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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

What are the features of home loans for expats from Westpac?

If you’re an Australian citizen living and working abroad, you can borrow to buy a property in Australia. With a Westpac non-resident home loan, you can borrow up to 80 per cent of the property value to purchase a property whilst living overseas. The minimum loan amount for these loans is $25,000, with a maximum loan term of 30 years.

The interest rates and other fees for Westpac non-resident home loans are the same as regular home loans offered to borrowers living in Australia. You’ll have to submit proof of income, six-month bank statements, an employment letter, and your last two payslips. You may also be required to submit a copy of your passport and visa that shows you’re allowed to live and work abroad.

When does Commonwealth Bank charge an early exit fee?

When you take out a fixed interest home loan with the Commonwealth Bank, you’re able to lock the interest for a particular period. If the rates change during this period, your repayments remain unchanged. If you break the loan during the fixed interest period, you’ll have to pay the Commonwealth Bank home loan early exit fee and an administrative fee.

The Early Repayment Adjustment (ERA) and Administrative fees are applicable in the following instances:

  • If you switch your loan from fixed interest to variable rate
  • When you apply for a top-up home loan
  • If you repay over and above the annual threshold limit, which is $10,000 per year during the fixed interest period
  • When you prepay the entire outstanding loan balance before the end of the fixed interest duration.

The fee calculation depends on the interest rates, the amount you’ve repaid and the loan size. You can contact the lender to understand more about what you may have to pay. 

Why was Real Time Ratings developed?

Real Time RatingsTM was developed to save people time and money. A home loan is one of the biggest financial decisions you will ever make – and one of the most complicated. Real Time RatingsTM is designed to help you find the right loan. Until now, there has been no place borrowers can benchmark the latest rates and offers when they hit the market. Rates change all the time now and new offers hit the market almost daily, we saw the need for a way to compare these new deals against the rest of the market and make a more informed decision.

What are the different types of home loan interest rates?

A home loan interest rate is used to calculate how much you’ll pay the lender, usually annually, above the amount you borrow. It’s what the lenders charge you for them lending you money and will impact the total amount you’ll pay over the life of your home loan. 

Having understood what are home loan rates in general, here are the two types you usually have with a home loan:

Fixed rates

These interest rates remain constant for a specific period and are a good option if you’re a first-time buyer or if you’re looking for a fixed monthly repayment. One possible downside of a fixed rate is that it may be higher than a variable rate. Also, you don’t benefit from any lowering of interest rates in the market. On the flip side, if rates go up, your rate won’t change, possibly saving you money.

Variable rates

With variable interest rates, the lender can change them at any time. This change can be based on economic conditions or other reasons. Changes in interest rates could be beneficial if your monthly repayment decreases but can be a problem if it increases. Variable interest rates offer several other benefits often not available with fixed rate home loans like redraw and offset facilities and free extra repayments.