1 00:00:10,200 --> 00:00:13,400 Speaker 1: Hello and welcome to the Australians Money Puzzle podcast. I'm 2 00:00:13,480 --> 00:00:17,120 Speaker 1: James Kirby. Welcome aboard everybody. If you're a regular listener 3 00:00:17,239 --> 00:00:20,000 Speaker 1: to the show and you tuned in last Tuesday the 4 00:00:20,000 --> 00:00:23,080 Speaker 1: Property Show to hear Tim Lowles, the head of research 5 00:00:23,120 --> 00:00:26,319 Speaker 1: at the property research group Cautality. He really caught my 6 00:00:26,360 --> 00:00:30,240 Speaker 1: attention with something. A lot of property investors may not 7 00:00:30,360 --> 00:00:33,600 Speaker 1: have considered this just yet, or homeowners for that matter. 8 00:00:34,159 --> 00:00:36,680 Speaker 1: But Tim Lowless said, we're getting close to the bottom 9 00:00:36,720 --> 00:00:40,600 Speaker 1: of the interest rate cutting cycle and if there's another 10 00:00:40,800 --> 00:00:44,920 Speaker 1: cut on Melbourne Cup Day, which is likely ish, it 11 00:00:45,040 --> 00:00:48,320 Speaker 1: means we may not see one as expected early next year. 12 00:00:48,560 --> 00:00:51,760 Speaker 1: And then I am quoting Tim here. And remember that 13 00:00:51,880 --> 00:00:53,880 Speaker 1: this guy is now this is his whole thing, Okay, 14 00:00:53,960 --> 00:00:57,040 Speaker 1: property stats, interest rates research, where the market is moving. 15 00:00:57,320 --> 00:01:00,000 Speaker 1: And he said more people are starting to do their numbers, 16 00:01:00,200 --> 00:01:03,200 Speaker 1: aren't fixing and are weighing up the pros and cons. 17 00:01:03,280 --> 00:01:07,440 Speaker 1: Isn't that interesting? So I thought, well, let's get someone 18 00:01:07,480 --> 00:01:08,960 Speaker 1: to talk about that who would be good on that. 19 00:01:09,319 --> 00:01:13,240 Speaker 1: The ideal person, of course is Sally Tindle, a can star. 20 00:01:13,520 --> 00:01:15,119 Speaker 1: We're going to talk about that. We're going to talk 21 00:01:15,160 --> 00:01:17,520 Speaker 1: first about the whole situation with rates and where they're 22 00:01:17,520 --> 00:01:19,800 Speaker 1: going on, how much you get for your money, and 23 00:01:19,840 --> 00:01:21,759 Speaker 1: then we'll go into the idea of fixing. 24 00:01:21,920 --> 00:01:24,920 Speaker 2: Oh are you Sally, I'm great, James, how are you good? 25 00:01:25,080 --> 00:01:27,440 Speaker 1: Nice to have you on again. I really think that 26 00:01:27,720 --> 00:01:31,240 Speaker 1: investors should tune in here because there is a point 27 00:01:31,319 --> 00:01:34,520 Speaker 1: in time, but you might just give us an entrade 28 00:01:34,520 --> 00:01:38,520 Speaker 1: to this entire situation and tell us like basically where 29 00:01:38,560 --> 00:01:41,360 Speaker 1: we are right. We've had this cutting cycle. It's been 30 00:01:41,400 --> 00:01:43,720 Speaker 1: going on for some time. We think we're coming towards 31 00:01:43,760 --> 00:01:47,960 Speaker 1: the end. I go for money in the banks as 32 00:01:47,960 --> 00:01:51,520 Speaker 1: opposed to borrowing from them. What's this what sort of 33 00:01:51,560 --> 00:01:53,920 Speaker 1: guideline at the moment? What are people getting on deposit 34 00:01:54,000 --> 00:01:57,320 Speaker 1: and what would be the best rates at the stage. 35 00:01:57,400 --> 00:02:00,240 Speaker 3: It's really interesting to look at the numbers because we 36 00:02:00,280 --> 00:02:02,600 Speaker 3: saw on the way up, with all the interest rate hikes. 37 00:02:02,640 --> 00:02:05,960 Speaker 3: On the way down, banks are still picking and choosing 38 00:02:06,240 --> 00:02:10,119 Speaker 3: which savings accounts get a cut, which might miss out, 39 00:02:10,160 --> 00:02:12,480 Speaker 3: which is a good thing in a cutting cycle, or 40 00:02:12,520 --> 00:02:15,680 Speaker 3: they might they might be juggling between base rates and 41 00:02:15,760 --> 00:02:19,240 Speaker 3: bonus rates to make their profit margins still stack up. 42 00:02:19,400 --> 00:02:22,040 Speaker 2: So before the hikes, we saw. 43 00:02:21,840 --> 00:02:25,239 Speaker 3: The average ongoing savings rate at zero point three nine percent. 44 00:02:25,280 --> 00:02:27,000 Speaker 2: I mean, that's just ridiculous, isn't it. 45 00:02:27,320 --> 00:02:29,800 Speaker 3: At the peak it was three point four to three percent, 46 00:02:30,400 --> 00:02:33,240 Speaker 3: and then today is three point zero six percent. 47 00:02:33,440 --> 00:02:34,600 Speaker 2: So banks on. 48 00:02:34,600 --> 00:02:37,920 Speaker 3: The way up didn't pass on all the rate hikes 49 00:02:37,919 --> 00:02:40,640 Speaker 3: on the way down, they haven't passed through all the 50 00:02:40,720 --> 00:02:43,520 Speaker 3: rate cuts when you're looking at those average rates. But 51 00:02:43,600 --> 00:02:46,240 Speaker 3: there's a world of difference between an average rate and 52 00:02:46,280 --> 00:02:49,320 Speaker 3: a competitive one. So I just said three point zero 53 00:02:49,360 --> 00:02:52,480 Speaker 3: six that's the average ongoing savings rate on our database 54 00:02:52,520 --> 00:02:53,560 Speaker 3: at this point in time. 55 00:02:53,960 --> 00:02:55,520 Speaker 2: It's excluding kids accounts. 56 00:02:55,520 --> 00:02:59,920 Speaker 3: I believe today the highest ongoing savings rate is five percent. 57 00:03:00,360 --> 00:03:01,480 Speaker 2: It's still five percent. 58 00:03:01,520 --> 00:03:05,120 Speaker 1: That's really interesting. So a call as such, should you 59 00:03:05,160 --> 00:03:08,560 Speaker 1: should be getting three? But there are better rates than that, 60 00:03:08,639 --> 00:03:11,520 Speaker 1: and you can still get up to five. This figure five, 61 00:03:11,960 --> 00:03:13,960 Speaker 1: Can you frame it for us? Is it? Is it 62 00:03:14,120 --> 00:03:16,079 Speaker 1: a term deposit? Is it? Do you have to keep 63 00:03:16,080 --> 00:03:16,840 Speaker 1: it in for years? 64 00:03:17,040 --> 00:03:18,080 Speaker 2: No, it's at call. 65 00:03:18,480 --> 00:03:21,919 Speaker 3: There are a world of caveats around it though, because 66 00:03:21,960 --> 00:03:25,960 Speaker 3: it's only for people aged eighteen to thirty four. I 67 00:03:25,960 --> 00:03:29,480 Speaker 3: believe now it's from west packet that Westpac just increase 68 00:03:29,560 --> 00:03:30,360 Speaker 3: the age bracket. 69 00:03:30,600 --> 00:03:33,240 Speaker 2: So you have to be young. It unfortunately rules me 70 00:03:33,360 --> 00:03:36,800 Speaker 2: out in a significant way. I would say, what's that? 71 00:03:37,560 --> 00:03:39,520 Speaker 1: Yes, I get it, Yeah, okay, and. 72 00:03:39,480 --> 00:03:41,520 Speaker 3: Looking for first home buyers, right, But you also then 73 00:03:41,640 --> 00:03:44,560 Speaker 3: have to make twenty plus transactions on a linked bank 74 00:03:44,560 --> 00:03:46,520 Speaker 3: account in any given month and grow. 75 00:03:46,400 --> 00:03:47,560 Speaker 2: Your savings balance in a month. 