Speaker 1: Hello and welcome to the Australians Money Puzzle podcast. I'm
Speaker 1: James Kirby. Welcome aboard everybody. If you're a regular listener
Speaker 1: to the show and you tuned in last Tuesday the
Speaker 1: Property Show to hear Tim Lowles, the head of research
Speaker 1: at the property research group Cautality. He really caught my
Speaker 1: attention with something. A lot of property investors may not
Speaker 1: have considered this just yet, or homeowners for that matter.
Speaker 1: But Tim Lowless said, we're getting close to the bottom
Speaker 1: of the interest rate cutting cycle and if there's another
Speaker 1: cut on Melbourne Cup Day, which is likely ish, it
Speaker 1: means we may not see one as expected early next year.
Speaker 1: And then I am quoting Tim here. And remember that
Speaker 1: this guy is now this is his whole thing, Okay,
Speaker 1: property stats, interest rates research, where the market is moving.
Speaker 1: And he said more people are starting to do their numbers,
Speaker 1: aren't fixing and are weighing up the pros and cons.
Speaker 1: Isn't that interesting? So I thought, well, let's get someone
Speaker 1: to talk about that who would be good on that.
Speaker 1: The ideal person, of course is Sally Tindle, a can star.
Speaker 1: We're going to talk about that. We're going to talk
Speaker 1: first about the whole situation with rates and where they're
Speaker 1: going on, how much you get for your money, and
Speaker 1: then we'll go into the idea of fixing.
Speaker 2: Oh are you Sally, I'm great, James, how are you good?
Speaker 1: Nice to have you on again. I really think that
Speaker 1: investors should tune in here because there is a point
Speaker 1: in time, but you might just give us an entrade
Speaker 1: to this entire situation and tell us like basically where
Speaker 1: we are right. We've had this cutting cycle. It's been
Speaker 1: going on for some time. We think we're coming towards
Speaker 1: the end. I go for money in the banks as
Speaker 1: opposed to borrowing from them. What's this what sort of
Speaker 1: guideline at the moment? What are people getting on deposit
Speaker 1: and what would be the best rates at the stage.
Speaker 3: It's really interesting to look at the numbers because we
Speaker 3: saw on the way up, with all the interest rate hikes.
Speaker 3: On the way down, banks are still picking and choosing
Speaker 3: which savings accounts get a cut, which might miss out,
Speaker 3: which is a good thing in a cutting cycle, or
Speaker 3: they might they might be juggling between base rates and
Speaker 3: bonus rates to make their profit margins still stack up.
Speaker 2: So before the hikes, we saw.
Speaker 3: The average ongoing savings rate at zero point three nine percent.
Speaker 2: I mean, that's just ridiculous, isn't it.
Speaker 3: At the peak it was three point four to three percent,
Speaker 3: and then today is three point zero six percent.
Speaker 2: So banks on.
Speaker 3: The way up didn't pass on all the rate hikes
Speaker 3: on the way down, they haven't passed through all the
Speaker 3: rate cuts when you're looking at those average rates. But
Speaker 3: there's a world of difference between an average rate and
Speaker 3: a competitive one. So I just said three point zero
Speaker 3: six that's the average ongoing savings rate on our database
Speaker 3: at this point in time.
Speaker 2: It's excluding kids accounts.
Speaker 3: I believe today the highest ongoing savings rate is five percent.
Speaker 2: It's still five percent.
Speaker 1: That's really interesting. So a call as such, should you
Speaker 1: should be getting three? But there are better rates than that,
Speaker 1: and you can still get up to five. This figure five,
Speaker 1: Can you frame it for us? Is it? Is it
Speaker 1: a term deposit? Is it? Do you have to keep
Speaker 1: it in for years?
Speaker 2: No, it's at call.
Speaker 3: There are a world of caveats around it though, because
Speaker 3: it's only for people aged eighteen to thirty four. I
Speaker 3: believe now it's from west packet that Westpac just increase
Speaker 3: the age bracket.
Speaker 2: So you have to be young. It unfortunately rules me
Speaker 2: out in a significant way. I would say, what's that?
Speaker 1: Yes, I get it, Yeah, okay, and.
Speaker 3: Looking for first home buyers, right, But you also then
Speaker 3: have to make twenty plus transactions on a linked bank
Speaker 3: account in any given month and grow.
