It’s been super easy to secure a home loan over the past 12 months or so.  Meagre interest rates, first homebuyer schemes, and looser lending standards have made mortgage applications a breeze.

But it seems that, once again, all good things must come to an end.

Not only has record home buying pushed property prices to new (and rather unaffordable) heights, it’s also resulted in whopping debts across the country. Mortgage holders will cruelly face the music as they realise what they’ve done.

ABC points out that the total value of monthly home loan approvals jumped by more than two thirds over the past year.  And that’s not even taking into consideration the refinancing of existing loans.

So, the Reserve Bank thought it was high time they stepped in to bring things back into balance.  Meetings between the RBA, the treasurer, and the Council of Financial Regulators are already in play.

The expectation is that APRA will crack down on debt-to-income ratios.  So, applying for a loan any greater than six times your household income does not bode well.  And limitations will be placed on low-deposit home loans to prevent further crippling household debt.

 

You may be thinking – surely booming property prices is fantastic news for homeowners.

 

Well, yes and no.  The simple fact is, the higher the price, the greater the mortgage.  Especially with a lower deposit.  That means there’s still an eye-watering sum to be paid eventually.  Of course, low interest rates and interest-only repayments will help in the short term.  But when rates rise and the principal loan payments kick in, mortgagees are in for a rude financial shock.

So, where does that leave you if you (a) have an existing mortgage or (b) want to enter the market?  You’re either struggling to pay your loan or labouring to find something you can afford.

That’s where we come in.  We created a unique strategy specifically with you in mind.

Come and have a chat with one of our consultants today.  You’ll be back on that financial horse in no time.