Mortgages not holding Aussies back from travel

It’s no secret that Australians love to travel. The thing is, we also love to own our own home. Can you do both? It turns out most people can!

There’s this myth that once you take out a mortgage you’re locked down in Australia for good. Or at least for the foreseeable future.

It’s no doubt a major deterrent for young people embarking on home ownership.

But it turns out that’s simply not true: where there’s a will, there’s a way.

Research just out from InsureandGo shows most people (55%) go on at least one overseas holiday within three years of buying their home.

More interesting still, 21% of home owners travel overseas within their first year of buying a home, and 39% within two years.

Then there’s the 10% who are super keen to scratch that travel bug itch and go jet-setting within six months of buying a home.

How do they make it work?

Cheap airfares are a good start.

Nowadays you can get ahead of the pack and receive free email notifications when a jaw-dropping deal is going through services such as I Know the Pilot and Scott’s Cheap Flights.

They’ll send you an email alert when they’ve found a cheap airfare that matches any airports you’d like to depart from and arrive at.

Don’t forget to see Australia!

Rest assured that if the budget is tight, there’s always Australia to explore.

We take it for granted sometimes, but don’t forget that 8.8 million people travel from all across the world to visit our beautiful country each year.

The first few years of your mortgage may serve as the perfect chance to join them in exploring our vast continent.

In fact, that’s exactly what half of all new home owners do within the first year of taking out a mortgage, according to the InsureandGo report.

You don’t have to fly across the country and fork out hundreds of dollars, either. Every state has its own beautiful coastline and national parks, many of which are situated near affordable campgrounds.

Final word

Becoming a house-owner these days doesn’t mean you have to become house-bound.

Sure, meeting your mortgage repayments will always come first. But it’s also important to give yourself and your family a much needed holiday every now and then.

By combining clever budgeting, smart saving, good deals, and a dose of discipline, you don’t have to sacrifice travel for home ownership.

To find out more about budgeting with a mortgage, get in touch. We’d love to help out.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Technological budget killers to watch out for in 2019

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As technology continues to evolve, so too do the challenges of keeping your family budget in check. This week we’re going to look at a couple of technological trends that could put your family budget under some real strain in 2019.

Sure, having everything there at the click of a button these days is convenient. But convenient isn’t free.

In fact, it can blow out your annual family budget by thousands of dollars each year, which can put strain on more important bills such as your mortgage and utilities.

Below we’ll explore a couple of the technological trends that are really starting to chew up more and more of the average Australian household budget.

1. Uber eats and other food delivery apps

Remember the good old days when you used to ring up your local Thai restaurant and place an order directly with the store?

Sure, you’d have to pick it up, but you paid less and the restaurant got the full cut.

Those days seem long gone since Uber Eats, Deliveroo, Menulog and other food delivery services burst onto the scene.

These days you pay about $5 extra each time you order through Uber Eats, and they claim about a 35% commission.

But it’s not just the extra expense per meal. The thing about these apps is that they make it all too tempting to skip making dinner and order takeaway instead.

More than half of Australians are now struggling to plan and cook meals and turn to these apps instead, according to a survey by Australian Beef, and it’s costing an extra $4000 per year in some cases.

The solution? Spend more time cooking fresh food instead. Rather than thinking of it as a chore, consider it an option to spend more time participating in an activity with your loved ones.

It’s cheaper, healthier and more fun!

2. Entertainment subscriptions

Video and music streaming subscriptions services have exploded in popularity over the last two to three years.

Entertainment giants have realised that the best source of revenue is recurring revenue, so they’re all climbing over one another to win over your hard earned cash.

One or two subscription services obviously won’t have too big of an impact on your bottom line (in fact it may even save you money), however problems start arising if you subscribe to a number of them.

For example, there’s Netflix ($18/month), Stan ($17), Foxtel ($50), Kayo ($25), Spotify ($12) and 10 All Access ($10), to name but a few.

Taking out just Netflix and Spotify would cost you $360 a year – about a dollar a day.

Subscribe to the whole lot however and you’re looking at an extra $1200, not to mention any other services family members may subscribe to such as Xbox Live, Podcasts, Youtube Premium, Twitch and Amazon’s Audible.

Long story short: they can add up very quickly!

The solution? Stick to your favourite one or two.