76 00:03:47,640 --> 00:03:50,280 Speaker 3: So there's lots of terms and conditions to qualify for 77 00:03:50,320 --> 00:03:52,280 Speaker 3: that five percent rate. And let me tell you they 78 00:03:52,280 --> 00:03:55,600 Speaker 3: are by themselves at that five percent ongoing rate. A 79 00:03:55,680 --> 00:03:59,040 Speaker 3: competitive savings rate is more around the four point five mark. 80 00:03:59,360 --> 00:04:01,520 Speaker 3: A competitive and realistic savings. 81 00:04:01,280 --> 00:04:05,120 Speaker 1: Rape some well term deposits. I know that traditionally people 82 00:04:05,560 --> 00:04:08,960 Speaker 1: were using things like mcquarie. I think has always been 83 00:04:09,000 --> 00:04:11,920 Speaker 1: in the mix. Assn't I in g I'm naming these 84 00:04:11,960 --> 00:04:14,160 Speaker 1: off the top of my head. There by no means promotions. 85 00:04:14,160 --> 00:04:15,960 Speaker 1: Further one, let me tell you, do you have any 86 00:04:15,960 --> 00:04:18,960 Speaker 1: sense of what are the most popular for investors or 87 00:04:19,000 --> 00:04:21,960 Speaker 1: for people with serious levels of cash that are moving 88 00:04:22,040 --> 00:04:23,719 Speaker 1: within the banking system. They don't have to be in 89 00:04:23,720 --> 00:04:24,279 Speaker 1: the Big four. 90 00:04:25,240 --> 00:04:25,440 Speaker 2: Yeah. 91 00:04:25,520 --> 00:04:27,839 Speaker 3: So it's interesting to see because the Big four suddenly 92 00:04:27,920 --> 00:04:30,640 Speaker 3: aren't posting the highest rates, the highest term deposit rates 93 00:04:30,640 --> 00:04:33,080 Speaker 3: that I can see for any term is first option bank, 94 00:04:33,120 --> 00:04:35,120 Speaker 3: but it's only a three month term at four point 95 00:04:35,200 --> 00:04:37,800 Speaker 3: five percent, and these move around all the time. I've 96 00:04:37,839 --> 00:04:40,360 Speaker 3: done this on the balance of fifty thousand dollars as well. 97 00:04:40,440 --> 00:04:43,080 Speaker 3: Let's be clear, for a six month term deposit rate 98 00:04:43,080 --> 00:04:45,880 Speaker 3: you're looking at in one bank, there are relatively new 99 00:04:45,920 --> 00:04:49,599 Speaker 3: incomer at four point three eight percent, and then when 100 00:04:49,600 --> 00:04:52,279 Speaker 3: you want to get into the one year, two years, 101 00:04:52,279 --> 00:04:56,640 Speaker 3: three years, they're very much dominated by Judo Bank, Rabobank, 102 00:04:56,720 --> 00:04:59,760 Speaker 3: move Bank, and they're sitting around that four percent mark. 103 00:05:00,040 --> 00:05:02,960 Speaker 3: That's for the highest term deposit rates. If you're looking 104 00:05:03,000 --> 00:05:05,440 Speaker 3: at the Big four, very different story. 105 00:05:05,680 --> 00:05:07,240 Speaker 1: Just for the talk about the Big four. So you've 106 00:05:07,279 --> 00:05:10,599 Speaker 1: seen four and a half percent on a extended time 107 00:05:10,760 --> 00:05:13,280 Speaker 1: period term deposit two years or so, four and a 108 00:05:13,279 --> 00:05:15,680 Speaker 1: half percent is what you should that's the maximum, it's 109 00:05:15,720 --> 00:05:16,440 Speaker 1: what's possible. 110 00:05:17,279 --> 00:05:19,800 Speaker 2: Oh only just that was for three months. 111 00:05:19,920 --> 00:05:23,320 Speaker 3: I'm saying around the four percent mark, and you really 112 00:05:23,400 --> 00:05:26,200 Speaker 3: have to stretch yourself to go and find that competitive rate. 113 00:05:26,320 --> 00:05:26,920 Speaker 2: They're not that. 114 00:05:26,960 --> 00:05:29,680 Speaker 3: Easy to find at four percent. Whereas you balance it 115 00:05:29,760 --> 00:05:32,480 Speaker 3: up against the APT core savings accounts rates where you 116 00:05:32,520 --> 00:05:35,039 Speaker 3: should easily be able to find an ongoing savings rate 117 00:05:35,080 --> 00:05:37,880 Speaker 3: at four percent, You just in many cases have to 118 00:05:37,920 --> 00:05:40,359 Speaker 3: meet some prickly monthly terms and conditions. 119 00:05:40,360 --> 00:05:41,560 Speaker 2: And you mentioned. 120 00:05:41,240 --> 00:05:44,080 Speaker 3: Mcquarie Bank before because they're one of the ones that 121 00:05:44,240 --> 00:05:46,920 Speaker 3: have no strings attached savings account rates. 122 00:05:46,920 --> 00:05:48,160 Speaker 2: So that might suit. 123 00:05:47,920 --> 00:05:51,680 Speaker 3: People who are betting that there's not many more cash 124 00:05:51,760 --> 00:05:54,280 Speaker 3: rate cuts to come and don't want the fuss of 125 00:05:54,600 --> 00:05:58,159 Speaker 3: meeting certain terms and conditions. Mcquarie certainly is a leader 126 00:05:58,200 --> 00:06:01,279 Speaker 3: in that space, but so is Able Banking and austrayan 127 00:06:01,400 --> 00:06:06,480 Speaker 3: Unity Heartland Bank AMP. They're all offering no strings attached 128 00:06:06,600 --> 00:06:10,040 Speaker 3: savings accounts that are at core with decent balance caps. 129 00:06:10,160 --> 00:06:11,240 Speaker 2: Might I add. 130 00:06:11,080 --> 00:06:14,039 Speaker 3: Anywhere between four point twenty five percent and four point 131 00:06:14,080 --> 00:06:15,000 Speaker 3: five five percent? 132 00:06:15,240 --> 00:06:18,799 Speaker 1: Okay? Then do they have these these are our called okay, 133 00:06:18,800 --> 00:06:21,400 Speaker 1: and they have no strings attached. We take that as 134 00:06:21,480 --> 00:06:24,280 Speaker 1: red hard to believe, but I'll take your word for it. 135 00:06:25,720 --> 00:06:28,200 Speaker 2: Ah. The only string that I are the only obvious strings. 136 00:06:28,240 --> 00:06:31,640 Speaker 3: So there's no age caps, there's no monthly terms in conditions. 137 00:06:31,960 --> 00:06:33,720 Speaker 2: Some of them have welcome rates. 138 00:06:33,480 --> 00:06:36,080 Speaker 3: But we're ignoring them completely because they only last for 139 00:06:36,080 --> 00:06:38,760 Speaker 3: what four or five months maximum. The only cap I'm 140 00:06:38,760 --> 00:06:41,800 Speaker 3: including is a balance cap. And so for example, I 141 00:06:41,839 --> 00:06:44,599 Speaker 3: mentioned Astray and Unity. It has a balance cap of 142 00:06:44,640 --> 00:06:47,279 Speaker 3: fifty thousand dollars, so as soon as you get just 143 00:06:47,360 --> 00:06:49,680 Speaker 3: over fifty thousand dollars in that account, you won't get 144 00:06:49,680 --> 00:06:53,400 Speaker 3: that high rate. But others like mcquarie offering four point 145 00:06:53,480 --> 00:06:56,680 Speaker 3: two five percent, they've got a balance cap of two million. 146 00:06:57,040 --> 00:07:00,320 Speaker 1: Right, so ironically if you put in more or your 147 00:07:00,360 --> 00:07:03,200 Speaker 1: read actually might reduce on the amount over their cap time. 148 00:07:03,960 --> 00:07:04,640 Speaker 2: Absolutely. 