Speaker 2: Your savings balance in a month.
Speaker 3: So there's lots of terms and conditions to qualify for
Speaker 3: that five percent rate. And let me tell you they
Speaker 3: are by themselves at that five percent ongoing rate. A
Speaker 3: competitive savings rate is more around the four point five mark.
Speaker 3: A competitive and realistic savings.
Speaker 1: Rape some well term deposits. I know that traditionally people
Speaker 1: were using things like mcquarie. I think has always been
Speaker 1: in the mix. Assn't I in g I'm naming these
Speaker 1: off the top of my head. There by no means promotions.
Speaker 1: Further one, let me tell you, do you have any
Speaker 1: sense of what are the most popular for investors or
Speaker 1: for people with serious levels of cash that are moving
Speaker 1: within the banking system. They don't have to be in
Speaker 1: the Big four.
Speaker 2: Yeah.
Speaker 3: So it's interesting to see because the Big four suddenly
Speaker 3: aren't posting the highest rates, the highest term deposit rates
Speaker 3: that I can see for any term is first option bank,
Speaker 3: but it's only a three month term at four point
Speaker 3: five percent, and these move around all the time. I've
Speaker 3: done this on the balance of fifty thousand dollars as well.
Speaker 3: Let's be clear, for a six month term deposit rate
Speaker 3: you're looking at in one bank, there are relatively new
Speaker 3: incomer at four point three eight percent, and then when
Speaker 3: you want to get into the one year, two years,
Speaker 3: three years, they're very much dominated by Judo Bank, Rabobank,
Speaker 3: move Bank, and they're sitting around that four percent mark.
Speaker 3: That's for the highest term deposit rates. If you're looking
Speaker 3: at the Big four, very different story.
Speaker 1: Just for the talk about the Big four. So you've
Speaker 1: seen four and a half percent on a extended time
Speaker 1: period term deposit two years or so, four and a
Speaker 1: half percent is what you should that's the maximum, it's
Speaker 1: what's possible.
Speaker 2: Oh only just that was for three months.
Speaker 3: I'm saying around the four percent mark, and you really
Speaker 3: have to stretch yourself to go and find that competitive rate.
Speaker 2: They're not that.
Speaker 3: Easy to find at four percent. Whereas you balance it
Speaker 3: up against the APT core savings accounts rates where you
Speaker 3: should easily be able to find an ongoing savings rate
Speaker 3: at four percent, You just in many cases have to
Speaker 3: meet some prickly monthly terms and conditions.
Speaker 2: And you mentioned.
Speaker 3: Mcquarie Bank before because they're one of the ones that
Speaker 3: have no strings attached savings account rates.
Speaker 2: So that might suit.
Speaker 3: People who are betting that there's not many more cash
Speaker 3: rate cuts to come and don't want the fuss of
Speaker 3: meeting certain terms and conditions. Mcquarie certainly is a leader
Speaker 3: in that space, but so is Able Banking and austrayan
Speaker 3: Unity Heartland Bank AMP. They're all offering no strings attached
Speaker 3: savings accounts that are at core with decent balance caps.
Speaker 2: Might I add.
Speaker 3: Anywhere between four point twenty five percent and four point
Speaker 3: five five percent?
Speaker 1: Okay? Then do they have these these are our called okay,
Speaker 1: and they have no strings attached. We take that as
Speaker 1: red hard to believe, but I'll take your word for it.
Speaker 2: Ah. The only string that I are the only obvious strings.
Speaker 3: So there's no age caps, there's no monthly terms in conditions.
Speaker 2: Some of them have welcome rates.
Speaker 3: But we're ignoring them completely because they only last for
Speaker 3: what four or five months maximum. The only cap I'm
Speaker 3: including is a balance cap. And so for example, I
Speaker 3: mentioned Astray and Unity. It has a balance cap of
Speaker 3: fifty thousand dollars, so as soon as you get just
Speaker 3: over fifty thousand dollars in that account, you won't get
Speaker 3: that high rate. But others like mcquarie offering four point
Speaker 3: two five percent, they've got a balance cap of two million.
Speaker 1: Right, so ironically if you put in more or your
Speaker 1: read actually might reduce on the amount over their cap time.
