WEBVTT - Ask Adam: Will interest rates rise? What should we do? 0:00:00.480 --> 0:00:03.640 Good morning, everyone, and welcome back to another episode of 0:00:03.720 --> 0:00:08.000 Sugar Mama's Fireplay. I am your host's financial planner, Cannah Campbell, 0:00:08.080 --> 0:00:12.119 and today we have our number one favorite mortgage broker 0:00:12.280 --> 0:00:15.080 in the studio this morning, getting to pick his brain 0:00:15.120 --> 0:00:17.680 and ask all of those very important questions you need 0:00:17.720 --> 0:00:20.599 to know about the mortgage industry, how to get the 0:00:20.640 --> 0:00:23.400 monkey off your back, and how to actually use your 0:00:23.400 --> 0:00:26.520 financial assets to build well. Now, to make sure that 0:00:26.520 --> 0:00:28.400 we keep as a happy I need to read at 0:00:28.400 --> 0:00:32.440 my general advice morning and disclaimer. Please know that anything 0:00:32.479 --> 0:00:35.880 that myself or Adam talk about is purely educational based 0:00:35.920 --> 0:00:39.720 and never personal product or investment advice whatsoever, or even 0:00:39.760 --> 0:00:43.239 strategic advice for that matter. Now, if you want to 0:00:43.280 --> 0:00:46.920 actually ask Adam some questions yourself, please always feel free 0:00:47.000 --> 0:00:50.320 to send him a DM on Instagram at Blue Lantern 0:00:50.840 --> 0:00:54.760 Home Loans Adam's team which is Adam, Joe or John, 0:00:54.800 --> 0:00:56.480 I'm more than happy to reply back. And if you 0:00:56.480 --> 0:00:59.200 want to check in for a free mortgage health check, 0:00:59.280 --> 0:01:01.840 you are more than welcome to. And please know that 0:01:01.960 --> 0:01:05.880 I get absolutely no commission, no referrals for this whatsoever. 0:01:05.959 --> 0:01:08.560 I'm just happy to have an expert that I personally know, 0:01:09.240 --> 0:01:24.000 I professionally use and no one trusts for over eighteen years. 0:01:32.200 --> 0:01:34.400 All right, Adam, good morning, how are you? 0:01:34.440 --> 0:01:35.960 Good morning, Cannon. I'm well. How are you. 0:01:36.080 --> 0:01:37.959 I'm well, I'm well. I actually have something to read 0:01:38.000 --> 0:01:40.720 out to you. So recently you looked after a friend 0:01:40.760 --> 0:01:43.760 of mine and going through a bit of a tough time, 0:01:44.600 --> 0:01:47.520 and she sent me a message and it was a 0:01:47.560 --> 0:01:49.880 really beautiful message. So I wanted to read this out you. 0:01:50.640 --> 0:01:51.200 Hi, darling. 0:01:51.400 --> 0:01:53.240 I can't thank you enough for putting me in touch 0:01:53.240 --> 0:01:56.000 with Adam. It was so nice to finally feel like 0:01:56.080 --> 0:01:59.080 someone has my back. And he was so patient with me, 0:01:59.240 --> 0:02:03.760 explaining everything in a non intimidating way. Nothing was too hard. 0:02:04.120 --> 0:02:06.400 He really is incredible at what he does. 0:02:07.120 --> 0:02:08.440 Excellent. I love that. Yeah? 0:02:08.600 --> 0:02:09.120 Is that nice? 0:02:09.200 --> 0:02:10.600 Yeah? Really good? Thanks for sharing. 0:02:11.639 --> 0:02:13.760 All right, I have a lot of questions to ask you, 0:02:14.360 --> 0:02:16.720 and I really want to get stuck into this straight away. 0:02:16.760 --> 0:02:19.800 So the most important question that's not only burning on 0:02:19.800 --> 0:02:22.880 the tip of my tongue as well as everyone else's 0:02:23.680 --> 0:02:26.519 taking into consideration. Of course, you don't have a crystal ball, 0:02:27.240 --> 0:02:31.480 but what does your professional and personal intuition and guart 0:02:31.639 --> 0:02:34.600 think will say is going to happen to interest rates, 0:02:34.600 --> 0:02:35.200 I should. 0:02:34.919 --> 0:02:36.000 Say this year. 0:02:36.840 --> 0:02:37.840 Yeah, it's a tough one. 0:02:38.000 --> 0:02:39.560 I want to hear what you genuinely think. I don't 0:02:39.560 --> 0:02:43.480 want to hear what the politically compliant correct. 