149 00:07:05,240 --> 00:07:10,120 Speaker 3: Oh look, these accounts lit it with you know, age caps, 150 00:07:10,160 --> 00:07:14,440 Speaker 3: balance cats, monthly caps, withdrawal caps, you name it. Same 151 00:07:14,440 --> 00:07:18,120 Speaker 3: as accounts are absolutely littered with terms and conditions where 152 00:07:18,160 --> 00:07:20,360 Speaker 3: if you put one foot wrong in any given month, 153 00:07:20,440 --> 00:07:22,600 Speaker 3: you could see your interest rate go from like four 154 00:07:22,640 --> 00:07:25,360 Speaker 3: and a half down to in some cases zero point 155 00:07:25,520 --> 00:07:26,640 Speaker 3: zero zero percent. 156 00:07:26,840 --> 00:07:28,920 Speaker 1: Yeah, that's a crucial point. That's a really good point. 157 00:07:29,200 --> 00:07:32,480 Speaker 1: Keep that in mind, folks. This is literally it's become 158 00:07:32,480 --> 00:07:36,960 Speaker 1: a game. And I think it would be innocent of 159 00:07:37,000 --> 00:07:38,800 Speaker 1: you to go into a bank and think that you 160 00:07:38,800 --> 00:07:40,760 Speaker 1: can put your money in and get a certain rate 161 00:07:40,840 --> 00:07:43,920 Speaker 1: without some conditions. Some of them are more subtle than others, 162 00:07:44,040 --> 00:07:46,440 Speaker 1: like the ones that at least just talking about caps, 163 00:07:46,440 --> 00:07:49,200 Speaker 1: for instance, but they want to know how much you 164 00:07:49,280 --> 00:07:50,840 Speaker 1: might wonder why they want to do that, But I 165 00:07:50,880 --> 00:07:53,960 Speaker 1: suppose they just want more customers on these rates, So 166 00:07:54,640 --> 00:08:00,680 Speaker 1: sally do the deposit rates then reflect it's starting to 167 00:08:00,800 --> 00:08:04,920 Speaker 1: drop basically in anticipation of where we might be going 168 00:08:04,960 --> 00:08:07,120 Speaker 1: on the cycle, because if Tim is right, and many 169 00:08:07,120 --> 00:08:08,960 Speaker 1: economists are right, we are coming to the end of 170 00:08:08,960 --> 00:08:09,960 Speaker 1: the cutting cycle. 171 00:08:11,240 --> 00:08:13,480 Speaker 3: Yeah, it's interesting. I do think we're also coming to 172 00:08:13,520 --> 00:08:15,400 Speaker 3: the end of the cutting cycle. Look, I'm going to 173 00:08:15,440 --> 00:08:17,679 Speaker 3: throw it out there. We could be at the end already. 174 00:08:17,840 --> 00:08:21,200 Speaker 3: We don't know certainly. You know, there's a meeting coming up, 175 00:08:21,280 --> 00:08:23,840 Speaker 3: there's a lot of speculation about what might happen. But 176 00:08:24,000 --> 00:08:27,640 Speaker 3: with inflation really still struggling to get back to that 177 00:08:27,800 --> 00:08:31,920 Speaker 3: target band in a consistent manner, I do wonder whether 178 00:08:31,960 --> 00:08:34,800 Speaker 3: we are already at the end. Certainly, if you've got 179 00:08:34,840 --> 00:08:36,640 Speaker 3: money in the bank, if you've got a mortgage, you 180 00:08:36,640 --> 00:08:40,360 Speaker 3: should not be banking or counting on something happening for. 181 00:08:40,600 --> 00:08:42,559 Speaker 2: Certain because we just don't know. 182 00:08:43,040 --> 00:08:45,760 Speaker 3: Looking at the Big four bank forecasts, and these could 183 00:08:45,840 --> 00:08:48,760 Speaker 3: change in coming days when we get that inflation data. 184 00:08:48,800 --> 00:08:51,839 Speaker 3: But looking at the big four banks, we've got A 185 00:08:52,000 --> 00:08:55,199 Speaker 3: and Z, CBA and NAB all saying one more cut 186 00:08:56,080 --> 00:08:58,640 Speaker 3: and West Facts still saying three, although I do feel 187 00:08:58,640 --> 00:08:58,920 Speaker 3: like that. 188 00:08:58,960 --> 00:08:59,960 Speaker 2: Forecast might change. 189 00:09:00,000 --> 00:09:01,839 Speaker 1: That's change, that's yeah. 190 00:09:01,880 --> 00:09:04,479 Speaker 3: That can give you a good idea of the spectrum. 191 00:09:04,720 --> 00:09:06,600 Speaker 3: Three of the big four banks are saying no more 192 00:09:06,640 --> 00:09:09,480 Speaker 3: cuts this year. West Pak is the only one saying 193 00:09:09,600 --> 00:09:11,640 Speaker 3: one could come at the next meeting. 194 00:09:11,679 --> 00:09:14,480 Speaker 2: But again time will tell when we get a better. 195 00:09:14,280 --> 00:09:16,440 Speaker 3: Read on the inflation data and marry it up with 196 00:09:16,480 --> 00:09:19,240 Speaker 3: the unemployment data. What's really interesting for the RBA at 197 00:09:19,240 --> 00:09:22,360 Speaker 3: this point in time is that previously, when inflation was 198 00:09:22,480 --> 00:09:25,679 Speaker 3: really running out of hand, it was really easy decisions 199 00:09:25,679 --> 00:09:29,480 Speaker 3: for them to just know, hike and get inflation under control. 200 00:09:29,720 --> 00:09:33,320 Speaker 3: Now that they've got inflation under control, the balancing act 201 00:09:33,400 --> 00:09:36,400 Speaker 3: between their two key priorities keeping his strands in jobs 202 00:09:36,480 --> 00:09:40,200 Speaker 3: and keeping inflation in check is becoming a lot harder. 203 00:09:40,440 --> 00:09:42,600 Speaker 3: So I think that the decision making for the RBA 204 00:09:42,880 --> 00:09:44,839 Speaker 3: is quite fought at this point in time. 205 00:09:45,120 --> 00:09:47,280 Speaker 2: Now we're getting to the bottom of the cycle. 206 00:09:48,040 --> 00:09:50,719 Speaker 1: And I suppose what's really important for our listeners I'm 207 00:09:50,720 --> 00:09:53,240 Speaker 1: going to deal with this and in Moorman, folks, is that 208 00:09:53,280 --> 00:09:57,920 Speaker 1: the banks don't hang around for the official rates to 209 00:09:58,000 --> 00:10:00,920 Speaker 1: take their turn. They move off and the head of 210 00:10:01,000 --> 00:10:04,480 Speaker 1: the future direction, so you might be thinking of fixing 211 00:10:04,520 --> 00:10:07,080 Speaker 1: for the first time. They've been thinking about it for 212 00:10:07,120 --> 00:10:18,520 Speaker 1: some time. Back in a moment, Hello and welcome back 213 00:10:18,520 --> 00:10:21,319 Speaker 1: to The Australian's Money Puzzle podcast. I'm James Kirby and 214 00:10:21,360 --> 00:10:24,679 Speaker 1: I'm talking to Sally Tindall, who is the data insights 215 00:10:24,720 --> 00:10:28,840 Speaker 1: director at Canstar, the Comparison rate comparison service. You said 216 00:10:28,880 --> 00:10:32,040 Speaker 1: something very interesting in the first segment which dovetails very 217 00:10:32,080 --> 00:10:34,280 Speaker 1: much with what Tim Lowless is saying. And I've got 218 00:10:34,280 --> 00:10:36,200 Speaker 1: two of you now. I've got someone who's in a 219 00:10:36,200 --> 00:10:39,719 Speaker 1: cross rates and someone who's across property and they are 220 00:10:39,760 --> 00:10:42,360 Speaker 1: both saying