting the number of nights these properties can be offered for rent each year.

Also, a number of councils such as Hobart City Council, have raised rates for short-term accommodation properties.

These factors need to be accounted for in your holiday home budget.

On the plus side, if your vacation property is rented out or available for rent, you may be able to claim at least some of the ongoing costs as tax deductions each year.

Funding your holiday home

Loans for holiday homes work in much the same way as a regular mortgage, but with a few differences.

Demand for properties in holiday hot spots can be highly seasonal. This increases the risk for lenders, who may ask you to stump up a bigger deposit compared to an owner-occupied home loan.

Your vacation retreat could also be seen as an investment property, meaning you could be asked to pay a higher investment loan rate.

The big plus is that if you are a home owner, you may be able to use your existing home equity in lieu of a cash deposit on a holiday property.

Get in touch

Call us today to find out more about loans to buy a holiday home.

It could turn a vacation pipedream into a fun-filled, financially rewarding reality for your family.

Thinking of installing a swimming pool for summer?

Fun fact: more than 3 million Aussies have a backyard swimming pool or spa.

That’s about one-in-eight Australians, or as many as one-in-four in areas like the Gold Coast.

This popularity isn’t surprising.

Pools offer plenty of fun, with perks that go beyond staying cool in summer.

A pool can help you stay fit, encourage your kids to develop water confidence, and when it comes to home entertaining, a swimming pool can do lots of heavy lifting.

How much does a pool cost?

Before pencilling in dates for poolside barbecues, it’s important to set a budget for your swimming pool.

At the more affordable end of the scale, an above-ground pool can cost around $3,500 to $12,000.

If you’re keen on an inground pool expect to pay a lot more, with your budget likely needing to start at about $35,000 and can go as high as $100,000.

Bear in mind, a pool usually needs a few extras including a filter to keep the water clean. You’re required by law to install childproof fencing, and some basic landscaping will help keep your pool clean and inviting.

All these extras should be included in your budget.

Don’t forget to allow for ongoing expenses too.

The additional power and water consumption plus pool supplies such as chlorine can all add up.

Depending on the size of your pool, regular maintenance can cost between $65 and $165 each month.

Can a pool add value to your place?

Pools are super popular when it comes to real estate.

In 2023, “pool” was the most-searched term among home buyers across Australia.

Even so, the jury is out on how much value a pool will add to your home.

Real estate group Ray White says your property’s value is expected to rise by at least the cost of installing a swimming pool.

So if you spend, say $50,000 on a pool, you could hope that the value of your place rises by a minimum of $50,000.

Still, a pool doesn’t always increase the number of interested buyers at sale time. The cost and effort of maintaining a pool has the potential to turn some buyers away.

A quick call to a local real estate agent can shed light on whether pools are a sought-after feature in your area.

Ways to fund your swimming pool

The next step is to decide how to pay for your pool.

Dipping into savings means avoiding interest charges though it can be a good idea to have sufficient spare cash available to manage unplanned bills or expenses.

Using a personal loan could keep savings intact, and the fixed term provides a clear end date when the slate will be cleared.

Or, you may want to tap into home equity and add the cost of a pool to your home loan – which can come with the opportunity to review your current loan to check that it’s still a good match for your needs.

Ready to dive in?

You’ll want your new pool to last for many years – but perhaps not the loan that pays for it.

That’s why it’s important to talk to us about financing your swimming pool.

We’ll dive into the market to track down the option that’s suited to your needs, leaving you free to straighten up your backstroke, dust off the pool noodles and focus on the fun times ahead in your backyard paradise.

How much does LMI really add to a home’s cost?

Saving for a 20% house deposit is like house training a wilful Labrador. It requires plenty of patience and persistence. Not your thing? You could take out lenders mortgage insurance (LMI). But how much extra does that cost? And can you avoid paying for it? (for the LMI, not the dog…)

LMI is a type of insurance that protects the lender (not you or any guarantors) if you can’t keep up with your home loan repayments.