0:02:43.160 --> 0:02:44.239 Right, you have to come down. 0:02:44.720 --> 0:02:46.960 Okay, that's the answer I'm looking for. I mean, obviously 0:02:46.960 --> 0:02:48.360 we're not holding you accountable to that. 0:02:48.480 --> 0:02:51.799 Obviously, no, no, And there's many factors that contribute to 0:02:51.840 --> 0:02:54.480 the decisions RBA make around that. But if you look 0:02:54.520 --> 0:02:56.880 at all of the conditions, we've had the most interest 0:02:56.919 --> 0:03:01.160 rate rises over eighteen months in a long period of time. 0:03:02.520 --> 0:03:08.679 People are struggling, the cost of living is extremely high, 0:03:08.880 --> 0:03:12.160 inflation is coming down. It's been a bit stubborn over 0:03:12.160 --> 0:03:15.560 the last you know, maybe four months, but in the 0:03:15.600 --> 0:03:18.080 whole it's been improving. We had I think there was 0:03:18.120 --> 0:03:22.680 the January, the quarterly or the March quarterly. CPI figures 0:03:22.680 --> 0:03:25.680 were a bit stubborn, but that can happen from quarter 0:03:25.720 --> 0:03:28.320 to quarter. They change and fluctuate a bit. But I 0:03:28.360 --> 0:03:31.600 think in the whole, all the conditions are pointing to 0:03:31.680 --> 0:03:33.919 some rate cuts are needed, and I think by the 0:03:34.000 --> 0:03:36.240 end of the years when we should see that. 0:03:36.480 --> 0:03:39.120 So we still have to keep waiting Look, it. 0:03:39.200 --> 0:03:41.600 Was hopeful to be sooner than that, and I still 0:03:41.640 --> 0:03:43.480 wouldn't rule it out because you look, you look at 0:03:43.520 --> 0:03:46.760 the GDP figures, which I think most recently was point one, 0:03:47.080 --> 0:03:49.920 and that's on the back of immigration. Really otherwise we're 0:03:49.920 --> 0:03:52.840 in a recession essentially. Well, I think it's fair to 0:03:52.880 --> 0:03:56.320 say so. Unemployment is a part of that as well. 0:03:57.280 --> 0:03:59.920 So yeah, look, watch, watch and wait with the other 0:04:00.720 --> 0:04:02.560 see what they do. I just I just don't think 0:04:02.560 --> 0:04:04.800 it's responsible for them to increase again. 0:04:05.280 --> 0:04:08.560 Is not sustainable anymore. I mean, people are really living 0:04:08.560 --> 0:04:10.440 off the scent of an oily rag and now starting 0:04:10.480 --> 0:04:13.640 to go backwards, and the financial stress and the cost 0:04:13.680 --> 0:04:16.279 of people's mental health and the burnout. I think that 0:04:16.320 --> 0:04:19.159 we are now potentially staring down the barrel of like 0:04:19.680 --> 0:04:23.720 nine hundred and seventy four thousand Australians now have a 0:04:23.800 --> 0:04:27.880 second or a third job just to get by, right. 0:04:27.760 --> 0:04:30.520 That's incredible. Yeah, Look, it's proven to be a blunt 0:04:30.600 --> 0:04:33.039 instrument the interest rate rises, you know, so many of 0:04:33.080 --> 0:04:34.880 them are, and it's taken so long to get the 0:04:34.960 --> 0:04:38.320 inflation on the downward trend. Putting them up again, I 0:04:38.360 --> 0:04:41.240 just don't see what that will achieve. Yeah, I think 0:04:41.240 --> 0:04:44.840 it's more about patience and making some responsible decisions around 0:04:45.000 --> 0:04:45.920 the case rate. 0:04:45.960 --> 0:04:47.720 I'm going to ask you a question which I didn't 0:04:47.760 --> 0:04:50.039 tell you I wanted to ask, but I'm interested to 0:04:50.080 --> 0:04:54.240 know if you can explain this. Why are interest rates 0:04:54.400 --> 0:04:57.159 always directed by inflation? 