that we're coming to the end of the 221 00:10:42,400 --> 00:10:47,080 Speaker 1: cycle and people are starting to think about fixing. I 222 00:10:47,080 --> 00:10:49,160 Speaker 1: don't know if you're saying that, but tell us first 223 00:10:49,160 --> 00:10:51,240 Speaker 1: of all, tell us the picture. I imagine no one's 224 00:10:51,240 --> 00:10:55,800 Speaker 1: fixing right now and that activity has shrunk enormously because 225 00:10:55,800 --> 00:10:58,280 Speaker 1: we've had a cutting cycle. I don't know is that 226 00:10:58,320 --> 00:10:59,000 Speaker 1: the case. 227 00:11:00,280 --> 00:11:01,480 Speaker 3: Ly, and I think I might need to take you 228 00:11:01,520 --> 00:11:03,600 Speaker 3: on a little bit of a journey just to remind 229 00:11:03,600 --> 00:11:07,600 Speaker 3: ourselves about Australians and our attitude towards fixing. So you know, 230 00:11:07,720 --> 00:11:11,800 Speaker 3: often it's based on you know, an increasing fixing is 231 00:11:12,120 --> 00:11:15,640 Speaker 3: often based on you know, strategic priorities for the banks, 232 00:11:16,080 --> 00:11:19,360 Speaker 3: what the neighbor's doing, things like that, rather than whether 233 00:11:19,360 --> 00:11:21,280 Speaker 3: we're at the top or the bottom of the cycle. 234 00:11:21,559 --> 00:11:23,840 Speaker 3: But if you think about it strands, we might like 235 00:11:23,880 --> 00:11:26,040 Speaker 3: to gamble on what two up or something, but we 236 00:11:26,160 --> 00:11:28,920 Speaker 3: don't like to gamble on our mortgage when just not 237 00:11:29,040 --> 00:11:32,360 Speaker 3: big fixes, I think because we're petrified of the break 238 00:11:32,400 --> 00:11:35,679 Speaker 3: fees that still potentially come with fixed rates and if 239 00:11:35,720 --> 00:11:36,080 Speaker 3: you want to. 240 00:11:36,080 --> 00:11:36,800 Speaker 2: Get out early. 241 00:11:36,920 --> 00:11:41,040 Speaker 3: So the peak of fixing was in July twenty twenty one, 242 00:11:41,080 --> 00:11:44,520 Speaker 3: when forty six percent of new and refinance loans opted 243 00:11:44,600 --> 00:11:48,120 Speaker 3: for a fix rate that wasn't even half And this 244 00:11:48,280 --> 00:11:51,720 Speaker 3: was when the banks were offering in some cases four 245 00:11:51,800 --> 00:11:54,880 Speaker 3: year fix rates that started with the one and only 246 00:11:54,960 --> 00:11:57,200 Speaker 3: half of us opted to fix. 247 00:11:57,400 --> 00:11:58,880 Speaker 2: Isn't that incredible? It is? 248 00:11:59,120 --> 00:12:01,360 Speaker 1: It is really look back. I mean, what were people 249 00:12:01,400 --> 00:12:03,880 Speaker 1: thinking it was going to go lower? It was still 250 00:12:03,920 --> 00:12:05,920 Speaker 1: all forever, I wonder. 251 00:12:05,520 --> 00:12:09,400 Speaker 2: But really I fixed for two years. I'm kicking myself. 252 00:12:09,400 --> 00:12:11,600 Speaker 2: I didn't fix before. I was just so silly. 253 00:12:11,640 --> 00:12:14,640 Speaker 3: But the second biggest peak in fixing in recent data 254 00:12:15,000 --> 00:12:17,600 Speaker 3: was right before the GFC and that's when you know, 255 00:12:17,720 --> 00:12:20,160 Speaker 3: interest rates are like a discount. A variable rate was 256 00:12:20,160 --> 00:12:22,800 Speaker 3: sitting at I've looked it up eight point ninety six 257 00:12:22,840 --> 00:12:26,080 Speaker 3: percent according to the RBA standard variable rates were over 258 00:12:26,160 --> 00:12:29,640 Speaker 3: nine percent. People thought that rates would be getting over 259 00:12:29,679 --> 00:12:32,400 Speaker 3: ten percent at one point and not everyone, but a 260 00:12:32,400 --> 00:12:36,040 Speaker 3: lot of people about a quarter panic fixed at that point. 261 00:12:36,200 --> 00:12:37,160 Speaker 2: And then what happened. 262 00:12:37,280 --> 00:12:40,280 Speaker 1: Are people more likely to fix in our market out 263 00:12:40,280 --> 00:12:42,400 Speaker 1: of fear that the rates are going too high than 264 00:12:42,440 --> 00:12:44,480 Speaker 1: they are to take opportunity of the fact that they're 265 00:12:44,520 --> 00:12:45,000 Speaker 1: super low. 266 00:12:45,760 --> 00:12:47,079 Speaker 2: Well, I think it was a bit of both. 267 00:12:47,160 --> 00:12:50,760 Speaker 3: So absolutely, back in just before the GFC, just before 268 00:12:50,800 --> 00:12:53,480 Speaker 3: rates fell off a cliff yep, that was panic fixing, 269 00:12:53,640 --> 00:12:56,360 Speaker 3: Absolutely because rates were sitting at the nine percent mark, right, 270 00:12:56,760 --> 00:13:00,079 Speaker 3: But back you know, then fast forward to you know, COVID. 271 00:13:00,400 --> 00:13:02,160 Speaker 3: Maybe there was a little bit of fear in there 272 00:13:02,200 --> 00:13:05,199 Speaker 3: because it was the fear of unknown. Absolutely, but that 273 00:13:05,320 --> 00:13:10,840 Speaker 3: was really driven by the banks offering incredibly sharp rates. 274 00:13:11,120 --> 00:13:13,760 Speaker 3: And why were the banks offering incredibly sharp rates because 275 00:13:13,760 --> 00:13:15,640 Speaker 3: they were working with the government, They were working with 276 00:13:15,679 --> 00:13:18,200 Speaker 3: the RBA, and the RBA was handing them out cheap 277 00:13:18,280 --> 00:13:21,439 Speaker 3: six rate funding. So again, it wasn't that we were 278 00:13:21,480 --> 00:13:22,960 Speaker 3: at the bottom of the top of the cycle. 279 00:13:23,200 --> 00:13:25,959 Speaker 2: So much as there was this other factor at play 280 00:13:26,000 --> 00:13:26,440 Speaker 2: that we're. 281 00:13:26,520 --> 00:13:29,640 Speaker 3: Driving people to actually lock in their rates, then the 282 00:13:29,720 --> 00:13:30,800 Speaker 3: rate hikes happened. 283 00:13:31,240 --> 00:13:32,920 Speaker 2: Everyone fled from fixing. 284 00:13:33,160 --> 00:13:37,320 Speaker 3: The lowest rate of fixing was April twenty twenty four, 285 00:13:38,120 --> 00:13:40,880 Speaker 3: so we were almost done with the cash rate hikes, 286 00:13:41,120 --> 00:13:43,280 Speaker 3: and it was one point two percent of new and 287 00:13:43,320 --> 00:13:44,400 Speaker 3: refinance loans. 288 00:13:44,640 --> 00:13:48,120 Speaker 1: It fell from forty six to one one point two. 289 00:13:49,440 --> 00:13:50,679 Speaker 1: What do you think it is right now? 290 00:13:52,080 --> 00:13:52,880 Speaker 2: So we don't know. 291 00:13:53,080 --> 00:13:56,319 Speaker 3: So the ABS unfortunately has stopped publishing this data, so 292 00:13:56,360 --> 00:13:59,679 Speaker 3: we now crawl through the weeds of the big banks 293 00:14:00,360 --> 00:14:03,199 Speaker 3: books so whenever they do half year or full year results. 