Speaker 2: Absolutely.
Speaker 3: Oh look, these accounts lit it with you know, age caps,
Speaker 3: balance cats, monthly caps, withdrawal caps, you name it. Same
Speaker 3: as accounts are absolutely littered with terms and conditions where
Speaker 3: if you put one foot wrong in any given month,
Speaker 3: you could see your interest rate go from like four
Speaker 3: and a half down to in some cases zero point
Speaker 3: zero zero percent.
Speaker 1: Yeah, that's a crucial point. That's a really good point.
Speaker 1: Keep that in mind, folks. This is literally it's become
Speaker 1: a game. And I think it would be innocent of
Speaker 1: you to go into a bank and think that you
Speaker 1: can put your money in and get a certain rate
Speaker 1: without some conditions. Some of them are more subtle than others,
Speaker 1: like the ones that at least just talking about caps,
Speaker 1: for instance, but they want to know how much you
Speaker 1: might wonder why they want to do that, But I
Speaker 1: suppose they just want more customers on these rates, So
Speaker 1: sally do the deposit rates then reflect it's starting to
Speaker 1: drop basically in anticipation of where we might be going
Speaker 1: on the cycle, because if Tim is right, and many
Speaker 1: economists are right, we are coming to the end of
Speaker 1: the cutting cycle.
Speaker 3: Yeah, it's interesting. I do think we're also coming to
Speaker 3: the end of the cutting cycle. Look, I'm going to
Speaker 3: throw it out there. We could be at the end already.
Speaker 3: We don't know certainly. You know, there's a meeting coming up,
Speaker 3: there's a lot of speculation about what might happen. But
Speaker 3: with inflation really still struggling to get back to that
Speaker 3: target band in a consistent manner, I do wonder whether
Speaker 3: we are already at the end. Certainly, if you've got
Speaker 3: money in the bank, if you've got a mortgage, you
Speaker 3: should not be banking or counting on something happening for.
Speaker 2: Certain because we just don't know.
Speaker 3: Looking at the Big four bank forecasts, and these could
Speaker 3: change in coming days when we get that inflation data.
Speaker 3: But looking at the big four banks, we've got A
Speaker 3: and Z, CBA and NAB all saying one more cut
Speaker 3: and West Facts still saying three, although I do feel
Speaker 3: like that.
Speaker 2: Forecast might change.
Speaker 1: That's change, that's yeah.
Speaker 3: That can give you a good idea of the spectrum.
Speaker 3: Three of the big four banks are saying no more
Speaker 3: cuts this year. West Pak is the only one saying
Speaker 3: one could come at the next meeting.
Speaker 2: But again time will tell when we get a better.
Speaker 3: Read on the inflation data and marry it up with
Speaker 3: the unemployment data. What's really interesting for the RBA at
Speaker 3: this point in time is that previously, when inflation was
Speaker 3: really running out of hand, it was really easy decisions
Speaker 3: for them to just know, hike and get inflation under control.
Speaker 3: Now that they've got inflation under control, the balancing act
Speaker 3: between their two key priorities keeping his strands in jobs
Speaker 3: and keeping inflation in check is becoming a lot harder.
Speaker 3: So I think that the decision making for the RBA
Speaker 3: is quite fought at this point in time.
Speaker 2: Now we're getting to the bottom of the cycle.
Speaker 1: And I suppose what's really important for our listeners I'm
Speaker 1: going to deal with this and in Moorman, folks, is that
Speaker 1: the banks don't hang around for the official rates to
Speaker 1: take their turn. They move off and the head of
Speaker 1: the future direction, so you might be thinking of fixing
Speaker 1: for the first time. They've been thinking about it for
Speaker 1: some time. Back in a moment, Hello and welcome back
Speaker 1: to The Australian's Money Puzzle podcast. I'm James Kirby and
Speaker 1: I'm talking to Sally Tindall, who is the data insights
Speaker 1: director at Canstar, the Comparison rate comparison service. You said
Speaker 1: something very interesting in the first segment which dovetails very
Speaker 1: much with what Tim Lowless is saying. And I've got
Speaker 1: two of you now. I've got someone who's in a
Speaker 1: cross rates and someone who's across property and they are
Speaker 1: both saying that we're coming to the end of the
Speaker 1: cycle and people are starting to think about fixing. I
Speaker 1: don't know if you're saying that, but tell us first
Speaker 1: of all, tell us the picture. I imagine no one's
Speaker 1: fixing right now and that activity has shrunk enormously because
Speaker 1: we've had a cutting cycle. I don't know is that
Speaker 1: the case.
