Whilst this may be the first time you’ve heard the term ‘Rentvesting’, you’re likely to be hearing it more often as the word is becoming just as popular as the activity it describes.Rentvesting refers to the trend of home buyers preferring to purchase their first home as an investment, rather than to live in, whilst still living in a rental property themselves. Rentvestors, as the buyers are referred to, are typically young first home buyers who are taking advantage of Australia’s property market and keen to start building and creating their investment portfolios and their wealth.

Buyers who have not yet purchased their own home to live in have account for an estimated one third of investors indicating that many young Australians are choosing to rent with friends or stay at home with their parents a little longer in order to enter the property market.

The Rentvesting strategy provides first-time buyers with many benefits, both financial and non-financial including the following:

Buyers receive all the tax benefits of a property investor, including Depreciation and Negative GearingThe rent received from the investment goes towards the loan repayments and can, at times, be enough to cover the mortgageThe investor is provided an opportunity to get their foot in the door of the property marketBy renting, the investor is able to live where they want and in their ideal location where they can afford the rent but not necessarily afford to purchase a home in that area, i.e. Close to the CBDRenting also provides the young investor with the flexibility of extended travel or relocation

Rentvesting may not be a new concept but it is one that is gaining increased popularity as investors take advantage of the benefits of this strategy.

If you’d like to know more, please contact us today.

New year, same official interest rate.

The holiday is over. Or is it? Mortgage holders can continue to relish record low interest rates – the longest in history – as the Reserve Bank of Australia voted to keep the cash rate on hold. It has remained at 1.50% since August 2016.

The holiday is over. Or is it? Mortgage holders can continue to relish record low interest rates – the longest in history – as the Reserve Bank of Australia voted to keep the cash rate on hold. It has remained at 1.50% since August 2016.

Looking back at the last quarter of 2017, there is great news for first home buyers, owner-occupiers and local investors. Economists say that, with foreign buyers pulling out of the Australian housing market, more locals looking for a home or investment are set to increase their share in the market.

NAB Chief Economist Alan Oster says first home-buyers are entering into the market at the highest levels since 2011, making up 18% of new owner-occupier loans.

He also reports that “sentiment towards Australia's housing market remained at above-average levels in the fourth quarter of 2017” – a positive sign for 2018.

Time to refinance?

Experts point out that, while interest rates are expected to stay on hold for a while, they will eventually rise. That’s why many think now is the perfect time to look at refinancing.

There are currently a number of lenders offering variable rates below 4%. Refinancing now can help you get ahead on your mortgage repayments, saving you thousands in the long run.

If you’re interested in reviewing your options, as usual, we are always here to help.

Until next month!

Comparing apples with oranges doesn’t make sense. To make finding the right loan easier, and to make advertised rates as transparent as possible, we have comparison rates.

“In 2003, an amendment was made to the Uniform Consumer Credit Code (UCCC) that required comparison rates to be included in advertising. This change was made so that customers were not easily misled when it came to home loan interest rates.” The UCCC has since been replaced by the National Credit Code and the comparison rate requirement remains.

This allows consumers to compare apples with apples, to an extent. It does make it much simpler to hold two loan products side by side and, regardless of whether one has a slightly higher interest rate and no fees while the other is a super-low interest rate with high fees, see at a glance which one is the better deal financially.

However, it isn’t always this simple. Fees and charges, the rate at which principle is paid down and the total interest paid over the loan term all change depending on the loan amount and on the term, so you need to delve a little further into how that comparison rate is calculated.

While the comparison rate itself must be as prominently displayed as the interest rate – not buried in tiny fine print – somewhere on the advertisement, there will be a statement along the lines of ‘Comparison rate calculated on a loan of $150,000 for a term of 25 years, with monthly repayments’. If your loan is going to be for $900,000, the comparison rate for your loan will be vastly different.

“In order to get an idea of the comparison rate that applies to a loan, it is a good idea for borrowers to look at the comparison rate for the amount and term closest to the amount and term of their loan,” Darnbrough suggests. “It is always a good idea to look at a comparison rate that is specific to their circumstances, otherwise they can be misled.”