294 00:14:03,480 --> 00:14:04,839 Speaker 2: But it's still incredibly low. 295 00:14:04,920 --> 00:14:07,199 Speaker 3: I do know that much because I'm looking at CBA's 296 00:14:07,240 --> 00:14:10,839 Speaker 3: most recent results. They're full year results, and fixing is 297 00:14:10,880 --> 00:14:14,080 Speaker 3: about one percent of new mortgages coming through and five 298 00:14:14,120 --> 00:14:16,199 Speaker 3: percent of the whole loan book, and some of them 299 00:14:16,240 --> 00:14:19,480 Speaker 3: will still have been you know, legacy fixes from back 300 00:14:19,560 --> 00:14:23,040 Speaker 3: in twenty twenty one, twenty twenty two periods, So really 301 00:14:23,080 --> 00:14:23,840 Speaker 3: incredibly low. 302 00:14:24,320 --> 00:14:25,320 Speaker 2: Do you know why? 303 00:14:25,480 --> 00:14:27,560 Speaker 3: Okay, so the big question is why, and you're about 304 00:14:27,600 --> 00:14:29,880 Speaker 3: to ask me this, I know, but the lowest fix 305 00:14:30,000 --> 00:14:33,360 Speaker 3: rate on our database is significantly lower than the lowest variable, 306 00:14:33,440 --> 00:14:34,520 Speaker 3: even though there's. 307 00:14:34,360 --> 00:14:36,640 Speaker 2: More one more cash rate cut to come. 308 00:14:36,760 --> 00:14:39,240 Speaker 3: We don't know, but you know, I think that's because 309 00:14:39,320 --> 00:14:42,520 Speaker 3: borrows aren't really sure how many cash rate cuts are 310 00:14:42,520 --> 00:14:44,560 Speaker 3: still to come, and they really want to believe there's 311 00:14:44,560 --> 00:14:45,720 Speaker 3: more than just one coming. 312 00:14:46,080 --> 00:14:48,800 Speaker 1: Right, Yes, but no one rings a bell, of course, 313 00:14:48,840 --> 00:14:50,280 Speaker 1: this is the thing, right, No one rings a bell 314 00:14:50,320 --> 00:14:51,640 Speaker 1: at the bottom, and no one rings a bell at 315 00:14:51,680 --> 00:14:52,000 Speaker 1: the top. 316 00:14:52,760 --> 00:14:55,800 Speaker 3: And you can never be certain except with the you know, 317 00:14:55,840 --> 00:15:00,600 Speaker 3: clarity of hindsight. And the penalties for fixing and often 318 00:15:00,720 --> 00:15:04,280 Speaker 3: be far more significant than the penalties for getting it 319 00:15:04,360 --> 00:15:05,160 Speaker 3: wrong un variable. 320 00:15:05,360 --> 00:15:07,240 Speaker 1: I have two things here. The first thing I want 321 00:15:07,280 --> 00:15:10,920 Speaker 1: to just before we talk about the penalties, is there 322 00:15:10,920 --> 00:15:13,360 Speaker 1: anything like an average long term average of fixing. 323 00:15:15,360 --> 00:15:16,280 Speaker 2: I don't have it, Handy. 324 00:15:16,280 --> 00:15:17,680 Speaker 1: It sounds like if it was one, it was, it 325 00:15:17,680 --> 00:15:19,960 Speaker 1: would tell us very little anyway, because if it ranges 326 00:15:20,000 --> 00:15:23,240 Speaker 1: from forty six to one. Yeah, So like the average 327 00:15:23,240 --> 00:15:25,880 Speaker 1: Meltbourne temperature in January, you know, twenty eight degrees doesn't 328 00:15:25,880 --> 00:15:26,520 Speaker 1: tell you anything. 329 00:15:26,600 --> 00:15:28,200 Speaker 3: I'm going to take a punch and I'm going to 330 00:15:28,240 --> 00:15:31,800 Speaker 3: say somewhere between five and ten percent, I'd say it's 331 00:15:31,840 --> 00:15:32,680 Speaker 3: always been low. 332 00:15:33,000 --> 00:15:36,360 Speaker 1: Okay, all right, Now about the penalties, I thought in 333 00:15:36,400 --> 00:15:39,840 Speaker 1: my naivity that the penalties were more or less gone. 334 00:15:40,960 --> 00:15:43,080 Speaker 2: So exit fees on mortgages are gone. 335 00:15:43,120 --> 00:15:46,280 Speaker 3: They hit the curb twenty ten or twenty twelve, one 336 00:15:46,280 --> 00:15:49,280 Speaker 3: of those two years, but a long time ago. Previously 337 00:15:49,400 --> 00:15:51,560 Speaker 3: banks could sting you, whether you were on a fixed 338 00:15:51,600 --> 00:15:55,320 Speaker 3: or weariable rate, for exiting your mortgage before your thirty 339 00:15:55,400 --> 00:15:58,840 Speaker 3: years are up, and they were astronomical fees, and so 340 00:15:59,080 --> 00:16:02,760 Speaker 3: they've gone. Now there are fees for applying for a 341 00:16:02,800 --> 00:16:05,760 Speaker 3: home loan. There are fees for discharging a home loan, 342 00:16:05,800 --> 00:16:08,560 Speaker 3: but they're relatively small at about three hundred and fifty 343 00:16:08,560 --> 00:16:12,280 Speaker 3: dollars for those discharge fees, different to exit fees. There's 344 00:16:12,280 --> 00:16:15,640 Speaker 3: some state government fees for you know, switching. 345 00:16:15,320 --> 00:16:17,320 Speaker 2: Lenders as well and things like that. 346 00:16:17,440 --> 00:16:20,400 Speaker 3: But you know, all in all, we estimate that someone 347 00:16:20,440 --> 00:16:24,760 Speaker 3: that's switching their mortgage is paying what about one to 348 00:16:24,840 --> 00:16:27,600 Speaker 3: one and a half thousand dollars in fees, some of 349 00:16:27,600 --> 00:16:31,160 Speaker 3: which are negotiable. So there's not those big exit fee 350 00:16:31,600 --> 00:16:35,520 Speaker 3: penalties on variable rates. But if you sign up to 351 00:16:35,560 --> 00:16:37,760 Speaker 3: a fixed rate and you said to the bank, yes, 352 00:16:37,920 --> 00:16:40,000 Speaker 3: I'm going to pay a fixed rate of five percent 353 00:16:40,040 --> 00:16:43,000 Speaker 3: for the next two years, and you break that contract 354 00:16:43,280 --> 00:16:45,960 Speaker 3: early and the bank is out of pocket because you 355 00:16:46,080 --> 00:16:50,240 Speaker 3: broke that contract, they are entitled to charge you what 356 00:16:50,560 --> 00:16:52,000 Speaker 3: they're out of pocket costs. 357 00:16:52,240 --> 00:16:55,640 Speaker 1: Okay, and they can I see. 358 00:16:54,520 --> 00:16:59,840 Speaker 3: And sometimes yeah, sometimes these are negotiable and sometimes I've 359 00:17:00,400 --> 00:17:03,280 Speaker 3: can depend on where your next step is. So if 360 00:17:03,280 --> 00:17:04,919 Speaker 3: you say to your bank, I really just want to 361 00:17:04,960 --> 00:17:07,520 Speaker 3: move to a more competitive fixed rate, they might wait 362 00:17:07,560 --> 00:17:09,639 Speaker 3: the feats. If you say, I want to stick with you, 363 00:17:09,680 --> 00:17:11,959 Speaker 3: but I want to go to variable, but I'm going 364 00:17:12,000 --> 00:17:15,600 Speaker 3: to stay with you, guys, maybe they'll negotiate those fees. 365 00:17:15,640 --> 00:17:17,280 Speaker 2: It's always worth having that conversation. 