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Mortgage Broker asks, “Who is Still Buying Houses?”

House For SaleMortgage broker says fixed interest rates for housing are rising and it looks like the honeymoon for borrowers is over.

While low interest rates and a shortage of supply of properties are going to remain for quite a while, the entry level market is set to slow significantly as the government restricts the LVR (Loan to Value Ratio). So there is a much greater deposit required, as much as 20% of the purchase price, from October 1.

Some banks have responded by continuing to offer lending in excess of 80% but at an increased interest rate.

So what will that do to the market? It is predicted that the prices of entry-level properties will drop by up to 10% over the next 12 months.

Our mortgage broker advises that those buyers in this market should not be pressured to buy at the higher interest rates offered, paying additional costs when they could put this extra towards savings and purchase the same property 12 months later at a 10% saving of the current asking price, if these predictions come true.

The lesson here is to always look for the opportunity in every apparent negative situation.

If you are looking at buying either your first home or upgrading, call us and make an appointment to discuss the most economical options to suit your requirements.

 

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