There’s plenty of free entertainment options out there, such as ABC iview and SBS on Demand.

And sure, it might be a bit old fashioned, but your local library is free and offers an endless stream of entertainment.

Final word

Don’t get us wrong: we’re definitely not saying you should shun technology altogether. After all, it makes everything much more convenient.

Rather, instead of the the technology harnessing you, harness it instead.

If you use it wisely and in small doses you can get the best of both worlds: an enjoyable today and a well-funded future.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Juicy cuts on the way? More lenders beginning to reduce rates

There’s been a lot of noise in the home lending and financial space recently, so there’s every chance you may have missed it, but some lenders are starting to cut rates.

The RBA may have kept rates on hold for 30 consecutive months, but that hasn’t stopped lenders from making cuts (or increases) on their own accord.

Bendigo Bank is the latest bank to make a downward move, cutting its interest rates by as much as 0.20 percentage points for new borrowers across a range of its products, while rates for existing borrowers remain unchanged.

Other lenders have also made moves

Bendigo is by no means the only lender cutting rates. In fact, it’s the eighth or ninth lender to make variable cuts this year.

Other lenders that have made cuts include Heritage Bank, Bankwest and State Custodians.

The move comes after RBA governor Phil Lowe recently indicated there’s now a 50/50 chance that the next official cash rate move could be down, despite most pundits previously predicting it would be up.

That said, 14 to 15 lenders have recently increased the variable rate on loans for existing customers, including NAB, Macquarie and ING.

So, what does this all mean?

Well, with so much movement and uncertainty in the market, it might be a good time to give us a call for a home loan health check.

We’d be more than happy to look at your current home loan to make sure it’s still appropriate to your needs – or whether the market has shifted enough for you to start considering other options.

Meanwhile, Treasury warns against damaging competition

In other news, Treasury Secretary Philip Gaetjens has highlighted the important role that mortgage brokers play in promoting competition in the home lending sector.

He’s warned the government and Labor not to damage competition, which could happen if they adopt a banking royal commission recommendation to change the broker remuneration structure to a user-pays model.

“One issue, in particular, where Treasury did express a strong opinion was in relation to the role of mortgage brokers in promoting competition,” Mr Gaetjens told a Senate Estimates committee on Wednesday.

“As governments of all persuasions have recognised, it is important that care be taken to not damage – and where possible, to enhance – competition in the banking sector.”

Queensland-based lender Heritage Bank has also publicly defended broker commissions.

“We do not support increasing the costs for customers to obtain a home loan in the form of a customer-paid fee for service and worsen the current affordability crisis for those customers already struggling to afford a home,” says Heritage Bank CEO Peter Lock, whose comments echo those made by several other non-major lenders, including P&N Bank and ING.

“A major contraction of the mortgage broking industry would reduce competition and put the big banks in an even more powerful position in the home loan market.”

Final word

As we’ve mentioned in previous articles, if you value the service we offer, now more than ever we’d love for you to let those in Canberra know.

Doing so takes just a few minutes, and can be done using this pre-populated letter here. Many thanks!

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

In this together: help us help you

Higher interest rates, increased fees, less flexibility and fewer options. That’s how borrowers will lose out if the banking Royal Commission’s recommendations around how mortgage brokers are paid are implemented. Here’s how you can have your say!

You may have seen in the news that the banking Royal Commission recently recommended that the cost of using a mortgage broker should be transferred from the banks to the customers.

Now, first things first: it’s business as usual for us.

We’re here to help you and will always do so with your best interests at heart.

However, it’s important to note that if these recommendations are adopted, it would cost customers using a mortgage brokers thousands of extra dollars up-front when buying a home.

On top of this, the imposition of a blanket ban on commissions (starting with the removal of trail commissions from 2020) would significantly lower broker remuneration, kill competition, and drive up the cost of borrowing for millions of Australians.

Mortgage & Finance Association of Australia (MFAA) CEO Mike Felton explains: “The recommendations on brokers represent a massive win for the big banks. The Royal Commission was set up to protect (consumers) from big bank power but has simply entrenched it further”.

“How mortgage brokers can be front and centre of the recommendations is inexplicable. A massive new bank fee added to the cost of buying a home cannot be a good outcome for Australians.”