366 00:17:17,600 --> 00:17:19,679 Speaker 1: And obviously the worst one is if you see I 367 00:17:19,680 --> 00:17:22,160 Speaker 1: can't do it anymore and I'm leaving you entirely, then 368 00:17:22,359 --> 00:17:27,120 Speaker 1: obviously why wouldn't they impose their charges that they can legally? Okay, 369 00:17:27,840 --> 00:17:31,399 Speaker 1: So million dollar question, if I talked to you this 370 00:17:31,440 --> 00:17:34,520 Speaker 1: time next year, what do you think the fixed ratio 371 00:17:34,640 --> 00:17:37,560 Speaker 1: will be. Do you think if we have no more cuts, 372 00:17:37,800 --> 00:17:40,480 Speaker 1: and if we find clear stabilization and if the cycle 373 00:17:40,560 --> 00:17:43,120 Speaker 1: is clearly over, do you think we'll see a lift 374 00:17:43,119 --> 00:17:45,920 Speaker 1: in the number of people fixing or at least considering it. 375 00:17:46,960 --> 00:17:48,840 Speaker 3: I do think we'll see a lift in the number 376 00:17:48,880 --> 00:17:51,119 Speaker 3: of people fixing, but I don't think it'll be a 377 00:17:51,160 --> 00:17:53,359 Speaker 3: significant one. I'm not going back to the days of 378 00:17:53,400 --> 00:17:55,280 Speaker 3: where we were close to half of the people. 379 00:17:55,080 --> 00:17:56,480 Speaker 2: Opting for a fixed rate. 380 00:17:56,880 --> 00:17:59,240 Speaker 3: I think some of those people that tried out fixing, 381 00:17:59,320 --> 00:18:01,960 Speaker 3: perhaps for the firs time, in that period of record 382 00:18:02,000 --> 00:18:05,479 Speaker 3: low rates, really liked the certainty that it brought. I 383 00:18:05,520 --> 00:18:08,520 Speaker 3: certainly know that from talking to you know, friends who've 384 00:18:09,040 --> 00:18:12,560 Speaker 3: you know, always interested in working out you know, what's 385 00:18:12,600 --> 00:18:14,760 Speaker 3: happening with fixed rates because they want to fix again 386 00:18:14,800 --> 00:18:18,000 Speaker 3: because they liked that certainty. So I do think that 387 00:18:18,160 --> 00:18:21,679 Speaker 3: perhaps that period of low rates has encouraged people and 388 00:18:21,760 --> 00:18:25,520 Speaker 3: opens people's minds to that certainty where I think fixing 389 00:18:25,600 --> 00:18:29,280 Speaker 3: gets problematic and where you know, we won't see these shots. 390 00:18:29,480 --> 00:18:32,439 Speaker 3: Why we won't see this sharp space spike, brother is 391 00:18:32,480 --> 00:18:34,359 Speaker 3: because the break fees problematic. 392 00:18:34,600 --> 00:18:37,480 Speaker 2: But also fixed rates tend to be a lot. 393 00:18:37,359 --> 00:18:41,080 Speaker 3: Less flexible, so you typically can't get an offset account 394 00:18:41,119 --> 00:18:44,320 Speaker 3: with them. You typically have caps on how much extra 395 00:18:44,400 --> 00:18:46,560 Speaker 3: you can pay in that fixed rate term, and again 396 00:18:46,640 --> 00:18:50,440 Speaker 3: that turns some people off. Although you know, some people 397 00:18:50,520 --> 00:18:53,000 Speaker 3: do then have a foot in both camps, opt for 398 00:18:53,080 --> 00:18:56,000 Speaker 3: a split loan, you know, take a gamble each way, 399 00:18:56,080 --> 00:18:58,840 Speaker 3: but also get the flexibility that a variable rate can 400 00:18:58,880 --> 00:19:02,359 Speaker 3: bring on that portion of their homeland, take advantage of 401 00:19:02,359 --> 00:19:04,639 Speaker 3: an offset account whatever they want, and then have that 402 00:19:04,760 --> 00:19:06,320 Speaker 3: security from the fixed rates. 403 00:19:06,320 --> 00:19:07,400 Speaker 2: So it's about. 404 00:19:07,160 --> 00:19:11,640 Speaker 3: Working out what suits your finances but also your personality, 405 00:19:11,720 --> 00:19:15,800 Speaker 3: because there's some people that hate, absolutely hate the idea 406 00:19:15,920 --> 00:19:18,840 Speaker 3: of locking in a rate and then seeing variable rates 407 00:19:18,840 --> 00:19:23,520 Speaker 3: fullfill further that's just yes, horrifying to them, whereas other 408 00:19:23,560 --> 00:19:27,639 Speaker 3: people absolutely hate worrying about THERBA like day in and 409 00:19:27,720 --> 00:19:29,879 Speaker 3: day out, although it's only eight meetings a year now, 410 00:19:29,920 --> 00:19:30,480 Speaker 3: so it's helpful. 411 00:19:30,520 --> 00:19:33,560 Speaker 1: And those people who will be horrified to have not 412 00:19:33,680 --> 00:19:38,239 Speaker 1: taken a fixed rate and watched the variables climb. And 413 00:19:38,320 --> 00:19:40,479 Speaker 1: the thing about the split chorus, folks, is that you've 414 00:19:40,520 --> 00:19:42,880 Speaker 1: got two sets of numbers, you've got two sets of fees. 415 00:19:43,520 --> 00:19:45,800 Speaker 1: I've done it, I've done all the variations. Actually, what 416 00:19:45,920 --> 00:19:48,760 Speaker 1: advisors say for what it's worth, and I'm always talking 417 00:19:48,800 --> 00:19:50,800 Speaker 1: to advisers and talk to some of the best advisors 418 00:19:50,800 --> 00:19:52,879 Speaker 1: in the country. What they do tend to see is 419 00:19:53,560 --> 00:19:57,119 Speaker 1: don't gamble, don't fix to best against the bank, because 420 00:19:57,160 --> 00:20:01,280 Speaker 1: you probably never win. But if you're a fixer, fix consistently, 421 00:20:01,920 --> 00:20:04,199 Speaker 1: so for instance, you have a home mortgage and you 422 00:20:04,200 --> 00:20:06,000 Speaker 1: had it for twenty years and you had four sets 423 00:20:06,040 --> 00:20:08,480 Speaker 1: of five year fixes, you'll find that it smooths out 424 00:20:08,520 --> 00:20:12,000 Speaker 1: really nicely over that period of time. And what your 425 00:20:12,040 --> 00:20:15,040 Speaker 1: advantage falls back largely to what Sally is saying, which 426 00:20:15,080 --> 00:20:16,840 Speaker 1: is you actually can do your numbers and you can 427 00:20:17,560 --> 00:20:19,639 Speaker 1: be sure of what your numbers are. I think that 428 00:20:19,720 --> 00:20:22,040 Speaker 1: is actually the ultimate comfort. Whether you win or lose 429 00:20:22,080 --> 00:20:24,439 Speaker 1: against the bank. You know, you may win for a 430 00:20:24,480 --> 00:20:26,720 Speaker 1: passage of play, a passage of time, and you might 431 00:20:26,760 --> 00:20:29,760 Speaker 1: lose for another part. But really it's about the security 432 00:20:29,760 --> 00:20:32,840 Speaker 1: of it. That's really good Sally, and very interesting terrific 433 00:20:32,920 --> 00:20:35,280 Speaker 1: I think for us, I haven't seen many people talk 434 00:20:35,280 --> 00:20:37,560 Speaker 1: about this. It's about time we did. All right, we'll 435 00:20:37,560 --> 00:20:47,879 Speaker 1: be back in a moment. Hello, Welcome back to The 436 00:20:47,920 --> 00:20:51,719 Speaker 1: Australian's Money Puzzle podcast. James Kirby here with Sally Tindle 437 00:20:51,800 --> 00:20:54,840 Speaker 1: of Canstar, regular guests on the show. Terrific guest to 438 00:20:54,920 --> 00:20:57,280 Speaker 1: give us a picture of where it's all going in 439 00:20:57,400 --> 00:21:01,240 Speaker 1: terms of the market. Both your money in the bank, 440 00:21:01,359 --> 00:21:03,480 Speaker 1: which is just to recap if I get any of 441 00:21:03,480 --> 00:21:07,720 Speaker 1: this wrong, Tanby Sally, you're talking fours is a good 442 00:21:07,720 --> 00:21:11,120 Speaker 1: way to get now with with deposits and term deposits, 443 00:21:11,160 --> 00:21:14,359 Speaker 1: et cetera, and three is sort of working average across 444 00:21:14,400 --> 00:21:16,800 Speaker 1: the banks. And we'll put all that, We'll put all 445 00:21:16,800 --> 00:21:19,200 Speaker 1: the tricks and caps and everything else to one side 446 00:21:19,240 --> 00:21:19,800 Speaker 1: for the moment. 