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In the lead up to the election everyone was predicting a Labour win. Having won every opinion poll, it was a safe prediction by pundits.

“Polls suggest Labor could make a net gain of 12 seats, giving it 81 MPs in the 151-seat parliament.” SBS News. A quote from early on election day, 18th May 2019.

However, when the polls were counted these commentators were left with egg on their face. Somehow, Labour lost the unloseable election and Scott Morrison remained Australia’s Prime Minister.

But what happens next and how will it impact Australians?

Going into the election Bill Shorten’s policies included negative gearing changes and taking away franking credits. With the Liberal’s victory, these changes will not be introduced.

FIRST HOME-BUYER SCHEME

The Liberals have touted a new First Home Buyer scheme to get First Home Buyers into the market sooner by helping with deposits. First Home Buyer Scheme Exclusive Report 

The proposal is to help First Home Buyers remove the need to pay LMI (Lender’s Mortgage Insurance), which is a one-off fee that can be in the tens of thousands of dollars paid by borrowers when they purchase a house with a deposit of less than 20%.

APRA

Additionally, APRA has removed its’ policy that new mortgage customers are assessed on their ability to repay loans at an interest rate of either 7%, or a 2% ‘buffer’ over the actual loan’s interest rate. Meaning if the actual rate was 5.5%, a customer would be assessed at 7.5% (5.5%+ 2% Buffer).

This policy worked to restrict a customer’s borrowing capacity and was introduced in 2014 to contain soaring house prices and investor loan growth.

But things have changed since 2014, and now interest rates are at historical lows, and likely to remain so for some time; so, assessing customers at 7%+ makes little sense.

Through being assessed at a lower rate (now just 2.5% above the actual rate), lending capacity sees a marked increase.

INTEREST RATE REDUCTION

Last week’s move by the RBA to reduce the Cash Rate by 0.25%; and the response by banks to pass on most, if not all of the reduction to borrowers,  , means that now might be a good time to assess your own financial situation and see if you are getting the best rate possible.

Take loyalty out of the situation can often be difficult for clients. Canstar research has shown, on average, the Big Banks offer new customers a rate 0.79% lower for new customers than what their existing customers are paying.

On a $600K mortgage, this equates to $130 per month!

Check out our Loan Comparison Calculator to see how much a 0.79% reduction in your rate will save your over the course of your loan (Numbers are generally in the tens of thousands of dollars!)

DWS LOAN COMPARISON CALCULATOR 

At Dollars With Sense we have a team of friendly and knowledgeable finance specialists that help you take advantage of these changes and avoid the banks keeping your rate cut.

You’ve got nothing to lose, except your home loan!

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One of the things I appreciate the most about the Dollars with Sense team is how they are so honest about financial matters. They are not after promoting a certain kind of investment, but rather, they always emphasise what an average person should consider before jumping into a financial commitment. Dollars with Sense truly opened my eyes towards property investment, and I am so grateful that I get no-nonsense tips from these experts. I hope that Dallas and the team will continue to guide us in all money matters!

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