Speaker 3: Ly, and I think I might need to take you
Speaker 3: on a little bit of a journey just to remind
Speaker 3: ourselves about Australians and our attitude towards fixing. So you know,
Speaker 3: often it's based on you know, an increasing fixing is
Speaker 3: often based on you know, strategic priorities for the banks,
Speaker 3: what the neighbor's doing, things like that, rather than whether
Speaker 3: we're at the top or the bottom of the cycle.
Speaker 3: But if you think about it strands, we might like
Speaker 3: to gamble on what two up or something, but we
Speaker 3: don't like to gamble on our mortgage when just not
Speaker 3: big fixes, I think because we're petrified of the break
Speaker 3: fees that still potentially come with fixed rates and if
Speaker 3: you want to.
Speaker 2: Get out early.
Speaker 3: So the peak of fixing was in July twenty twenty one,
Speaker 3: when forty six percent of new and refinance loans opted
Speaker 3: for a fix rate that wasn't even half And this
Speaker 3: was when the banks were offering in some cases four
Speaker 3: year fix rates that started with the one and only
Speaker 3: half of us opted to fix.
Speaker 2: Isn't that incredible? It is?
Speaker 1: It is really look back. I mean, what were people
Speaker 1: thinking it was going to go lower? It was still
Speaker 1: all forever, I wonder.
Speaker 2: But really I fixed for two years. I'm kicking myself.
Speaker 2: I didn't fix before. I was just so silly.
Speaker 3: But the second biggest peak in fixing in recent data
Speaker 3: was right before the GFC and that's when you know,
Speaker 3: interest rates are like a discount. A variable rate was
Speaker 3: sitting at I've looked it up eight point ninety six
Speaker 3: percent according to the RBA standard variable rates were over
Speaker 3: nine percent. People thought that rates would be getting over
Speaker 3: ten percent at one point and not everyone, but a
Speaker 3: lot of people about a quarter panic fixed at that point.
Speaker 2: And then what happened.
Speaker 1: Are people more likely to fix in our market out
Speaker 1: of fear that the rates are going too high than
Speaker 1: they are to take opportunity of the fact that they're
Speaker 1: super low.
Speaker 2: Well, I think it was a bit of both.
Speaker 3: So absolutely, back in just before the GFC, just before
Speaker 3: rates fell off a cliff yep, that was panic fixing,
Speaker 3: Absolutely because rates were sitting at the nine percent mark, right,
Speaker 3: But back you know, then fast forward to you know, COVID.
Speaker 3: Maybe there was a little bit of fear in there
Speaker 3: because it was the fear of unknown. Absolutely, but that
Speaker 3: was really driven by the banks offering incredibly sharp rates.
Speaker 3: And why were the banks offering incredibly sharp rates because
Speaker 3: they were working with the government, They were working with
Speaker 3: the RBA, and the RBA was handing them out cheap
Speaker 3: six rate funding. So again, it wasn't that we were
Speaker 3: at the bottom of the top of the cycle.
Speaker 2: So much as there was this other factor at play
Speaker 2: that we're.
Speaker 3: Driving people to actually lock in their rates, then the
Speaker 3: rate hikes happened.
Speaker 2: Everyone fled from fixing.
Speaker 3: The lowest rate of fixing was April twenty twenty four,
Speaker 3: so we were almost done with the cash rate hikes,
Speaker 3: and it was one point two percent of new and
Speaker 3: refinance loans.
Speaker 1: It fell from forty six to one one point two.
Speaker 1: What do you think it is right now?
Speaker 2: So we don't know.
Speaker 3: So the ABS unfortunately has stopped publishing this data, so
Speaker 3: we now crawl through the weeds of the big banks
Speaker 3: books so whenever they do half year or full year results.
Speaker 2: But it's still incredibly low.