447 00:21:20,200 --> 00:21:25,160 Speaker 2: That's really interesting in clearly lovely yes. 448 00:21:25,720 --> 00:21:30,720 Speaker 1: And on the borrowing side, no one is fixing. No 449 00:21:30,760 --> 00:21:32,720 Speaker 1: one is fixing all right. Of course it's not fixing 450 00:21:32,720 --> 00:21:35,720 Speaker 1: because the rates have been dropping. But if you fix, 451 00:21:35,800 --> 00:21:39,080 Speaker 1: what if you fix now? What if you fixed at 452 00:21:39,119 --> 00:21:43,919 Speaker 1: these levels at four percent, say, and then it floated 453 00:21:43,960 --> 00:21:45,760 Speaker 1: back up to eight or nine. Well, I've seen it 454 00:21:45,800 --> 00:21:47,640 Speaker 1: all happen. Let me tell you. I've seen it all happen. 455 00:21:47,720 --> 00:21:50,280 Speaker 1: I've seen people fixing the I remember people fixing at 456 00:21:50,280 --> 00:21:53,240 Speaker 1: thirteen percent, Sally because they were worried it was going 457 00:21:53,240 --> 00:21:53,879 Speaker 1: to go higher. 458 00:21:54,480 --> 00:21:56,760 Speaker 2: So you see to that panic fixing. 459 00:21:56,880 --> 00:21:58,600 Speaker 1: Panic fixing, Yeah, that's right. 460 00:21:58,920 --> 00:22:02,040 Speaker 3: The driver is you know what your neighbor's doing, and 461 00:22:02,080 --> 00:22:04,840 Speaker 3: sometimes it's because your neighbor's panicking and you feel like 462 00:22:04,880 --> 00:22:07,120 Speaker 3: you should panic too. And I think that's the key 463 00:22:07,200 --> 00:22:10,560 Speaker 3: with so many things relating to finance is just because 464 00:22:10,560 --> 00:22:13,159 Speaker 3: what your neighbor do doesn't automatically make it a perfect 465 00:22:13,200 --> 00:22:17,000 Speaker 3: idea for you. You've got to understand what suits your finances. 466 00:22:17,080 --> 00:22:19,560 Speaker 3: It's so important. But also don't make any decision in 467 00:22:19,560 --> 00:22:22,879 Speaker 3: a rush. Sometimes these things come with limited time specials 468 00:22:22,920 --> 00:22:25,640 Speaker 3: things like that nothing should be rushed if you need 469 00:22:25,680 --> 00:22:27,439 Speaker 3: to talk through it with a mortgage broker or a 470 00:22:27,480 --> 00:22:32,600 Speaker 3: financial advisor, your accountant, your neighbor, your family friend, take 471 00:22:32,680 --> 00:22:34,880 Speaker 3: that time to work it out and work out what 472 00:22:34,920 --> 00:22:37,080 Speaker 3: suits your finances. And what I did want to say 473 00:22:37,080 --> 00:22:39,360 Speaker 3: before is you know, if you are thinking about fixing, 474 00:22:39,560 --> 00:22:42,960 Speaker 3: there is a world of difference between say the Big 475 00:22:43,000 --> 00:22:46,000 Speaker 3: four bank fix rates lowest fix rates and then the 476 00:22:46,040 --> 00:22:48,159 Speaker 3: lowest on the market. We've got the lowest on the 477 00:22:48,160 --> 00:22:51,000 Speaker 3: market on our database at the moment at four point 478 00:22:51,200 --> 00:22:56,199 Speaker 3: six four percent four point six four percent, whereas Westpac 479 00:22:56,920 --> 00:22:59,320 Speaker 3: leading the way for the big banks at four eight 480 00:22:59,480 --> 00:23:02,320 Speaker 3: nine percent for two years at this point in time. 481 00:23:02,480 --> 00:23:05,080 Speaker 3: But most of the other fix rates on offer from 482 00:23:05,119 --> 00:23:07,440 Speaker 3: the big four banks are sitting there with a five 483 00:23:07,480 --> 00:23:10,520 Speaker 3: in front of it rather than a four. So you know, 484 00:23:10,680 --> 00:23:13,440 Speaker 3: if you are going to fix, go find yourself Gooddale. 485 00:23:13,240 --> 00:23:16,560 Speaker 1: Yes, okay, and be strategic and not panic. All right, 486 00:23:16,760 --> 00:23:20,080 Speaker 1: Very interesting, A quick couple of quick questions. I just 487 00:23:20,119 --> 00:23:22,680 Speaker 1: wanted to try and cover them if I could, John 488 00:23:22,800 --> 00:23:25,960 Speaker 1: j o N. John James. A recent episode you brought 489 00:23:26,040 --> 00:23:28,080 Speaker 1: up the question asked you whether there was a level 490 00:23:28,119 --> 00:23:31,280 Speaker 1: of employer mandated super at which someone should be allowed 491 00:23:31,320 --> 00:23:34,040 Speaker 1: to choose to have this paid via their way as 492 00:23:34,040 --> 00:23:36,080 Speaker 1: opposed to having it forced into super. This was me 493 00:23:36,119 --> 00:23:39,240 Speaker 1: talking about the sg guarantee now being at twelve percent 494 00:23:39,280 --> 00:23:42,760 Speaker 1: and being high I think across the board. Anyway, John 495 00:23:42,800 --> 00:23:44,720 Speaker 1: points out that there is a thing called the maximum 496 00:23:44,760 --> 00:23:48,480 Speaker 1: super Contribution base and it tends to be most applicable 497 00:23:48,480 --> 00:23:53,119 Speaker 1: to higher owners, whereby the standard sg C, you know, 498 00:23:53,160 --> 00:23:56,119 Speaker 1: the twelve percent applied against your income would result in 499 00:23:56,160 --> 00:23:59,919 Speaker 1: breaching the concession and contribution cap which is currently thirty k, 500 00:24:00,160 --> 00:24:04,080 Speaker 1: and thereby in occurring higher taxes. Yeah, that's there. That's 501 00:24:04,160 --> 00:24:06,200 Speaker 1: very true, John, Thank you for pointing that out. I mean, 502 00:24:06,240 --> 00:24:09,679 Speaker 1: you don't have to nobody has to be penalized for 503 00:24:09,720 --> 00:24:12,320 Speaker 1: paying their SGC. There is that opt out if you like, 504 00:24:12,359 --> 00:24:15,760 Speaker 1: the maximum super contribution base, which many people would be 505 00:24:15,800 --> 00:24:18,200 Speaker 1: hitting at this stage when it's twelve percent and it's 506 00:24:18,280 --> 00:24:22,199 Speaker 1: only thirty grand max contribution. Well, you don't have to 507 00:24:22,280 --> 00:24:24,000 Speaker 1: do your numbers for long to see how many people 508 00:24:24,040 --> 00:24:25,960 Speaker 1: would be caught there. Thank you very much, John. I 509 00:24:25,960 --> 00:24:28,919 Speaker 1: can't cover the rest of your expansive note, but that 510 00:24:29,080 --> 00:24:32,720 Speaker 1: was very useful. Okay, Adam says, I was alarmed to 511 00:24:32,760 --> 00:24:38,440 Speaker 1: hear you describe our treasure as shrewd. Battery finally reluctantly 512 00:24:38,480 --> 00:24:42,440 Speaker 1: and begrudgingly succumbed to common sense on the superannuation meddling, sorry, 513 00:24:42,520 --> 00:24:46,199 Speaker 1: the super reforms he has been peddling. Okay, well this 514 00:24:46,240 --> 00:24:48,959 Speaker 1: is from Adam. I said he was politically shrewd, and 515 00:24:49,000 --> 00:24:52,160 Speaker 1: I'll stand by that because that was a daft policy. 