http://www.smh.com.au/articles/2004/05/05/1083635173415.html
Cheers,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Thanks Simon for posting that
It was pretty obvious they weren’t gonna change this month. time for us to start panicking about june now kay henry
Panicking?
0.25% on an average $100K loan would equate to about an extra $5 per week, if I have done my homework correctly.
If people feel “shaky” over an extra $5, then they really need to review their spending!!
Jo
Yawn
hehe Monopoly
If you read some of my other posts on being an investor, you’d probably know that my post was slightly ironic. I am not hugely phased by any of the taxation or IR rate changes we all have to face. It’s just all part of the landscape of being an investor.
Having said that- who only owes 100k? If you imagine a 1% IR increase (we’ve just had that) and your mortgage is 300k, then that’s $60 a week rise in repayments. It does all add up
kay henry
Originally posted by kay henry:I am not hugely phased by any of the taxation or IR rate changes we all have to face. It’s just all part of the landscape of being an investor.
Having said that- who only owes 100k? If you imagine a 1% IR increase (we’ve just had that) and your mortgage is 300k, then that’s $60 a week rise in repayments. It does all add up
kay henry
Kay Henry,
I was not specifically referring to you being nervous, rather making a sweeping/generalised statement across the board. As an investor, every dollar counts, however a confident investor (one of which I believe you are, judging my the type of comments you post) is not normally bothered too much in an increase of this size; although I am sure any increase is not welcomed with open arms…hey, money is money, and even one dollar more is a dollar less to spend on the next property!!! LOL
Having said that, not too many people only owe 100K (unless you are buying cheapies i.e. 20, 30K properties as are some people in here) then maybe they will only have this amount owing. However, on the average 300K mortgage – 60pcm is not a huge change, and if anyone says it is, THEY need to adjust their lifestyles.
I myself, are continually overwhelmed by people’s horror when the mention of a rise is even hinted at….for heaven’s sake….surely this is something that one would expect when borrowing large sums of money!!! If people borrow large sums when mortgaging, and they calculate so tightly as to be fearful of a 0.25% rise, they need to re-evaluate before they put pen to paper!!!!
BTW on 300K the 0.25% is $60 per month, not per week (I figured it was just a typo) LOL
Jo
The avarage house in Syd is $400K, so the repayments would add an extra $100 p/m. But for most people that isn’t where the majortiy of the interest rates hit. Rather it is personal loans and credit cards, because tha banks increase their margins higer than the rate rise, so cards can go from 16.5% to 17.25% even with a tiny 0.25% rate rise.
Also our high eco. growth has a high correlation with high spending. If interest rates rise people mentally might reduce the amount they are willing to spend. This place a contraction in the economy, and reduce our eco. growth.
Rgds.
Lucifer_auLucifer_au,
Excuse my ignorance here, but are you saying then, that in the name of healthy economic growth, people should continue to spend BIG, even beyond their means, just so that we can all benefit from them putting themselves deeper into the poo poos????
Haven’t your heard, the average credit card debt alone in this country is enough to cripple an entire nation!!!!
I understand the effect reduced spending will have on our economy, but what other choices do people have when rises squeeze them into having to make budget cuts?????
Jo
No I’m not. All I’m saying is that high consumer spending has, for a large part, fueled high growth. You wanted to know why the media places such a large emphasis on interest rates, and I told you a very likely reason.
Wether debt is “good” or “bad”, from an economic point of view is irrelevant. It’s just a factor in the economy – one that can lead to higher economic growth and one that can constrain economic growth depending on the economic cycle.
As for people digging them selves into debt – unfortantly it’s not my problem. I cannot fix the laws to outlaw credit cards, but nor would I want too. Because without debt instruments I wouldn’t control a portfolio of this size, without debt. Yes credit is dangerous when used unwisely, but in the end I wouldn’t be where I am today without it.
Rgds.
Lucifer_auOriginally posted by Lucifer_au:Because without debt instruments I wouldn’t control a portfolio of this size, without debt. Yes credit is dangerous when used unwisely, but in the end I wouldn’t be where I am today without it.
I know what you meant, I guess I thought you were arguing that it was a good thing. I know now, that that is not what you were saying, but that you appreciate the fact that it has helped put you in the position you are in today. I cannot (and would not) dispute this, as I too, have a healthy portfolio as a result of such debt instruments.
Cheers,
JO
It was pretty obvious they weren’t gonna change this month. time for us to start panicking about june now 
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