It’s typically applied to home loans when your deposit is less than 20%. And right now, that’s the case for many home buyers.

A recent Mozo study found 84% of Australians saving a deposit can’t currently afford the full 20% deposit needed to avoid LMI – in no small part due to increasing property prices.

In fact, the national median property price is now $973,300, up from $949,400 in December last year and $649,300 in June 2019.

So, let’s shed a light on how much LMI can cost – plus ways to make the expense more manageable or possibly disappear altogether.

How much LMI could I pay?

LMI typically works out to about 1% to 2% of your loan value, depending on the size of your deposit and the size of your loan.

The more you can stump up as a deposit, the lower the LMI premium can be.

We’ll use this handy LMI estimator to show how it works (feel free to give it a go yourself).

Let’s say you’re buying an apartment costing $500,000. If you have a 10% deposit of $50,000, LMI will likely cost around $8,680.

It all depends on the price of the property you’re buying and your deposit amount. For example, the LMI premium can be as high as $36,480 if you have a $150,000 deposit for a $1,500,000 home.

The good news is that there are ways to manage – and potentially even bypass – LMI. Here are three ideas to consider:

1. Talk to us

Unlike other types of insurance, you can’t shop around for the cheapest LMI provider. Your bank will organise cover and let you know how much you’re up for.

However, different lenders use different LMI insurers. So the premium can vary depending on the lender you choose.

That’s why it’s important to talk to us.

We can explain what the LMI premium is likely to be for each lender you’re considering. This could see you potentially save on LMI.

2. Pay LMI off gradually

Instead of paying LMI in a lump sum, your lender may agree to add the cost to your loan balance.

This way you can pay LMI off gradually as part of your normal home loan repayments, but the downside is you’ll likely be paying interest on that LMI amount over the life of your home loan.

Remember that example we used earlier of a $500,000 apartment with a $50,000 deposit?

Adding the LMI premium to your home loan in that scenario could result in your monthly repayments increasing by about $45-65 per month over the life of a 30-year home loan, depending on the interest rate at the time.

Alternatively, some LMI insurers can allow you to pay your LMI premium in monthly instalments until you’ve got a suitable amount of equity built up in the property that your lender is satisfied with.

3. Have LMI waived altogether

Like the sound of sidestepping LMI completely?

Here are a few strategies that could scratch the cost of LMI from your buying budget:

– Use your job: some lenders waive LMI for workers in certain professions such as doctors, lawyers, accountants, vets, engineers and pharmacists.

– Tap into the Home Guarantee Scheme: this scheme sees the Australian government guarantee your loan, allowing first home buyers to buy with just a 5% deposit, or as little as 2% if you are a single parent – and no LMI to pay.

– Ask a family member to guarantee your loan: a guarantor can provide additional security, such as the equity in their own home, to raise the security on your loan up to the equivalent of a 20% deposit.

Next step? Contact us

If you’re having trouble saving up for a 20% deposit, contact us today.

We can help give you a clearer idea of what you could be up for in LMI, and help you discover any steps you may be able to take to keep a lid on the cost.

How to nail a home loan if you’re self-employed

It’s the great Australian dream for many: giving the 9-to-5 grind the flick and running your own show. But when it comes to taking out a home loan, being your own boss can dish up some unexpected hammer blows.

Rightly or wrongly, lenders tend to see self-employed borrowers as a higher risk compared to employees. That’s largely because, by and large, their income isn’t as guaranteed.

In addition, it’s likely their earnings won’t be the same each pay day – they may differ, sometimes substantially, from one month to the next.

In a lender’s eyes this has the potential to impact their ability to make regular loan repayments.

So if you own one of Australia’s 2.6 million small businesses, or you’re one of the nation’s one million independent contractors, here are some tips on how to convince a lender to back you.

Show you’ve been in business for a while

Banks often feel more comfortable if you have been self-employed for a while.