0:04:57.680 --> 0:05:00.560 Well? This is beyond my years. You know, I've been 0:05:00.560 --> 0:05:04.840 a broker for twenty two years and from my knowledge understanding, 0:05:05.000 --> 0:05:08.080 the target inflation rate band of two to three percent 0:05:08.200 --> 0:05:11.640 came from New Zealand, I've heard a long time ago. 0:05:11.839 --> 0:05:13.440 So the number was plucked out of thin air. 0:05:14.120 --> 0:05:16.719 Isn't that sad that we're placing so many people under 0:05:16.800 --> 0:05:21.560 unnecessary financial pressure on this like ambiguous, like they like 0:05:21.760 --> 0:05:24.960 floating number that really doesn't actually mean anything or actually 0:05:25.000 --> 0:05:27.360 offer anything that's relevant or accurate necessarily. 0:05:27.520 --> 0:05:30.440 Well, the difficulty is that, you know, the inflation and 0:05:30.480 --> 0:05:34.440 the interest rate of the cash rate increases are impacting 0:05:35.000 --> 0:05:37.360 a small percentage or a small percentage, but not the 0:05:37.360 --> 0:05:41.040 whole of the population. It's mortgage holders. So yeah, I 0:05:41.080 --> 0:05:44.200 think that and the government have probably shown their hands 0:05:44.240 --> 0:05:48.040 a been in regards to the RBA meetings and making 0:05:48.080 --> 0:05:51.000 some changes around that. Things need to change. We can't 0:05:51.000 --> 0:05:55.320 just keep managing it and dictating the cash rate by 0:05:55.320 --> 0:05:57.320 the same measures that we have in the past, because 0:05:57.360 --> 0:06:01.880 times are changing. You know, you mentioned how many people 0:06:01.880 --> 0:06:02.320 have three. 0:06:02.240 --> 0:06:03.880 Jobs now nine hundred and seventy four. 0:06:05.240 --> 0:06:09.320 Yeah, so the unemployment figures don't accurately reflect that. I 0:06:09.320 --> 0:06:10.080 don't believe you. 0:06:10.000 --> 0:06:12.800 Don't look, that's awed, like you know, there's just six 0:06:12.839 --> 0:06:16.480 and damn lies. And actually forty eight percent of Australians 0:06:16.640 --> 0:06:20.440 are considering, well seriously considering taking up a second job 0:06:20.720 --> 0:06:23.440 in the next six months. Like, so it's this is 0:06:23.480 --> 0:06:25.480 a trend that's here to stay. What do we need 0:06:25.520 --> 0:06:28.800 to know right now about interest rates and our mortgage 0:06:29.000 --> 0:06:31.160 probably more so our mortgage, Like what's a good rate 0:06:31.240 --> 0:06:33.720 right now? What are people doing? What are you seeing 0:06:33.720 --> 0:06:35.160 people use effectively? 0:06:35.640 --> 0:06:37.279 A good rate at the moment? Is still that from 0:06:37.279 --> 0:06:41.920 that six percent to low sixs. You can't can't actively 0:06:41.960 --> 0:06:44.719 constantly chase the best rate on the market all the time. 0:06:44.920 --> 0:06:47.600 So if you're in that band, that's good, and then 0:06:47.640 --> 0:06:50.279 over time you'd like to keep sharpening that, getting closer 0:06:50.279 --> 0:06:52.839 and closer to the best in the market. But you know, 0:06:52.880 --> 0:06:55.920 we're looking at fixed rates at the moment. Some banks 0:06:56.080 --> 0:06:58.600 are providing or some lenders are providing some good one 0:06:58.680 --> 0:07:00.320 YW rates, so that's something you can. 0:07:01.080 --> 0:07:03.919 What it's a good rate fixed one mid to. 0:07:03.960 --> 0:07:07.320 High fives, No way, I've seen a few of those. 0:07:07.560 --> 0:07:10.200 But then you've got other lenders who are high sixers, so. 0:07:10.240 --> 0:07:13.320 It is quite a big a gap there is to 0:07:13.360 --> 0:07:15.200 shop aroundtage to help you. 0:07:16.400 --> 0:07:21.120 But those those fixed rates can be manipulated around, you know, 0:07:21.800 --> 0:07:25.280 the bank or lender's appetite for market share. Really, so 0:07:26.080 --> 0:07:28.400 those who have a high fixed rate are basically saying, 0:07:28.760 --> 0:07:30.480 you know, we're not touching this market at the moment, 0:07:30.480 --> 0:07:34.280 we're happy with our market share, stay away. Whereas whereas 0:07:34.440 --> 0:07:36.840 the lenders who are providing a lower fix rate, it's 0:07:36.880 --> 0:07:40.000 another reason to join them. So it means that it 0:07:40.040 --> 0:07:45.080 gives you some flexibility and takes the pressure off cash flow. 0:07:45.720 --> 0:07:47.120 That might be something to consider. 