The stats

Reviews by ASIC and the Productivity Commission have found that brokers drive competition by providing a shopfront for smaller lenders.

In fact, mortgage brokers now originate 59.1% of all mortgages in Australia, and more than half a million home buyers use a broker each year.

“I fail to see how decimating the broker channel, leaving Australians with a handful of lenders to choose from, is good for competition, or good for customers,” adds Mr Felton.

Additionally, over the past three decades brokers have contributed to the fall in net interest margin for banks of over 3% points, according to Deloitte. This saves you $300,000 on a $500,000 30-year home loan (based on an interest rate fall from 7% to 4% pa).

Here are some other interesting stats from the Deloitte Access Economics report and independent research released last month from a survey of 5,800 Australian broker and bank customers:

– 58% of Australian consumers who intend to use a mortgage broker in future would be unwilling to pay a broker fee of any nature.

– Only 3.5% of consumers would be willing to pay a fee of $2,000 or more.

– A mortgage broker earns on average $86,417 before tax.

As the stats indicate, most mortgage brokers are small businesses that would be crippled by the proposed changes – and it would only be the big banks that profited!

How you can help us to continue to support you

Right now there’s an industry-wide, grassroots campaign running for everyday Australians to send a message to the government that they don’t want mortgage broking fees transferred onto them.

Here’s what you can do in four easy steps:

1. Take action with your local politician: Contact your Federal MP and let them know how you feel by visiting this site. It takes just a couple of minutes as there’s a pre-populated letter already filled out for you (you can edit it as well).

2. Get others involved: Talk to your family, friends and your customers and ask them to go to the site and contact their Federal MP as well.

3. Sign and share the petition: There is also a petition available at www.brokerbehindyou.com.au – please sign and share the petition to ensure policy makers understand the weight of support behind the channel.

4. Share the campaign: Additional campaign advertising collateral will be made available on the website for you to share and promote on your social media platforms daily over the next few weeks and beyond.

If you’d like any further information on this issue, please don’t hesitate to get in touch. We’d love to discuss it with you!

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Interested in a cool $150? Update your Medicare account details

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Medicare customers are being urged to update their bank account details to see if they’re entitled to a share of more than $110 million in unclaimed rebates. Here’s how to do so online in a few minutes.

And no, this is not one of those pesky scams doing the rounds! But we’ll touch upon that later.

The government released an interesting stat this week: almost 670,000 people have not provided Medicare with their bank details, which has resulted in more than $110 million in unclaimed rebates.

As such, the average amount owed to each individual is about $150 – a decent injection that could help you pay off your mortgage, an upcoming bill, or a nice Valentine’s Day dinner!

Some people are missing out on far more – and often they’re the people who need it most – if they are regular visitors to their doctor or have had treatment for a serious medical condition. So make sure you let your friends and loved ones know too.

Minister for Health Greg Hunt put out a statement this week encouraging residents to update their bank account details so they could start receiving their cash rebates.

“It only takes a couple of minutes, and the easiest way to update your details is by using one of the Australian Government’s digital channels, such as the Medicare Express Plus app, or through your myGov account,” he says.

Is that it?

Yup, that’s it.

Once you’ve logged into your account and updated your details Mr Hunt says Medicare will take care of the rest.

“The money you’re owed will be deposited in your account in a matter of days,” he explains.

“My advice is to set aside a couple of minutes, to do what is a really simple task that will ensure you receive what you are entitled to quickly and easily.”

Be wary of scammers!

It’s not lost on us that this sounds like a scam. And guess what? There are actually scammers out there trying to take advantage of this rebate payment by getting in touch with people directly over the phone, via SMS, or email.

The scammers are posing as Medicare representatives and contacting people asking for their bank account details, so you need to remain vigilant.

To avoid falling victim: don’t click on any links in emails or texts as they may take you to a fake website. Instead, go directly to www.my.gov.au to update your account.

“As recently as late last year, scammers were actively targeting people through SMS messages, that urged them to click on a hyperlink to claim their outstanding Medicare rebates,” says Minister for Human Services and Digital Transformation Michael Keenan.

“While the department does call, SMS, or email people, it never includes hyperlinks in emails or text messages.”

For more information on how to set up a Medicare online account, visit www.humanservices.gov.au/medicareonline

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.