That can mean showing you’ve held your Australian Business Number (ABN) for at least a year or two. It demonstrates the business has got legs and possibly generates a reasonable income for you.

Gather proof of income

While employees can simply stump up a couple of pay slips as proof of income, if you’re self-employed you’ll likely need to pull together several pieces of paperwork as evidence of income.

The requirements vary between lenders.

You may be asked to provide your last two years of financial statements, including business and personal tax returns (a good incentive to stay up-to-date with your tax!).

Or the bank may just want to see several recent business activity statements.

In some cases, you may be asked for an income statement signed by you and your accountant that confirms your financial position and that you can afford the loan repayments.

With so much variation, it’s important to speak with us to know what different lenders look for.

Showcase your other assets

It’s not a bad idea to gather evidence of personal savings and investments.

A healthy track record of regular saving, in particular, can go a long way towards convincing a lender that you can handle home loan repayments.

Don’t hide your income or exaggerate expenses

The Australian Tax Office (ATO) estimates that about 10% of small businesses under-report income (aka cash-in-hand jobs) or exaggerate/overclaim expenses.

Not only can this get you in hot water with the ATO, but it can also impact your borrowing capacity.

That’s because generally speaking, the lower your income, the lower the repayments a lender may expect you’ll be able to afford each month.

Low-doc loans for self-employed home buyers

You may have heard about low-doc home loans.

These are purpose-built loans designed for self-employed borrowers who don’t have sufficient documents to apply for a regular home loan, hence the name “low doc”.

The beauty of low-doc loans is that they can provide a pathway into the property market.

The downside is that with less proof of income, the bank may see you as higher risk. And that can mean paying a higher interest rate.

The good news is that the higher rate may not apply for the life of the loan.

If you build up a record of reliable loan repayments, the bank may let you convert your mortgage to a full doc loan at a later stage, potentially providing the savings of a lower rate.

Not every lender offers low-doc loans. Talk to us to know which, if any, low-doc loans are suitable for your circumstances.

Get the ball rolling

Borrowing to buy a home may involve a little extra effort when you’re self-employed but it can be done.

And if you’ve created a successful business with a strong track record of generating a profit and income for yourself, the process can be straightforward and result in you landing a regular ol’ home loan.

The catch is that running your own show is likely to mean you’re stretched for time to put the application together.

If that sounds like you, give us a call. We’ll help take care of your home loan while you’re taking care of business.

What’s going on with negative gearing?

Negative gearing is in the headlines again. But what is it all about, and could it affect you? We explain how negative gearing works, why it’s so popular among investors, and why it’s attracting fresh attention.

Australians love property. So much so that more than one-in-ten adults (2,268,161 Australians) own an investment property.

So why is property such a popular investment?

Well, landlords can earn regular, consistent rental income. That’s extra cash to pay off the investment loan.

Additionally, over the past 100 years, national property prices have risen 10.9% per year on average, according to AMP insights.

This kind of return can provide a decent capital gain when the owner sells – which may also be eligible for a 50% capital gains tax (CGT) discount.

But there’s a third factor that can make property such an attractive investment, and that’s the potential tax savings of negative gearing.

How negative gearing works

‘Gearing’ simply means borrowing to invest.

‘Negative gearing’ is where the costs of owning the property, such as loan interest, council rates, insurance and so on, exceed the rental income the property generates.

The investor then claims a loss on the property via their tax return (this loss can be claimed even though the property’s value, aka capital gains, might have increased during that period).

The advantage of negative gearing is that this loss can be offset against other income, including your regular wage or salary.

The end result is the potential to save on your tax bill.

The tax savings can stack up

A simple example here will help.

Let’s say Deb’s annual salary is $125,000. At 2024-2025 tax rates, she pays tax plus Medicare levy totalling $28,288.

Deb recently bought an investment property. It generates $25,000 in annual rent, and the ongoing costs (including, but not limited to, strata levies, landlord insurance and loan interest) add up to $35,000 each year.