0:07:48.160 --> 0:07:50.200 Well, what would you recommend then for people right now 0:07:50.280 --> 0:07:54.720 who are terrified of future interest rate rises and don't 0:07:54.760 --> 0:07:56.920 trust the RBA and the government. 0:07:56.920 --> 0:07:57.960 What's there sort of saying is. 0:07:57.920 --> 0:07:59.880 Potential stop reading the news. 0:08:00.360 --> 0:08:03.080 Exactly, but it means should people if they're worried, they 0:08:03.240 --> 0:08:05.360 consider fixing part of their loan, Like, what are you 0:08:05.440 --> 0:08:07.480 recommending to people you're saying no, we're probably looking at 0:08:07.480 --> 0:08:09.920 interest rate cuts, like hang in there, you know, and 0:08:09.960 --> 0:08:12.400 then we can relook at, you know, revisit the idea 0:08:12.400 --> 0:08:14.840 of fixing some rates. If you're still concerned, like what 0:08:14.880 --> 0:08:16.760 are your what are your thoughts around this? 0:08:17.040 --> 0:08:18.800 It's my opinion rates will come down. It's just a 0:08:18.800 --> 0:08:21.400 matter of time. So I think with that the best 0:08:21.920 --> 0:08:23.440 the best thing that you could do as a mortgage 0:08:23.440 --> 0:08:25.640 holder is check with your lender what their available fixed 0:08:25.680 --> 0:08:28.200 rates are. If they've got a one year rate that 0:08:28.360 --> 0:08:33.600 is really considerably lower than your current variable, then look 0:08:33.640 --> 0:08:35.760 at fixing part of it because it can help you 0:08:35.800 --> 0:08:37.560 take to take some pressure off in in terms of 0:08:37.559 --> 0:08:40.640 cash flow. That's if you've got a bad variable rate, 0:08:40.920 --> 0:08:43.440 and it depends on who your lender is, as I said, 0:08:43.480 --> 0:08:46.760 some of them are their fixed rates are still too high. 0:08:46.920 --> 0:08:50.040 But that's that's about as good as you could do 0:08:50.120 --> 0:08:54.200 in terms of without leaving your lender or changing Otherwise, 0:08:54.240 --> 0:08:57.320 you're looking at refinancing, taking a better mortgage, better rate 0:08:57.360 --> 0:09:00.480 out could look. Extending your loan term not ideal and 0:09:00.480 --> 0:09:01.440 I wouldn't recommend it. 0:09:01.600 --> 0:09:03.160 No, please don't know that, listeners. 0:09:03.679 --> 0:09:05.480 But at the same time we've got to be mindful 0:09:05.520 --> 0:09:07.080 that some families are really struggling. 0:09:07.280 --> 0:09:09.280 Of course, I mean, if it's the last resort, it 0:09:09.360 --> 0:09:11.760 is the last resort that means you can stay continue 0:09:11.800 --> 0:09:12.840 on living in the family home. 0:09:12.880 --> 0:09:18.400 Of course, we're hearing of families skipping meals, kids going 0:09:18.400 --> 0:09:21.280 to put all or the parents are giving meals to 0:09:21.280 --> 0:09:23.760 be able to feed their kids. You're in that situation, 0:09:24.080 --> 0:09:26.880 then extending a term isn't the worst thing in the 0:09:26.880 --> 0:09:28.960 world exactly. You know you can catch back up in 0:09:29.000 --> 0:09:32.000 future when things get better, of course, So they're some 0:09:32.040 --> 0:09:33.240 of the options that you've got. 0:09:33.640 --> 0:09:35.679 Great wise advice. Thank you, Adam. All right. 