As far as a mortgage is concerned, there are a few particularly important factors that need to be considered above all else. First up we have interest rates and these come in two types; variable and fixed. Next up, we have the repayment duration (anywhere up to thirty years in most cases). Finally, we have the lender – and choosing the right one can definitely play a role in your future finances.
But rather than focusing on all three at once as the New Year rapidly approaches, our team here at The Mortgage Calculator are finding ourselves asked for our advice regarding the property market in the year ahead. After performing an extensive amount of research, we have some good (or great news) and some bad news…
The bad news
It’s always best to get the bad news out of the way first – that way we have something to look forward to! In this case, our research has revealed that the price of properties in Melbourne, Perth and Brisbane are all expected to rise throughout the first and third quarters of 2017. This can be great news for sellers; but not so much for buyers.
In Melbourne, property values are expected to increase by anywhere between 11 and 16%, bringing the average home to over $500,000. But fear not – what we discovered next might come as a saving grace for those hoping to apply for a mortgage over the course of the next few months.
The good news
Banks have known about this increase for at least half a year now and as the data spreads throughout the property market (and the entire industry as a whole); many lenders will do their part to help potential buyers. If you thought that rates were low right now, then just wait until next year. With the majority of lenders in Australia promising to keep their interest as low as possible for the foreseeable future; there are even those that are considering dropping theirs even further.
Now you might need to borrow a little more, or save up a larger sum toward your deposit – but at least you’ll be able to relax in the knowledge that what you do borrow, will be subjected to some of the lowest rates in history.
Now we understand that there will be those of you that might feel a little reluctant as far applying for a mortgage goes; but our advice to you would be to overlook the price increase, because what goes around comes around. You could wait until 2018, but rates might go up by then and even if you do save a few thousand in property costs; your interest might result in higher repayments in the future. What’s the harm in comparing loans right now and weighing up your options? If house prices go up again in 2018 and as the years go by – you could end up sitting on a fortune if you act now