Is now a good time to buy?

Is it ever a good time to buy?

If you’re considering buying a property, chances are you’ve asked yourself, “Is this a good time to buy?” Just as likely, friends and family have volunteered advice on whether now is a good time to buy, or whether you should wait until it is a good time to buy.

But is it ever a good time to buy?

This week interest rates have fallen below the 4 percent mark, with fixed rates starting at 3.99 percent. On top of this, experts put the odds at 95 percent for a Reserve Bank cash rate cut tomorrow.

So, does that mean now is a good time to buy? The only person who can decide if it is ever a good time to buy is you, according to property experts.

“When you’ve got the money, you buy,” says Mary Anne Cronin, a real estate agent with Raine & Horne Bondi Beach in Sydney. “You can second-guess the market all you like, but ultimately it comes down to you. You can wait until Spring when there are more properties, but you may miss that gem that came on the market in Winter and got snapped up by someone else.”

REIA president Peter Bushby shares a similar view. “Every home buyer should weigh their own pros and cons to answer the question ‘is it a good time to buy?’,” he says.

“Ultimately, it is down to what you can afford, where you would like to live and what type of property suits your needs best. You do not buy the whole market, so the characteristics of the property as well as your current financial situation are what need to be considered.”

Bushby sounds a word of caution to buyers encouraged by falling interest rates to jump onto the property ladder. “While taking current interest rates into account, home buyers should remember that interest rates fluctuate in the long-term, causing mortgage repayments to vary – sometimes significantly.”

In summary, if you have a decent-sized deposit and can afford the mortgage repayments, now and in the event of interest rate rises, then it’s a good time to buy. The secret to buying is to be prepared and do your homework. So just as you would shop around for your dream home, spend some time comparing home loans using a site like RateCity.

“Instead of trying to second-guess the market, take a long-term approach to buying your home or investing in property,” Bushby advises.

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Learn more about home loans

Why should you trust Real Time Ratings?

Real Time Ratings™ was conceived by a team of data experts who have been analysing trends and behaviour in the home loan market for more than a decade. It was designed purely to meet the evolving needs of home loan customers who wish to merge low cost with flexible features quickly. We believe it fills a glaring gap in the market by frequently re-rating loan products based on the changes lenders make daily.

Real Time Ratings™ is a new idea and will change over time to match the frequently-evolving demands of the market. Some things won’t change though – it will always rate all relevent products in our database and will not be influenced by advertising.

If you have any feedback about Real Time Ratings™, please get in touch.

What is bridging finance?

A loan of shorter duration taken to buy a new property before a borrower sells an existing property, usually taken to cover the financial gap that occurs while buying a new property without first selling an older one.

Usually, these loans have higher interest rates and a shorter repayment duration.

Does Real Time Ratings' work for people who already have a home loan?

Yes. If you already have a mortgage you can use Real Time RatingsTM to compare your loan against the rest of the market. And if your rate changes, you can come back and check whether your loan is still competitive. If it isn’t, you’ll get the ammunition you need to negotiate a rate cut with your lender, or the resources to help you switch to a better lender.

What is a building in course of erection loan?

Also known as a construction home loan, a building in course of erection (BICOE) loan loan allows you to draw down funds as a building project advances in order to pay the builders. This option is available on selected variable rate loans.

Why is it important to get the most up-to-date information?

The mortgage market changes constantly. Every week, new products get launched and existing products get tweaked. Yet many ratings and awards systems rank products annually or biannually.

We update our product data as soon as possible when lenders make changes, so if a bank hikes its interest rates or changes its product, the system will quickly re-evaluate it.

Nobody wants to read a weather forecast that is six months old, and the same is true for home loan comparisons.

Remaining loan term

The length of time it will take to pay off your current home loan, based on the currently-entered mortgage balance, monthly repayment and interest rate.

How common are low-deposit home loans?

Low-deposit home loans aren’t as common as they once were, because they’re regarded as relatively risky and the banking regulator (APRA) is trying to reduce risk from the mortgage market.

However, if you do your research, you’ll find there is still a fairly wide selection of banks, credit unions and non-bank lenders that offers low-deposit home loans.

Mortgage Calculator, Deposit

The proportion you have already saved to go towards your home. 

What is appraised value?

An estimation of a property’s value before beginning the mortgage approval process. An appraiser (or valuer) is an expert who estimates the value of a property. The lender generally selects the appraiser or valuer before sanctioning the loan.

Mortgage Calculator, Loan Term

How long you wish to take to pay off your loan. 

How does a redraw facility work?

A redraw facility attached to your loan allows you to borrow back any additional repayments that you have already paid on your loan. This can be a beneficial feature because, by paying down the principal with additional repayments, you will be charged less interest. However you will still be able to access the extra money when needed.

Does each product always have the same rating?

No, the rating you see depends on a number of factors and can change as you tell us more about your loan profile and preferences. The reasons you may see a different rating:

  • Lenders have made changes. Our ratings show the relative competitiveness of all the products listed at a given time. As the listing change, so do the ratings.
  • You have updated you profile. If you increase your loan amount, the impact of different rates and fees will change which loans are the lowest cost for you.
  • You adjust your preferences. The more you search for flexible loan features, the more importance we assign to the Flexibility Score. You can also adjust your Flexibility Weighting yourself, which will recalculate the ratings with preference given to more flexible loans.

Mortgage Calculator, Repayment Type

Will you pay off the amount you borrowed + interest or just the interest for a period?

Monthly Repayment

Your current monthly home loan repayment. To accurately calculate how much you could save, an accurate payment figure is required. If you are not certain, check your bank statement.