This leaves her with a loss of $10,000.

Deb now claims that loss on her tax return.

This will push her taxable income down to $115,000 ($125,000 salary less $10,000 property loss).

At this point, Deb’s tax (plus Medicare levy) is cut to $25,288, giving Deb an annual tax saving of $3,000.

This tax saving is more than just a sweetener.

It’s extra cash that can go towards repaying the investment home loan.

One of the controversies surrounding negative gearing is that many investors are unlikely to really be making a loss on their investment property because the value of their property usually increases each year.

The counter-argument to that however is that those capital gains are already subject to capital gains tax (albeit, usually discounted at 50%).

Why is negative gearing back in the news?

The latest kerfuffle around negative gearing arose because Federal Treasurer Jim Chalmers let slip that he had asked the Treasury for modelling around negative gearing and its impact on housing supply.

Prime Minister Anthony Albanese had stated “We have no plans to touch or change negative gearing.”

But of course, nothing is set in stone when it comes to politics.

That said, it would take a brave government to scrap negative gearing.

After all, those 2.2 million property investors are also voters – about half of whom negatively gear their properties.

Keen to buy an investment property?

It always makes sense to talk to a tax professional to know whether you could benefit from negative gearing.

As mentioned above, about half of property investors employ the strategy – it’s not the right fit for everyone.

Either way, if you’re keen to become a property investor and want to explore finance options that could help make that a reality, get in touch with us today.

We can help you assess your borrowing capacity and give some insights into how you could leverage the equity in your current property to make it happen.

Could rate cuts mean house prices heat up again?

September saw the nation’s official cash rate kept on hold once again. But there is growing consensus that the RBA may cut the cash rate at one of its next few meetings.

Several of the big banks, including Westpac and NAB, are expecting rate cuts in the first half of next year.

Others, such as the Commonwealth Bank, are forecasting a rate cut in time for Christmas.

While lower rates can’t come soon enough for many struggling mortgage holders, there is one issue that has been largely overlooked, and that’s how home prices might respond to a cash rate cut.

Here’s what the experts say may happen.

How home values could respond to rate cuts

First up, it’s worth pointing out that higher rates have been with us since mid-2022.

Yet property values have climbed rather than cooled since then, with the national median value rising from $752,507 in June 2022 to $807,110 today.

With that in mind, if interest rates fall, many pundits believe home values could head even higher.

The question is, how much higher?

Ray White Economics has done the maths based on past property price movements following a long-awaited rate cut.

According to their analysis, home prices nationally could rise by 0.6% within just one month of a rate cut.

REA Group has teased out the numbers further, saying that based on current median values, a 0.6% price rise could add an extra $5,000 to the average cost of a home across Australia.

And that’s for just one rate cut.

SQM Research director Louis Christopher says four cuts next year, while still a more remote possibility, could cause a huge rebound in property markets that have recently been weaker – such as Melbourne and Sydney.

The impact in your state capital

Exactly how home prices respond to rate cuts is likely to vary between locations.

Here’s what Ray White Economics and REA Group say could happen in capital cities in the first month after one official rate cut:

– Sydney: values rise 1.4% adding an extra $15,300 to the median property value.
– Melbourne: values rise 1.0%, pushing up the median price by $8,000.
– Brisbane: values climb 0.4%, adding $3,400 to home prices.
– Canberra: values increase 0.5%, pushing up prices by just over $4,000.
– Adelaide: values rise 0.3%, adding $2,300 to property prices.
– Perth and Darwin: no change to values.

It’s worth stressing that these numbers reflect how the market has responded to rate cuts in the past. Things could be very different in the future.

Perth, for example, currently has one of the nation’s strongest property markets, and Ray White Economics suggests that home values there could rise further following a cut to the cash rate.

Should I buy now?

Holding out for interest rate cuts may seem to make sense. After all, lower rates can boost your borrowing power.