Speaker 3: I do know that much because I'm looking at CBA's
Speaker 3: most recent results. They're full year results, and fixing is
Speaker 3: about one percent of new mortgages coming through and five
Speaker 3: percent of the whole loan book, and some of them
Speaker 3: will still have been you know, legacy fixes from back
Speaker 3: in twenty twenty one, twenty twenty two periods, So really
Speaker 3: incredibly low.
Speaker 2: Do you know why?
Speaker 3: Okay, so the big question is why, and you're about
Speaker 3: to ask me this, I know, but the lowest fix
Speaker 3: rate on our database is significantly lower than the lowest variable,
Speaker 3: even though there's.
Speaker 2: More one more cash rate cut to come.
Speaker 3: We don't know, but you know, I think that's because
Speaker 3: borrows aren't really sure how many cash rate cuts are
Speaker 3: still to come, and they really want to believe there's
Speaker 3: more than just one coming.
Speaker 1: Right, Yes, but no one rings a bell, of course,
Speaker 1: this is the thing, right, No one rings a bell
Speaker 1: at the bottom, and no one rings a bell at
Speaker 1: the top.
Speaker 3: And you can never be certain except with the you know,
Speaker 3: clarity of hindsight. And the penalties for fixing and often
Speaker 3: be far more significant than the penalties for getting it
Speaker 3: wrong un variable.
Speaker 1: I have two things here. The first thing I want
Speaker 1: to just before we talk about the penalties, is there
Speaker 1: anything like an average long term average of fixing.
Speaker 2: I don't have it, Handy.
Speaker 1: It sounds like if it was one, it was, it
Speaker 1: would tell us very little anyway, because if it ranges
Speaker 1: from forty six to one. Yeah, So like the average
Speaker 1: Meltbourne temperature in January, you know, twenty eight degrees doesn't
Speaker 1: tell you anything.
Speaker 3: I'm going to take a punch and I'm going to
Speaker 3: say somewhere between five and ten percent, I'd say it's
Speaker 3: always been low.
Speaker 1: Okay, all right, Now about the penalties, I thought in
Speaker 1: my naivity that the penalties were more or less gone.
Speaker 2: So exit fees on mortgages are gone.
Speaker 3: They hit the curb twenty ten or twenty twelve, one
Speaker 3: of those two years, but a long time ago. Previously
Speaker 3: banks could sting you, whether you were on a fixed
Speaker 3: or weariable rate, for exiting your mortgage before your thirty
Speaker 3: years are up, and they were astronomical fees, and so
Speaker 3: they've gone. Now there are fees for applying for a
Speaker 3: home loan. There are fees for discharging a home loan,
Speaker 3: but they're relatively small at about three hundred and fifty
Speaker 3: dollars for those discharge fees, different to exit fees. There's
Speaker 3: some state government fees for you know, switching.
Speaker 2: Lenders as well and things like that.
Speaker 3: But you know, all in all, we estimate that someone
Speaker 3: that's switching their mortgage is paying what about one to
Speaker 3: one and a half thousand dollars in fees, some of
Speaker 3: which are negotiable. So there's not those big exit fee
Speaker 3: penalties on variable rates. But if you sign up to
Speaker 3: a fixed rate and you said to the bank, yes,
Speaker 3: I'm going to pay a fixed rate of five percent
Speaker 3: for the next two years, and you break that contract
Speaker 3: early and the bank is out of pocket because you
Speaker 3: broke that contract, they are entitled to charge you what
Speaker 3: they're out of pocket costs.
Speaker 1: Okay, and they can I see.
Speaker 3: And sometimes yeah, sometimes these are negotiable and sometimes I've
Speaker 3: can depend on where your next step is. So if
Speaker 3: you say to your bank, I really just want to
Speaker 3: move to a more competitive fixed rate, they might wait
Speaker 3: the feats. If you say, I want to stick with you,
Speaker 3: but I want to go to variable, but I'm going
Speaker 3: to stay with you, guys, maybe they'll negotiate those fees.
Speaker 2: It's always worth having that conversation.
Speaker 1: And obviously the worst one is if you see I
Speaker 1: can't do it anymore and I'm leaving you entirely, then
Speaker 1: obviously why wouldn't they impose their charges that they can legally? Okay,
Speaker 1: So million dollar question, if I talked to you this
Speaker 1: time next year, what do you think the fixed ratio
Speaker 1: will be. Do you think if we have no more cuts,
Speaker 1: and if we find clear stabilization and if the cycle
Speaker 1: is clearly over, do you think we'll see a lift
Speaker 1: in the number of people fixing or at least considering it.