Get in touch with one of our friendly and experienced brokers who can help you make sense of advertised interest rates and calculate comparison rates for your specific circumstances.

Many mortgage brokers can help with your home loan and your business loan. There are several types of commercial and asset finance, so make sure you know the differences. Then you can decide which one will suit you.

What is commercial finance?

Commercial finance is an umbrella term for different kinds of business loans. They’re designed to help manage your capital and cash flow.

Types of commercial finance

Business overdraft: Your financial institution allows you to overdraw your existing business account up to an approved limit. You can only access the overdraft after your own funds have been used. The lender charges interest on the overdrawn amount. Businesses often use overdrafts as small loans, usually to cover cash flow gaps.

Line of credit: A long-term arrangement between a business and a lender, where the business can access funds up to an approved limit. The business may borrow all or part of the money at any time, but only owes interest and makes repayments on the amount used. Accessibility and flexibility are key here.

Term loans: A business borrows money and repays the lender in set amounts over a set period. Good for businesses that like predictable repayments.

Commercial rate loans: Also known as business markets loans. A business borrows a single loan amount, which can be spread across a combination of components, such as floating rates, fixed rates and cap rates. This helps to protect against interest rate movements.

Both attract a fee and are designed to service the cash flow gap between outgoings and income.

What is asset finance?

Asset finance includes a range of different loan structures that can help your business buy vehicles or equipment.

Types of asset finance

Chattel mortgage: Also known as an equipment loan. A business borrows money to purchase an asset. The business owns the asset outright, but the lender uses the asset as security until the business repays the loan. This frees capital and ensures the business has security against the loan

Whether it’s cash flow or capital, businesses need money. It’s good to know there’s a loan to suit every business.

Contact Leads Finance Brokers today if you'd like to know more about commercial and asset finance.

The Adelaide Bank/REIA Housing Affordability Report Overview for the September 2017 quarter has recently been published.

Darren Kasehagen, Head of Business Development at the Adelaide Bank, delivered some promising news for Home Buyers advising that: 'Housing affordability has improved nationally and is approaching levels last consistently seen in the early 2000s".

The quarter saw an impressive 22.8% increase in the number of first home buyers, the highest rate since September 2013. A combination of factors has contributed to this good news. Tighter rental markets with fewer investor loans (and therefore investor property supply) is starting to encourage those on the fringe to consider purchasing their first home. In addition, house price growth in Sydney seems to have moderated, properties in WA are as affordable as they have been for some time and there are generous discounts on offer from developers across the eastern seaboard that have eased barriers to the first home buyers. Of course, July's introduction of stamp duty exemptions for NSW first home buyers has helped too.

HighlightsIn the September quarter, housing affordability improved nationally with the proportion of income required to meet loan repayments decreasing by 1.2 percentage points to 30.3%. This figure marked a decrease of 0.6 percentage points when compared to the corresponding quarter of 2016.

Housing Affordability by State/Territory

The September quarter saw housing affordability improve nationally.Compared to the September quarter of 2016, housing affordability improved in all states and territories.

New South Wales recorded the largest increase in affordability from last quarter, with the proportion of family income needed to meet loan repayments falling 1.9% to 36.1%

First Homebuyer Activity

Over the quarter the number of first homebuyers increased by 22.8% to 28,919.First home buyers now make up 20.6% of the owner occupier market, and if refinancing is excluded, the figure sits at 24.5%During the September quarter, the number of first home buyers increased in all states and territories.Over the quarter the average loan size to first homebuyers decreased in all states and territories, except South Australia and Tasmania

The full report can be viewed here:

With many Australians continuing to strive towards making property ownership a reality, Leads Finance Brokers are pleased with the report findings.

ContactLeads Finance Brokers today to find out more about how we can help you start your exciting journey in to property ownership.