0:09:35.760 --> 0:09:39.040 On that topic of asking for discounts, how often can 0:09:39.080 --> 0:09:41.160 you call your bank and ask for a discount or 0:09:41.200 --> 0:09:41.720 a better deal? 0:09:41.760 --> 0:09:41.840 Like? 0:09:41.920 --> 0:09:44.080 Is it every six months? Is it every month? Like? 0:09:44.400 --> 0:09:47.320 Whose schools have thought one? As often as possible annoy them. 0:09:47.480 --> 0:09:49.800 I like the idea of annoying my bank because I 0:09:49.880 --> 0:09:52.560 get really annoyed seeing the interest that I page month 0:09:52.600 --> 0:09:53.720 on my everyone does. 0:09:53.920 --> 0:09:56.839 Look, it's I think you need to be sensible about it. 0:09:57.480 --> 0:09:58.959 I don't know this for a fact, but I think 0:09:58.960 --> 0:10:01.000 the more that you ask, the less that you'll get 0:10:01.040 --> 0:10:04.120 long term. Really, yes, I wouldn't be more than every 0:10:04.120 --> 0:10:07.160 six to twelve months, you know, once twice a year 0:10:07.160 --> 0:10:10.880 at a push, I think is probably sensible. I think 0:10:11.080 --> 0:10:13.720 the banks in their system somehow probably flag how often 0:10:13.720 --> 0:10:17.320 you're asking a little fun It wouldn't surprise me. I'm 0:10:17.360 --> 0:10:18.199 not saying it's true, but. 0:10:18.720 --> 0:10:21.920 Once twice a year if there's any mortgage not mortgage brocus, 0:10:21.920 --> 0:10:23.280 but if there's anyone who works for the bank, it 0:10:23.320 --> 0:10:25.240 happens to know the answer to happen, Please send me 0:10:25.320 --> 0:10:25.720 a DM. 0:10:25.720 --> 0:10:26.920 I'd be intrigued to know. 0:10:27.480 --> 0:10:30.079 All right, how often then do you ask on behalf 0:10:30.080 --> 0:10:33.600 of your clients for a further discount with the. 0:10:33.520 --> 0:10:38.760 Banks generally speaking, once or twice a year, unless circumstances change, 0:10:38.800 --> 0:10:42.839 such as lower loader value ratio with reducing debt or 0:10:42.880 --> 0:10:46.400 selling property, things like that. When things change, we can 0:10:46.559 --> 0:10:48.920 ask again because of those changes, and it puts you 0:10:48.960 --> 0:10:52.880 in a different pricing interest rate bracket. We will Otherwise 0:10:54.040 --> 0:10:58.920 we're using some AI technology that track our clients interest rates. Wow, 0:10:58.960 --> 0:11:02.000 and then as the as the rate balloons out of 0:11:02.679 --> 0:11:07.480 a competitive band, then the software will trigger a request 0:11:07.480 --> 0:11:09.520 to the bank to ask for a better rate. 0:11:09.760 --> 0:11:10.400 That's brilliant. 0:11:10.720 --> 0:11:11.400 It's fantastic. 0:11:11.480 --> 0:11:14.200 Is that something that you guys do that's quite unique. 0:11:15.480 --> 0:11:18.080 I wouldn't say unique. I think more and more brokers 0:11:18.200 --> 0:11:21.680 are starting to use it because it's a really good 0:11:21.720 --> 0:11:26.359 service and it's a part of looking after your customers. 0:11:27.120 --> 0:11:30.240 So but on the whole it's not. I don't think 0:11:30.320 --> 0:11:32.920 it's widely used, but definitely more and more. 0:11:33.440 --> 0:11:35.920 I definitely want AI helping me pay off you. 0:11:36.520 --> 0:11:39.040 So look, we love it, Our clients love it. The 0:11:39.080 --> 0:11:43.320 communication updates around the monthly save monthly or annual savings, 0:11:43.360 --> 0:11:46.480 when we're getting those rates passed on communicated out three miles. 0:11:47.120 --> 0:11:51.400 Everyone loves it. So why wouldn't we use it? All? Right? 0:11:51.440 --> 0:11:53.280 The other day I saw something in the media and 0:11:53.360 --> 0:11:56.440 it was about a z bank having these low risk 0:11:56.480 --> 0:12:00.520 mortgages in affluent areas that can borrow with as little 0:12:00.600 --> 0:12:05.520 as five percent deposit? Is this true or is it 0:12:05.640 --> 0:12:07.880 too good to be true and there are some nasty 0:12:07.920 --> 0:12:08.840 strings attached? 