But as we have seen, it could also work against you.

Lower rates may push up home prices, and potentially fuel increased competition among buyers.

That’s why we believe the “right” time to buy is when you are ready.

And today’s spring market comes with the added advantage of more choice for buyers.

According to CoreLogic, the flow of freshly-advertised housing stock hasn’t been this high at this time of the year since 2021.

So if you’re interested in buying your first or next home (with the potential benefit of getting one or several rate cuts soon after your purchase), get in touch with us today.

We’ll help you assess your borrowing power in the current market, and if you find the right house, we’ll help you find the right loan for it.

Why 9 out of 10 first-home buyers use a mortgage broker

When it comes to financial decisions, they don’t come much bigger than buying a home.

So it’s no wonder that plenty of first-home buyers feel a mix of nerves and excitement.

It’s also understandable that more than one-in-two first-home buyers feel the need for support throughout the home-buying process.

And for nine out of ten first-home buyers, that valuable support comes from a mortgage broker, according to a recent report by lenders’ mortgage insurance (LMI) provider, Helia.

How a mortgage broker helps

Finding a home you like is just part of the home-buying equation.

Identifying a home loan that is right for your needs, with a competitive rate, completes the picture.

But without skilled help this can be easier said than done.

The Helia survey found close to half (45%) of first-home buyers find it difficult to research which loans are right for them. More than one-in-two (52%) anticipate challenges in obtaining the loan they need.

This is where mortgage brokers can help.

We spend time getting to know you and your financial needs. This allows us to narrow down the choice of home loans that may be a good match for your needs.

We also know what lenders look for when they approve a home loan.

We can explain whether you’re home loan ready right now, or discuss the steps you can take to help pave the way for home loan approval in the future.

Better yet, we’ll stay in touch to offer tips and encouragement along the way.

We’re about more than a home loan

The benefits of a mortgage broker go beyond helping you land a home loan.

According to Helia’s study, first-home buyers say mortgage brokers:

– help home buyers understand their financial situation and borrowing power
– provide valuable support, guidance and expertise throughout the complex buying journey
– help save you time and effort.

We can also tap into our wealth of experience to suggest strategies and schemes you may not have considered, such as rentvesting, having a close relative act as a guarantor for your home loan, or the federal government’s 5% deposit First Home Guarantee scheme.

After all, there are multiple pathways to home ownership, and options such as rentvesting can open up new suburbs for you to buy in, while letting you live in the location of your choice.

Get in touch with us today to find out more.

TikTok vs talking to your broker? It’s no contest

Chances are, if you’re reading this blog via a social media site, then you’ve also watched a TikTok or Instagram video before, too.

In fact, more than 8.5 million Australians are active on TikTok and almost 14 million on Instagram – making both platforms key players in Australia’s social media landscape.

Social media platforms certainly helped us while away the hours during COVID lockdowns, and they’re still keeping us entertained as we check out what Korean office workers eat for lunch, short clips of our favourite comedians, or discover what a family of 10 has for breakfast.

But while many of the videos seem like harmless fun, there are some pitfalls you might want to avoid in the financial services landscape.

69 million views for #Mortgage

Interestingly, almost one-in-three Australians (30%) say they turn to social media for money guidance.

And Finder research shows people act on what they see, especially younger subscribers.

Almost one-in-two Gen Zs (48%) have taken action on their finances following guidance from a content creator, compared to 17% of Gen X.

That’s no real surprise. After all, the hashtag #TikTokmademebuyit has gained 31.8 billion lifetime views and counting.

What is surprising, is how many Australians head to TikTok or Instagram looking for home loan tips.

For example, #Mortgage content has racked up 69 million views on TikTok alone in the past 12 months.

Knowing who you can trust on TikTok

On one hand, it’s great that social media is breaking down money taboos.

And there’s no doubt that TikTok, Instagram, Facebook and LinkedIn can be handy sources of information for home buyers.