516 00:24:52,200 --> 00:24:54,080 Speaker 1: He shouldn't have gone ahead with it, and he hasn't. 517 00:24:54,200 --> 00:24:55,560 Speaker 1: That is the unrealized gains. 518 00:24:55,800 --> 00:24:59,440 Speaker 3: Just a comment about that annuation backflip that Jim Thomas did. 519 00:25:00,000 --> 00:25:01,840 Speaker 2: I just thought it was more like a half twist 520 00:25:02,080 --> 00:25:07,600 Speaker 2: rather than twist. We'll say not half, did I miss well, 521 00:25:07,840 --> 00:25:09,600 Speaker 2: kept half of it twisted on the other half. 522 00:25:09,680 --> 00:25:10,879 Speaker 1: Yeah, Oh no, I know what you're saying. 523 00:25:11,400 --> 00:25:13,040 Speaker 2: It'd be interesting to say if it gets through. 524 00:25:13,720 --> 00:25:17,720 Speaker 1: I mean, cut to the chase, the tax on super 525 00:25:17,840 --> 00:25:21,160 Speaker 1: earnings on super amounts above three million have suddenly doubled 526 00:25:21,200 --> 00:25:23,640 Speaker 1: from fifteen percent to thirty. So there you go, as 527 00:25:23,680 --> 00:25:26,760 Speaker 1: you say, half twist. Yeah, maybe he's half successful, maybe 528 00:25:26,760 --> 00:25:27,440 Speaker 1: he's half shrewd. 529 00:25:28,119 --> 00:25:28,520 Speaker 2: All right. 530 00:25:30,160 --> 00:25:32,480 Speaker 1: The other point, then, that Adam really wants to make 531 00:25:32,600 --> 00:25:36,240 Speaker 1: is about Melbourne, where we have people on the show 532 00:25:36,280 --> 00:25:38,760 Speaker 1: saying it is the bargain basement in the national market. 533 00:25:38,840 --> 00:25:42,080 Speaker 1: Right now, we've had several people saying it. We've had 534 00:25:42,160 --> 00:25:46,400 Speaker 1: very few people undermining that concept. Adam says, the idea 535 00:25:46,520 --> 00:25:49,520 Speaker 1: someone would want to invest money in the economy down 536 00:25:49,520 --> 00:25:52,480 Speaker 1: there is alarming. I keep hearing how cheap it is 537 00:25:52,760 --> 00:25:56,480 Speaker 1: a great time to buy, and can't help but see 538 00:25:56,520 --> 00:26:00,080 Speaker 1: a correlation to Jim Charmers blind refusal to see what 539 00:26:00,119 --> 00:26:02,880 Speaker 1: everybody else can see. The Victorian government debt is now 540 00:26:02,920 --> 00:26:06,720 Speaker 1: growing at two million an hour. I honestly think the 541 00:26:06,760 --> 00:26:09,040 Speaker 1: issues are terrifying, and I can't help think that so 542 00:26:09,040 --> 00:26:11,280 Speaker 1: many people must put their head the sand down there. 543 00:26:11,840 --> 00:26:15,960 Speaker 1: And he mentions other things like crime et cetera, and lawlessness. Okay, well, 544 00:26:16,480 --> 00:26:20,639 Speaker 1: deep breath, it's the second biggest city and the prices 545 00:26:20,680 --> 00:26:22,679 Speaker 1: are clearly the lowest in the land of all the 546 00:26:22,720 --> 00:26:27,280 Speaker 1: metropolitan capitals. They're trailing behind. And if you even had 547 00:26:27,280 --> 00:26:30,199 Speaker 1: to return to anything like remotely like historical averages, I 548 00:26:30,200 --> 00:26:32,919 Speaker 1: think there would be investors would do very well. And 549 00:26:33,040 --> 00:26:36,399 Speaker 1: investors are I know anecdotally. I haven't got the stats 550 00:26:36,400 --> 00:26:38,040 Speaker 1: for you, but I talk to advisors all the time 551 00:26:38,359 --> 00:26:41,880 Speaker 1: and they are bringing investors into Melbourne across. So yes, 552 00:26:41,960 --> 00:26:44,760 Speaker 1: the issue of the death et cetera is is, I 553 00:26:44,800 --> 00:26:46,840 Speaker 1: think is a big issue. I don't know so much 554 00:26:46,840 --> 00:26:49,720 Speaker 1: about the crime, whether that's a big issue living in city. 555 00:26:49,800 --> 00:26:52,880 Speaker 1: I look, it hasn't affected me in any fashion or way. 556 00:26:53,520 --> 00:26:56,280 Speaker 1: What do you think, Sally about Melbourne has a bargain basement. 557 00:26:57,240 --> 00:26:59,480 Speaker 2: You pass those prices, right. 558 00:26:59,480 --> 00:27:00,720 Speaker 1: It's hard to go past the prices. 559 00:27:00,840 --> 00:27:04,040 Speaker 3: Yeah, it's right when you look at the cost of 560 00:27:04,200 --> 00:27:08,520 Speaker 3: buying just a simple unit in Sydney and Brisbane these days, 561 00:27:08,560 --> 00:27:10,280 Speaker 3: you know, even Adelaid's going gangbusters. 562 00:27:10,359 --> 00:27:13,520 Speaker 2: In many ways, Melbourne is looking increasingly attractive. 563 00:27:13,560 --> 00:27:15,679 Speaker 3: I think there's a lot of nerves though, and I 564 00:27:15,720 --> 00:27:18,359 Speaker 3: think that's coming through in that email of you know. 565 00:27:18,320 --> 00:27:19,600 Speaker 2: The government is in debt. 566 00:27:19,800 --> 00:27:23,960 Speaker 3: The government has made some decisions that can impact people 567 00:27:24,040 --> 00:27:26,640 Speaker 3: like investors. They're worried probably that there's more to come 568 00:27:27,000 --> 00:27:30,720 Speaker 3: in those decision making and there, and that probably has 569 00:27:30,760 --> 00:27:34,760 Speaker 3: contributed to some of the you know cooling in prices there. 570 00:27:35,080 --> 00:27:38,280 Speaker 3: But people need places to live, and they need places 571 00:27:38,320 --> 00:27:42,800 Speaker 3: to live in employment hubs where there's good transport and 572 00:27:43,040 --> 00:27:46,439 Speaker 3: you know, there's you know, opportunities for education, and so 573 00:27:46,560 --> 00:27:51,080 Speaker 3: I do think that you know, Melbourne will I think 574 00:27:51,160 --> 00:27:55,440 Speaker 3: probably pick up pace as you know, as the months 575 00:27:55,480 --> 00:27:56,960 Speaker 3: and years unfold. 576 00:27:57,040 --> 00:27:59,159 Speaker 2: I think it might take a little bit of time though. 577 00:28:00,359 --> 00:28:02,679 Speaker 1: Isn't it very interesting? And thank you very much for 578 00:28:02,760 --> 00:28:06,200 Speaker 1: that stimulating peace of correspondence, Adam, Thank you very much. Okay, 579 00:28:06,280 --> 00:28:09,560 Speaker 1: keep them rolling the money puzzle at the Australian dot 580 00:28:09,560 --> 00:28:14,760 Speaker 1: com dot au for any questions, comments, observations, complaints. They're 581 00:28:14,800 --> 00:28:18,359 Speaker 1: all welcome, and so was Sally. Thank you very much, Sally. 582 00:28:18,520 --> 00:28:20,480 Speaker 1: Great to have you on the show again. Always terrific 583 00:28:20,560 --> 00:28:23,200 Speaker 1: to talk to you. Thanks and talk to you soon.