Speaker 3: I do think we'll see a lift in the number
Speaker 3: of people fixing, but I don't think it'll be a
Speaker 3: significant one. I'm not going back to the days of
Speaker 3: where we were close to half of the people.
Speaker 2: Opting for a fixed rate.
Speaker 3: I think some of those people that tried out fixing,
Speaker 3: perhaps for the firs time, in that period of record
Speaker 3: low rates, really liked the certainty that it brought. I
Speaker 3: certainly know that from talking to you know, friends who've
Speaker 3: you know, always interested in working out you know, what's
Speaker 3: happening with fixed rates because they want to fix again
Speaker 3: because they liked that certainty. So I do think that
Speaker 3: perhaps that period of low rates has encouraged people and
Speaker 3: opens people's minds to that certainty where I think fixing
Speaker 3: gets problematic and where you know, we won't see these shots.
Speaker 3: Why we won't see this sharp space spike, brother is
Speaker 3: because the break fees problematic.
Speaker 2: But also fixed rates tend to be a lot.
Speaker 3: Less flexible, so you typically can't get an offset account
Speaker 3: with them. You typically have caps on how much extra
Speaker 3: you can pay in that fixed rate term, and again
Speaker 3: that turns some people off. Although you know, some people
Speaker 3: do then have a foot in both camps, opt for
Speaker 3: a split loan, you know, take a gamble each way,
Speaker 3: but also get the flexibility that a variable rate can
Speaker 3: bring on that portion of their homeland, take advantage of
Speaker 3: an offset account whatever they want, and then have that
Speaker 3: security from the fixed rates.
Speaker 2: So it's about.
Speaker 3: Working out what suits your finances but also your personality,
Speaker 3: because there's some people that hate, absolutely hate the idea
Speaker 3: of locking in a rate and then seeing variable rates
Speaker 3: fullfill further that's just yes, horrifying to them, whereas other
Speaker 3: people absolutely hate worrying about THERBA like day in and
Speaker 3: day out, although it's only eight meetings a year now,
Speaker 3: so it's helpful.
Speaker 1: And those people who will be horrified to have not
Speaker 1: taken a fixed rate and watched the variables climb. And
Speaker 1: the thing about the split chorus, folks, is that you've
Speaker 1: got two sets of numbers, you've got two sets of fees.
Speaker 1: I've done it, I've done all the variations. Actually, what
Speaker 1: advisors say for what it's worth, and I'm always talking
Speaker 1: to advisers and talk to some of the best advisors
Speaker 1: in the country. What they do tend to see is
Speaker 1: don't gamble, don't fix to best against the bank, because
Speaker 1: you probably never win. But if you're a fixer, fix consistently,
Speaker 1: so for instance, you have a home mortgage and you
Speaker 1: had it for twenty years and you had four sets
Speaker 1: of five year fixes, you'll find that it smooths out
Speaker 1: really nicely over that period of time. And what your
Speaker 1: advantage falls back largely to what Sally is saying, which
Speaker 1: is you actually can do your numbers and you can
Speaker 1: be sure of what your numbers are. I think that
Speaker 1: is actually the ultimate comfort. Whether you win or lose
Speaker 1: against the bank. You know, you may win for a
Speaker 1: passage of play, a passage of time, and you might
Speaker 1: lose for another part. But really it's about the security
Speaker 1: of it. That's really good Sally, and very interesting terrific
Speaker 1: I think for us, I haven't seen many people talk
Speaker 1: about this. It's about time we did. All right, we'll
Speaker 1: be back in a moment. Hello, Welcome back to The
Speaker 1: Australian's Money Puzzle podcast. James Kirby here with Sally Tindle
Speaker 1: of Canstar, regular guests on the show. Terrific guest to
Speaker 1: give us a picture of where it's all going in
Speaker 1: terms of the market. Both your money in the bank,
Speaker 1: which is just to recap if I get any of
Speaker 1: this wrong, Tanby Sally, you're talking fours is a good
Speaker 1: way to get now with with deposits and term deposits,
Speaker 1: et cetera, and three is sort of working average across
Speaker 1: the banks. And we'll put all that, We'll put all
Speaker 1: the tricks and caps and everything else to one side
Speaker 1: for the moment.