SOURCE: Adelaide Bank/REIA Housing Affordability Report Overview

The Reserve Bank of Australia has ended the year with good cheer and positive news - still no movement on interest rates, which remain at a record low 1.50%.

In mid-November, economics writer, Terry McCrann reported the RBA had painted a very optimistic picture of the Australia economy in its latest assessment and outlook.

He wrote, "it's one of overall growth picking up and running quite strongly, low inflation, pretty solid increases in jobs and even wages broadly beginning to pick up a bit of pace."

Therefore, many of us can feel confident about our future and will consider our options over the summer break. With no movement on interest rates, some investors will be looking as closely at the property market as their Christmas shopping lists.

Adopting a more leisurely pace over the summer break, it could be the ideal time to take stock and possibly spot some unexpected investment gems - perhaps even think seriously about that holiday property you've always dreamt of.

And, with 2018 nearly upon us, why not make a head start on your New Year's resolutions? One we'd highly recommend is a mortgage health check, which could allow you to make big savings by paying off your loan sooner. Another suggestion is to take the time to look around your home with fresh eyes and think about how you could add value.

As ever, if you have any questions, we're here to help.

Click hereto read the official RBA media release.

Has your mortgage been given a health check lately?

It’s always a good idea to get a Home Loan Health Check performed at least once a year to check that you’re getting the most out of your current loan.

Circumstances in life are forever changing and your existing loan may no longer be meeting your current needs.

We can help by performing a Home Loan Health Check and providing you with a thorough review of your existing home loan to determine whether your loan is still working for you or whether you could benefit from accessing other loan options.

Our Home Loan Health Check is free and comes without any obligation.

All we need is 30 minutes of your time and it could save you thousands!

Call us today on (08) 8362 5745 to find out more and book your free Home Loan Health Check.

If you apply for a home loan, particularly if the loan is for more than 80 per cent of a property’s value, you’ll more than likely have to prove to lenders that you have a satisfactory amount of savings. This is to demonstrate your ability to funnel a portion of your income into repayments.

Although it can differ, in most cases lenders generally look for consistent additions to savings over a period of at least three months and preferably a year or more. This means that the following are not considered genuine savings:

a cash giftan inheritancecasino/other gambling winningsproceeds of the sale of a non-investment assetgovernment grants and other finance offered as incentives

Can I still get a loan without genuine savings?

For those who don’t have any genuine savings but still want to obtain finance, there are options.

These include:

Guarantor loans - Having a guarantor on your loan may mean that no deposit is required, with the equity or asset the guarantor stakes standing in for a deposit.Other significant assets such as shares, managed funds and/or equity in residential property - Depending on your chosen lender, cash isn’t the only thing accepted as genuine savings. There are even situations where the sale of a vehicle can be considered as genuine savings if proved that it was owned for three months or more.A strong rental record may see a lender allow you to forgo the genuine savings route - Some lenders will waive the requirements if a letter can be produced from a licensed real estate agent confirming that rent has been paid on time and in full for the preceding 12 months, as it highlights your ability to make repayments on time and on an ongoing basis.

We regularly write loans for customers who do not have genuine savings using the above policy exceptions. It’s just a matter of looking at their full situation and knowing which lender is going to have the policies to suit what you’re trying to achieve. This knowledge can only be achieved through experience and keeping in constant communication with lenders to know what their policy niches are.

Chat to one of our experienced finance brokers who are trained to have knowledge of a broad spread of products from multiple lenders, so they’ll be able to match you with the right lender and loan.

If you'ld like to know more, email us at leads@leadsfinance.com.au or go to our Contactpage and get in touch with us there.

We look forwrd to hearing from you.

A decision has been made to leave the cash rate unchanged at 1.50%.

The Statement by Philip Lowe, Governor Monetary Policy Decision is available on the RBA website.

Click here to read the official statement from the RBA

The QBE Australian Housing Outlook 2017-2020 has recently been released providing an analysis of housing prices across the country along with a number of insightul forecasts.

Well worth a read for anyone from a first home buyer to the astute investor.

Click hereto access the report avaialble on the QBE website.