0:12:10.000 --> 0:12:10.840 Yeah, it's true. 0:12:11.400 --> 0:12:13.240 Really, it's more. 0:12:14.960 --> 0:12:16.880 I understand it in a bit of a trial phase, 0:12:17.240 --> 0:12:20.080 but there are some catches. You know, it's a minimum 0:12:20.440 --> 0:12:23.880 minimum own size of two million, so then you're looking 0:12:23.920 --> 0:12:26.200 at I think you know your income to support that 0:12:26.240 --> 0:12:29.200 would be up around the five hundred thousand mark, So 0:12:29.360 --> 0:12:31.080 they're targeting the wealthy. 0:12:30.760 --> 0:12:32.280 And the top two percent of the coma. 0:12:32.679 --> 0:12:36.160 Yeah, and in those affluent suburbs where the property prices 0:12:36.160 --> 0:12:39.360 are increasing, so the bank's de risking that in that sense, 0:12:39.600 --> 0:12:43.000 they're waiving them Morgane insurance because you know, if it's 0:12:43.040 --> 0:12:46.400 east in suburbs of Sydney, well when did the property 0:12:46.400 --> 0:12:47.720 prices last go down there? 0:12:49.400 --> 0:12:49.640 Wow? 0:12:49.720 --> 0:12:53.120 That seems so unfair that. You know, essentially, if you're 0:12:53.240 --> 0:12:56.679 living in an affluent area, you're getting potentially a cheaper 0:12:56.720 --> 0:12:59.199 interest rate because you're buying borrowing a large amount of money. 0:12:59.559 --> 0:13:02.280 You can get away without having to pay mortgage insurance, 0:13:02.280 --> 0:13:05.240 which is exceptionally expensive and a massive waste of money. 0:13:05.240 --> 0:13:06.840 Price range a little bit a lot. 0:13:07.000 --> 0:13:10.240 Yeah, and like better terms and conditions on your homelane. 0:13:10.840 --> 0:13:12.960 Look, I don't I haven't seen the figures. It wouldn't 0:13:12.960 --> 0:13:14.920 surprise me if the interest rate is inflated. 0:13:15.320 --> 0:13:18.400 Okay, alright, that makes me a little bit better, But. 0:13:18.600 --> 0:13:22.079 I mean it's inflated interest rate, it's not you know, 0:13:22.280 --> 0:13:24.160 how many how many people are going to qualify for this? 0:13:24.480 --> 0:13:27.520 You know, at that two million dollar five and a 0:13:27.559 --> 0:13:30.720 K family income. But at the same time, we may 0:13:30.800 --> 0:13:34.040 end up cutting this out. But you know, they wouldn't 0:13:34.040 --> 0:13:37.120 have got an extamp duty concessions, they'd never be eligible 0:13:37.160 --> 0:13:41.320 for the first home by our grants. Maybe don't put that in. 0:13:41.600 --> 0:13:43.520 No, No, I think it's I think it's really important. 0:13:43.559 --> 0:13:45.840 Okay, Well, maybe I'm being a bit sometimes, maybe I'm 0:13:45.840 --> 0:13:47.320 being a bit pull poppy syndrome. 0:13:47.720 --> 0:13:49.480 And look, at the end of the day, the bank 0:13:50.280 --> 0:13:54.200 are targeting that that they've indicated they want that target market. Yeah, 0:13:54.240 --> 0:13:57.800 they want their business. Maybe it's because they wanted to 0:13:57.920 --> 0:14:03.680 do sell them financial products as well insurances. Yeah, so 0:14:03.720 --> 0:14:06.920 look they can totally and you know, good on, good 0:14:06.920 --> 0:14:10.880 on whoever qualifies for that and saves all that mortgage insurance, 0:14:11.080 --> 0:14:12.520 you know that's off to them. 0:14:13.800 --> 0:14:14.160 All right. 0:14:14.200 --> 0:14:16.360 Well, that then spurs on my next question, and that's 0:14:16.360 --> 0:14:19.080 really back. It's about the inspiration behind like just desperately 0:14:19.120 --> 0:14:22.200 wanting to get into the mortgage market. So for anyone 0:14:22.200 --> 0:14:25.800 who has say a five to ten percent deposit ready 0:14:25.840 --> 0:14:28.600 to go, what are your thoughts of just biting the 0:14:28.600 --> 0:14:31.360 bullet and copying the mortgage insurance to get your foot 0:14:31.400 --> 0:14:34.280 in the door at least and then work to head 0:14:34.280 --> 0:14:36.520 down bar and try and pay the mortgage rop as 0:14:36.600 --> 0:14:38.480 quickly as possible or as much as you possibly can, 0:14:38.520 --> 0:14:41.040 so that that LVR drops and then you go back 0:14:41.040 --> 0:14:42.800 to the bank and go, hey, I've knocked off you know, 0:14:42.960 --> 0:14:45.040 X amount of dollars off my homelann and my property's 0:14:45.040 --> 0:14:47.320 gone up by this much. Can I, you know, look 0:14:47.360 --> 0:14:50.440 at refinancing and potentially get a refund on my mortgage insurance? 