Speaker 2: That's really interesting in clearly lovely yes.
Speaker 1: And on the borrowing side, no one is fixing. No
Speaker 1: one is fixing all right. Of course it's not fixing
Speaker 1: because the rates have been dropping. But if you fix,
Speaker 1: what if you fix now? What if you fixed at
Speaker 1: these levels at four percent, say, and then it floated
Speaker 1: back up to eight or nine. Well, I've seen it
Speaker 1: all happen. Let me tell you. I've seen it all happen.
Speaker 1: I've seen people fixing the I remember people fixing at
Speaker 1: thirteen percent, Sally because they were worried it was going
Speaker 1: to go higher.
Speaker 2: So you see to that panic fixing.
Speaker 1: Panic fixing, Yeah, that's right.
Speaker 3: The driver is you know what your neighbor's doing, and
Speaker 3: sometimes it's because your neighbor's panicking and you feel like
Speaker 3: you should panic too. And I think that's the key
Speaker 3: with so many things relating to finance is just because
Speaker 3: what your neighbor do doesn't automatically make it a perfect
Speaker 3: idea for you. You've got to understand what suits your finances.
Speaker 3: It's so important. But also don't make any decision in
Speaker 3: a rush. Sometimes these things come with limited time specials
Speaker 3: things like that nothing should be rushed if you need
Speaker 3: to talk through it with a mortgage broker or a
Speaker 3: financial advisor, your accountant, your neighbor, your family friend, take
Speaker 3: that time to work it out and work out what
Speaker 3: suits your finances. And what I did want to say
Speaker 3: before is you know, if you are thinking about fixing,
Speaker 3: there is a world of difference between say the Big
Speaker 3: four bank fix rates lowest fix rates and then the
Speaker 3: lowest on the market. We've got the lowest on the
Speaker 3: market on our database at the moment at four point
Speaker 3: six four percent four point six four percent, whereas Westpac
Speaker 3: leading the way for the big banks at four eight
Speaker 3: nine percent for two years at this point in time.
Speaker 3: But most of the other fix rates on offer from
Speaker 3: the big four banks are sitting there with a five
Speaker 3: in front of it rather than a four. So you know,
Speaker 3: if you are going to fix, go find yourself Gooddale.
Speaker 1: Yes, okay, and be strategic and not panic. All right,
Speaker 1: Very interesting, A quick couple of quick questions. I just
Speaker 1: wanted to try and cover them if I could, John
Speaker 1: j o N. John James. A recent episode you brought
Speaker 1: up the question asked you whether there was a level
Speaker 1: of employer mandated super at which someone should be allowed
Speaker 1: to choose to have this paid via their way as
Speaker 1: opposed to having it forced into super. This was me
Speaker 1: talking about the sg guarantee now being at twelve percent
Speaker 1: and being high I think across the board. Anyway, John
Speaker 1: points out that there is a thing called the maximum
Speaker 1: super Contribution base and it tends to be most applicable
Speaker 1: to higher owners, whereby the standard sg C, you know,
Speaker 1: the twelve percent applied against your income would result in
Speaker 1: breaching the concession and contribution cap which is currently thirty k,
Speaker 1: and thereby in occurring higher taxes. Yeah, that's there. That's
Speaker 1: very true, John, Thank you for pointing that out. I mean,
Speaker 1: you don't have to nobody has to be penalized for
Speaker 1: paying their SGC. There is that opt out if you like,
Speaker 1: the maximum super contribution base, which many people would be
Speaker 1: hitting at this stage when it's twelve percent and it's
Speaker 1: only thirty grand max contribution. Well, you don't have to
Speaker 1: do your numbers for long to see how many people
Speaker 1: would be caught there. Thank you very much, John. I
Speaker 1: can't cover the rest of your expansive note, but that
Speaker 1: was very useful. Okay, Adam says, I was alarmed to
Speaker 1: hear you describe our treasure as shrewd. Battery finally reluctantly
Speaker 1: and begrudgingly succumbed to common sense on the superannuation meddling, sorry,
Speaker 1: the super reforms he has been peddling. Okay, well this
Speaker 1: is from Adam. I said he was politically shrewd, and
Speaker 1: I'll stand by that because that was a daft policy.