The catch is that almost anyone can post on social media, and when we’re talking about mortgages, which is the largest financial decision most people will ever make, the last thing home buyers need is dodgy advice.

So it pays to check who is behind the video.

Australia is one of the few countries globally where influencers on social media have to be suitably licensed before they can offer advice on financial products.

Mortgage brokers also have to follow strict industry rules when it comes to marketing and advertising. And many brokers are supported by their aggregator’s compliance team who double-check content for accuracy and other legalities.

However, TikTok and Instagram don’t just show videos created by Australians.

The platforms’ algorithms are designed to deliver more of the same sort of content you’ve shown an interest in.

So, it’s likely that if you start watching posts on financial strategies around home loans, debt recycling, debt consolidation or property investment strategies, you could come across content created by people based outside Australia, in countries where the rules are far less rigid, different, or non-existent at all.

The bottom line

No matter whether you’re just starting your home buying journey, or you’re ready for the next step on the property ladder, social media can be an entertaining and accessible source of information.

Just be sure to check that any content you’re viewing on home loans or investment property loans comes from a licensed mortgage broker based in Australia.

Better still, pick up the phone and give us a call.

Sure, we’d (probably) lose in a dance-off against your average TikTok creator.

But we can provide you with home loan information tailored to your situation. And that can give you a lot more value – potentially in a lot less time – than trawling through thousands of #homeloan videos and posts.

Fixed rates tumble: a sign of things to come?

While about 4-in-5 Australian households are currently on a variable-rate mortgage, fixed-rate home loans shouldn’t be overlooked.

Locking into a fixed rate can offer several advantages, including certainty of repayments – which may make budgeting easier – as well as protection from possible rate hikes during the fixed term.

Right now, the direction of fixed rates is attracting plenty of attention.

Many lenders are cutting their fixed rates

A growing number of lenders, including several major banks, are starting to cut fixed rates across all terms, according to Mozo’s latest banking round-up.

Macquarie Bank, Commonwealth Bank, HSBC, Bank of Queensland, Westpac and its stable of brands – St.George, BankSA and Bank of Melbourne – have all recently cut some of their fixed rates.

They were joined by smaller lenders such as Hume Bank, MOVE Bank and Great Southern Bank, which also dialled down their fixed rates.

What’s especially exciting is that a number of these rate cuts were surprisingly large, in some cases worth half a percent or more for 2- to 3-year fixed rate terms.

Why are fixed rates falling?

Home loan interest rates – both variable and fixed – are shaped by a variety of factors.

When it comes to fixed rates, a key driver can be lenders’ forecasts of where they believe interest rates are headed.

In this way, fixed rates can be a bellwether for the direction of future interest rates.

Among the major banks, Commonwealth Bank expects a 0.25% RBA rate cut in late 2024.

ANZ is anticipating the RBA to cut rates from about February next year.

NAB has pencilled in a rate cut by mid-2025, and Westpac is expecting several rate cuts starting in March 2025.

The good news is that none of the big four banks seem to be anticipating rate hikes any time soon, and that’s great for those with a home loan.

What could this mean for you?

The trend to lower fixed rates suggests variable rate cuts may not be too far away either.

Right now though, fixed rates can be lower than variable rates depending on your choice of lender, fixed term and the size of your deposit.

If you’re currently struggling with your home loan repayments, locking in a fixed rate for the next 1, 2 or 3 years might help give you some certainty and home loan repayment relief.

But you’ve got to weigh that up against the potential of any variable rate cuts that you could miss out on in that same time period.

Bear in mind, predictions of rate cuts are exactly that – forecasts, not guarantees of lower rates.

Another option to consider is splitting your home loan between fixed and variable rates, which can allow you to get the best of both worlds: the certainty of a fixed rate plus the savings of a variable rate if interest rates start to head south.

Call us today to understand if fixing or splitting your loan rate could help you save.