0:14:50.480 --> 0:14:52.240 Is that something that I know people have done in 0:14:52.240 --> 0:14:54.320 the past. Is that something people can do? And do 0:14:54.360 --> 0:14:57.680 you actually think it's a worthy strategy considering? 0:14:58.120 --> 0:15:01.120 Yes, I think and I've always had this view that 0:15:01.200 --> 0:15:03.920 mortgage insurance some time time is just a necessary evil. 0:15:04.200 --> 0:15:06.680 You know, it's an opportunity cost, and you've got to 0:15:06.680 --> 0:15:09.080 weigh it up. So, if you don't want to pay 0:15:09.120 --> 0:15:11.800 mortgage insurance, how much longer is it going to take 0:15:11.800 --> 0:15:14.960 you to save that extra fifteen percent in that period? 0:15:14.960 --> 0:15:18.400 If it's three years in that period, what did you 0:15:18.480 --> 0:15:20.080 forego in properly growth? 0:15:20.320 --> 0:15:23.000 Yeah, And that's the thing is we can't save as 0:15:23.040 --> 0:15:26.240 fast as what the property market's doing, and it doesn't 0:15:26.280 --> 0:15:29.680 look like it's slowing down anytime soon. So unfortunately, as 0:15:29.720 --> 0:15:31.680 you said it, you have to sort of accept what 0:15:31.720 --> 0:15:32.000 it is. 0:15:32.120 --> 0:15:35.360 I think, get in. Yeah, get in, because as as 0:15:35.400 --> 0:15:38.520 you wait and try and save more to avoid mortgage insurance, 0:15:38.560 --> 0:15:40.800 the property market so the price range that you're looking 0:15:40.880 --> 0:15:44.840 at today could be two hundred thousand dollars more in 0:15:44.880 --> 0:15:50.160 three years time, you know, would you then fifteen percent 0:15:50.200 --> 0:15:51.920 target extra that you had wouldn't be enough. 0:15:51.960 --> 0:15:54.400 You'd need more again, Yeah, just chasing your tail. 0:15:54.520 --> 0:15:56.800 Yeah yeah, And as you said, the property market's a 0:15:56.800 --> 0:15:59.120 bit of a speeding train, and you know, so just 0:15:59.200 --> 0:16:01.480 jump on board. I think if you can, if you 0:16:01.520 --> 0:16:04.640 can get in secure the place that you desire, you 0:16:04.680 --> 0:16:07.800 and your family, and you're aware of the mortgage insurance 0:16:07.800 --> 0:16:10.640 costs and you pick it up, you get your house, 0:16:11.600 --> 0:16:13.920 move on, as you said, target paying it off as 0:16:13.960 --> 0:16:15.760 quickly as you can, all right. 0:16:15.760 --> 0:16:17.760 That then then leads me to my next question for 0:16:17.920 --> 0:16:19.720 first home owners that just want to get in the market. 0:16:20.160 --> 0:16:23.280 Are people really using this super Safest scheme? Or is 0:16:23.280 --> 0:16:25.800 it just like a bit of a hoken offering from 0:16:25.840 --> 0:16:27.520 the government knowing that really going to use it but 0:16:27.520 --> 0:16:28.440 it makes them look good. 0:16:28.640 --> 0:16:31.200 No, it's good. I've had a number of clients that 0:16:31.240 --> 0:16:36.040 are using it. Really, you get tax savings as you contribute, 0:16:36.200 --> 0:16:38.160 so I think it's fifteen thousand per year. You can 0:16:38.160 --> 0:16:44.920 contribute per applicant, per borrower, and then you can draw 0:16:45.240 --> 0:16:47.440 I think it's fifty up to fifty thousand and eight 0:16:48.480 --> 0:16:50.960 at the end of it when you're ready to. 0:16:50.960 --> 0:16:53.920 Buy, So potentially you get one hundred thousand dollars deposit 0:16:54.960 --> 0:16:55.640 tax free. 0:16:56.200 --> 0:16:56.520 Wow. 0:16:56.840 --> 0:16:59.480 But it's got to be used for purchasing a home, correct, 0:16:59.560 --> 0:17:01.640 and a home that you move into, correct, not an 0:17:01.680 --> 0:17:02.360 investment property. 