Speaker 1: He shouldn't have gone ahead with it, and he hasn't.
Speaker 1: That is the unrealized gains.
Speaker 3: Just a comment about that annuation backflip that Jim Thomas did.
Speaker 2: I just thought it was more like a half twist
Speaker 2: rather than twist. We'll say not half, did I miss well,
Speaker 2: kept half of it twisted on the other half.
Speaker 1: Yeah, Oh no, I know what you're saying.
Speaker 2: It'd be interesting to say if it gets through.
Speaker 1: I mean, cut to the chase, the tax on super
Speaker 1: earnings on super amounts above three million have suddenly doubled
Speaker 1: from fifteen percent to thirty. So there you go, as
Speaker 1: you say, half twist. Yeah, maybe he's half successful, maybe
Speaker 1: he's half shrewd.
Speaker 2: All right.
Speaker 1: The other point, then, that Adam really wants to make
Speaker 1: is about Melbourne, where we have people on the show
Speaker 1: saying it is the bargain basement in the national market.
Speaker 1: Right now, we've had several people saying it. We've had
Speaker 1: very few people undermining that concept. Adam says, the idea
Speaker 1: someone would want to invest money in the economy down
Speaker 1: there is alarming. I keep hearing how cheap it is
Speaker 1: a great time to buy, and can't help but see
Speaker 1: a correlation to Jim Charmers blind refusal to see what
Speaker 1: everybody else can see. The Victorian government debt is now
Speaker 1: growing at two million an hour. I honestly think the
Speaker 1: issues are terrifying, and I can't help think that so
Speaker 1: many people must put their head the sand down there.
Speaker 1: And he mentions other things like crime et cetera, and lawlessness. Okay, well,
Speaker 1: deep breath, it's the second biggest city and the prices
Speaker 1: are clearly the lowest in the land of all the
Speaker 1: metropolitan capitals. They're trailing behind. And if you even had
Speaker 1: to return to anything like remotely like historical averages, I
Speaker 1: think there would be investors would do very well. And
Speaker 1: investors are I know anecdotally. I haven't got the stats
Speaker 1: for you, but I talk to advisors all the time
Speaker 1: and they are bringing investors into Melbourne across. So yes,
Speaker 1: the issue of the death et cetera is is, I
Speaker 1: think is a big issue. I don't know so much
Speaker 1: about the crime, whether that's a big issue living in city.
Speaker 1: I look, it hasn't affected me in any fashion or way.
Speaker 1: What do you think, Sally about Melbourne has a bargain basement.
Speaker 2: You pass those prices, right.
Speaker 1: It's hard to go past the prices.
Speaker 3: Yeah, it's right when you look at the cost of
Speaker 3: buying just a simple unit in Sydney and Brisbane these days,
Speaker 3: you know, even Adelaid's going gangbusters.
Speaker 2: In many ways, Melbourne is looking increasingly attractive.
Speaker 3: I think there's a lot of nerves though, and I
Speaker 3: think that's coming through in that email of you know.
Speaker 2: The government is in debt.
Speaker 3: The government has made some decisions that can impact people
Speaker 3: like investors. They're worried probably that there's more to come
Speaker 3: in those decision making and there, and that probably has
Speaker 3: contributed to some of the you know cooling in prices there.
Speaker 3: But people need places to live, and they need places
Speaker 3: to live in employment hubs where there's good transport and
Speaker 3: you know, there's you know, opportunities for education, and so
Speaker 3: I do think that you know, Melbourne will I think
Speaker 3: probably pick up pace as you know, as the months
Speaker 3: and years unfold.
Speaker 2: I think it might take a little bit of time though.
Speaker 1: Isn't it very interesting? And thank you very much for
Speaker 1: that stimulating peace of correspondence, Adam, Thank you very much. Okay,
Speaker 1: keep them rolling the money puzzle at the Australian dot
Speaker 1: com dot au for any questions, comments, observations, complaints. They're
Speaker 1: all welcome, and so was Sally. Thank you very much, Sally.
Speaker 1: Great to have you on the show again. Always terrific
Speaker 1: to talk to you. Thanks and talk to you soon.