We looked at why property investment could be fantastic in 2016, but what about the conditions for actually securing a mortgage to buy a home?
We’ve just had a look at what could make this year great for investing in your future through property, but it’s important to look at specific aspects of that kind of planning as well. We’re talking in particular about getting a home loan.
For many Australians, it’s a fundamental part of buying a property and financial planning for the future, but does everyone know what they need to about getting one, and why this year could be fantastic for it? Let’s delve into the details.
It’s likely to keep growing
Research organisation Deloitte recently unveiled its report into lending in Australia, noting that mortgage origination is likely to grow between 6 and 10 per cent across 2016. That follows 20 per cent growth in loan settlements across 2015, and the stunning figure that home loans are now worth $1.4 trillion dollars in Australia.
While this seems like a lot, it’s also a sign of strength and confidence in the market. James Sheffield, the General Manager for Proprietary Lending Support and Mobile Lending at the Commonwealth Bank thinks growth will be slowing down in the coming year. However, the expected ongoing increase in loan origination shows that many people can still experience gains through borrowing.
It’s all the more reason to contact a mortgage broker and discuss those future home loan plans!
Interest rates are still low
As Tim Lawless from RP Data noted in a February release, interest rates are at lows not seen in nearly 50 years. But are they going to stay? At the last meeting of the Reserve Bank of Australia (RBA), the official cash rate was held at the record low level of 2.25 per cent, which suggests interest on home loans will continue to stay put for now.
In his closing comments about the cash rate, RBA Governor Glenn Stevens noted that to maintain current inflation levels and foster growth in the Australian economy, it might actually be necessary to ease back the cash rate further down the line.
So clearly, there are provisions for even lower interest rates, which will be enticing for anyone currently thinking about buying a home. If you live in the Whitsundays and are looking eagerly toward your future, taking out a home loan and planning a property investment should be on your agenda.
For more information about how to take advantage of these great home loan conditions, speak to your local mortgage broker or financial planner today!