0:17:02.400 --> 0:17:03.040 No, that's right. 0:17:03.600 --> 0:17:05.760 Are there any other terms and conditions that people need 0:17:05.800 --> 0:17:06.320 to be aware of? 0:17:06.680 --> 0:17:09.480 You can also at the time that you're buying, you 0:17:09.480 --> 0:17:12.520 can also withdraw the earnings of those funds that you're 0:17:12.520 --> 0:17:15.480 deposited into SUPER. So you know, if it was in 0:17:15.520 --> 0:17:18.120 an interest bearing account at ten percent, you can take 0:17:18.160 --> 0:17:19.520 that back out. Why buy? 0:17:21.080 --> 0:17:23.199 And is there do you need to see a mortgage 0:17:23.200 --> 0:17:25.639 broker that actually specializes in this or do most mortgage 0:17:25.640 --> 0:17:26.240 brokers do this? 0:17:26.920 --> 0:17:30.560 Oh? Look, it's not a mortgage broker, not a mortgage 0:17:30.560 --> 0:17:34.680 broker product or you know basically basically via your accountant 0:17:34.720 --> 0:17:36.760 that you need to do that or through your super 0:17:36.760 --> 0:17:40.320 fun your contributions, and then when you're ready to buy, 0:17:40.359 --> 0:17:43.160 it's called a determination, So you apply through your super 0:17:43.160 --> 0:17:45.200 fund or the ATO to get that fund those funds 0:17:45.200 --> 0:17:47.960 released and go, wow. 0:17:47.960 --> 0:17:51.199 Okay, definitely something that's worth considering. But obviously you've got 0:17:51.240 --> 0:17:52.879 to be so careful then of the damage done to 0:17:52.920 --> 0:17:55.639 your superannuation. You know, you've got to make sure that 0:17:55.640 --> 0:17:57.840 you try and rebuild it back up again so that 0:17:57.920 --> 0:17:59.720 you can eventually one day retire. But at least, as 0:17:59.720 --> 0:18:00.879 you said, you've got your foot in the door of 0:18:00.880 --> 0:18:01.160 the market. 0:18:01.240 --> 0:18:04.119 Yeah, but you're putting those in as it's part of 0:18:04.160 --> 0:18:07.480 your savings for your deposit, so and it's a traducing attack, 0:18:07.560 --> 0:18:09.200 so you can either have your you know, if you've 0:18:09.240 --> 0:18:12.280 got thousand in your savings account that you're holding for property, 0:18:12.320 --> 0:18:14.600 you can start putting that into your super as a 0:18:14.640 --> 0:18:18.240 way of saving on tax and building up a bigger deposit. 0:18:18.840 --> 0:18:21.000 I guess it also helps remove temptation to spend it. 0:18:21.040 --> 0:18:23.480 And belood that's true too, which is you know, a 0:18:23.480 --> 0:18:26.040 lot of people is a big risk. 0:18:26.840 --> 0:18:28.679 All right, Is there anything else we need to know 0:18:28.880 --> 0:18:31.119 for first home buyers right now to help them get. 0:18:30.960 --> 0:18:31.760 Into the market. 0:18:32.119 --> 0:18:36.000 Really, Look, there's there's one lender policy and product that 0:18:36.040 --> 0:18:40.199 I really like for first time buyers, which is the 0:18:40.280 --> 0:18:42.800 genuine savings rules. So if you don't have genuine savings 0:18:42.880 --> 0:18:45.199 normally either three or five percent, you need to have 0:18:45.240 --> 0:18:49.000 genuine savings up to the purchase price for that three 0:18:49.080 --> 0:18:50.920 or five percent, and you need to have it in 0:18:50.920 --> 0:18:53.359 your account for at least six months if you don't. 0:18:53.440 --> 0:18:56.040 If you don't have that genuine savings for six months, 0:18:56.400 --> 0:18:58.679 there are ways that you can get around it, which is, 0:18:58.720 --> 0:19:01.160 if you're a tenant and you've got a registered lease 0:19:01.359 --> 0:19:03.640 with an agent and you can verify that you've been 0:19:03.640 --> 0:19:06.440 paying your rent on time for six months, you get 0:19:06.480 --> 0:19:10.720