Everywhere you look these days, interest rates are very, very low. Lenders are constantly reminding us just how low the rates are with constant advertising. And they are competing hard for your business.
Against this background of record low rates, some doomsayers in the media are now talking up (or down) the property “bubble” story and affordability issues. It can seem like a mixed message at times.
While it’s heartening to see how low current repayments are it’s also important to keep an eye on the future. Rates won’t stay still. They will move around. They always have and they always will. If you have an interest in why this occurs you can listen to all the expert opinions. They will discuss what will happen because of changes to the Australian economy, or world economic conditions or any other situation, political or otherwise that may have a bearing. It can be complicated.
So what does this all mean?
Well, let me spell it out for you in one simple sentence.
For anyone who is interested in property, today’s low interest rates represent an opportunity.
That’s it. Nothing more. Nothing less.
In fact, I’m reminded at times like this of a saying I’ve read before.
The world is a place full of incredible opportunities. These opportunities still exist whether you seize them or ignore them.
Can you see the opportunities this current market represents? Can you hear the knocking?
Twelve months ago who would have thought that we would have Lenders offering variable rates consistently under 5.00%. On top of that there are Five Year Fixed Rates under 5.00% ! I mean, seriously, how good is that!
If low rates equal opportunity then what action can you take, right now?
I believe it’s worth considering these points when thinking about low rates;
- Access some equity. It makes sense to build some reserves while you can. Refinance if that is required to make this happen.
- Use the lower rates to purchase. During low interest rate periods your borrowing capacity, in the absence of any other changes, is measurably better than during previous times of higher rates.
- Refinance to a lower variable rate if you want to. Just understand that the current lender with the lowest variable rate today may not be the lender with the lowest variable rate tomorrow.
- Lock in a Fixed Rate if it appeals to you. (Just be aware of the implications if you want to get out early.)
However, there is definitely one thing that you should NOT do in today’s climate.
And that’s nothing.
And the first thing you should do as part of that, is contact us to discuss your needs. I’m always available at firstname.lastname@example.org