Clear Lend

01/07/2025

A wise person once said: failing to plan is a plan to fail. As probably the most significant purchase of your life, saving for a home definitely takes prior preparation and planning!

- How much can I afford?

You may have a dream home in mind but you first need to work out if you can afford it. There are many factors that feed into our decision around what to buy and where - proximity to work and family and our stage of life are just a few - but the single biggest decider is nearly always what we can afford.

It's really a case of looking at the big picture and working your way back from there. Consider your household income and what you realistically can afford in loan repayments, taking into account all of your expenses.

As a guide a mortgage calculator can be a great place to start, but it won't take into account all of your personal circumstances or eligibility for a loan so talk to your local Mortgage Broker to get your plan underway.

https://www.moneysmart.gov.au/

- How much do I need for a deposit?

Ideally, you should start with a 20% deposit to avoid paying lenders mortgage insurance (LMI). This is a one-off insurance payment charged by lenders to those borrowers who are considered a higher financial risk.

Your risk is determined by your loan to value ratio (LVR), which is the amount you wish to borrow divided by the lender's valuation of the property you wish to buy.

Lenders generally like to have at least a 20% buffer so if you have to default on the loan, they stand a good chance of recouping the loan amount through the sale of your property..

Although LMI can add several thousand dollars to property purchase costs, many borrowers consider it a worthy investment to help secure a loan with a lower deposit.

The critical factor is whether your income can support the higher loan repayments. Ask your broker for an LMI estimate based on your financial situation before deciding how much you need for your deposit.

- Saving for a deposit:

Working out how much you need for a deposit can be fairly easy compared to actually saving for it. Sacrifices are generally in order!.

?Budget cuts

The best place to start is a budget. Review all of your expenses, including day-to-day costs like lunches, coffees and transport, and your bigger bills, such as rent and electricity.

Don't forget to also include any annual bills such as car insurance and registration, which can sabotage your savings. Then it's times to get a little ruthless and look for ways to cut back on costs.

Here are just a few ideas:

- Make your lunches.
- Dine in, not out, with friends.
- Ditch the gym membership and start exercising outdoors.
- Make a list for your groceries and stick to it.
- Save, don't spend, your tax return and/or salary bonus. https://www.moneysmart.gov.au/tools-and-resources/calculators-and-tools/mortgage-calculator

01/07/2025

Use the cold to get it sold!

With many property buyers in hibernation over winter, if you are thinking of selling, the cold weather is your sign that it is a great time to spruce up your property, ready for the spring selling season.

Here are my top tips to prepare:

Make an entrance: First impressions count, so take stock of your front entrance. If your front door is looking tired, replace, repaint or restain it. Similarly, your driveway should be clean and free of cracks. Old concrete driveways can be revived with a resurface and a respray in a new colour or a stencilled pattern.

Make sure your letterbox fits with your home exterior and makes the right statement, either built into a fence or standing on its own.

Get into the garden: Time well spent in the garden over winter will pay off in spades come spring. Take advantage of the cooler weather to clear debris, weeds and overgrown trees and shrubs. It's also the perfect time to completely overhaul garden beds with new soil and mulch. Draw a rough plan and clip pictures from magazines to create a clear picture of your garden. Take your plan to your local nursery and get expert advice on which plants should go where and how many you actually need. Just make sure the end result is easy to maintain for maximum appeal.

Consider some colour for a warm welcome. The colour yellow has been proven to help sell, so plant or pot marigolds along a walkway or near your front door.

Leave fertilising your lawn until late winter so it's in tip-top condition when your house hits the market in spring.

Clear out clutter: Make your rooms look larger by putting less in them. Consider replacing multiple pieces of small furniture with one large statement piece. You could also try re-arranging your furniture differently to create the illusion of space.

Brighten your outlook: Clean all your windows inside and out. You will be surprised how much fresher your house looks with sparkling, spotless windows. Make sure you take down and hose all the fly screens while you're at it!

Deck the deck: Consider adding a deck to create outdoor entertainment space and value. If you already have one, winter is the perfect time to re-oil the surface and railings and replace any worn outdoor furniture.

Spotless surfaces: Wash walls, ceilings, light fittings and ceiling fans to rid them of dust and grime.

Lighten up: Twilight photo shoots and evening open houses are hot selling tools, especially when the weather warms and the days grow longer. Take time over winter to install outdoor lighting that spotlights your front garden and entrance and any outdoor entertaining areas, including the pool.

Detach: It may sound like a strange selling strategy, but consider de-personalising your home. While you still want potential buyers to feel "at home" when they inspect, they don't necessarily want to see all your family photos on the sideboard and children's artwork on the fridge. Apart from uncluttering your surfaces and creating clean lines, packing up the family portraits allows buyers to envision their family living there, not yours.

It's also an opportunity to step back and genuinely appraise your decor and colour scheme. Is your home styled for broad appeal or just for people who share your penchant for peach?

If you find it hard to be impartial, one hour and a couple of hundred dollars spent with a design or colour consultant may be a wise spend. A good consultant will know what trends have market appeal and can share some clever tips on quick fixes and colour schemes. How much of the advice you take is up to you, and you usually have the option to just pay for the consultant's time and DIY the restyle.

Get energy efficient: With electricity costs on the rise, buyers are on the hunt for energy-efficient homes. Switch to energy-saving light globes and consider a solar-boosted hot water system. While you may not be living there long enough to fully benefit from the savings, buyers are likely to be enticed by the promise of smaller electricity bills.

Freshen up the kitchen and bathroom: You don't need to completely overhaul tired kitchens and bathrooms for a fresh look. If your fixed appliances - oven, cooktop, rangehood and dishwasher - are older than 10 years, considering upgrading to new ones. Shop around for a package deal on reputable brands.

Add some shine to the bathroom with new basin taps and create a sense of space with a large frameless mirror above the vanity. Upgrade your shower fitting if needed, especially if it has poor pressure. Plenty of buyers will test the shower head during an inspection.

18/06/2025

Is 50 sneaking up on you or has it arrived for someone you know?

The biggest question on most people's minds (in the age group 50 to 65) is... "Will we outlive our savings?"

There are plenty of options available to properly fund your retirement, as long as you start early enough.

For more details, read our "Is 50 quickly approaching" guide.https://www.mortgageaustralia.com.au/email/files/is50quicklyapproaching.pdf

17/06/2025

Have you considered a second residence on your property?

Home owners looking to invest in a rental property without taking on significant debt are finding a solution in their own backyard.

The granny flat is regaining popularity as a solution to tight rental markets, an ageing population and metropolitan land shortages, thanks to more relaxed legislation in some parts of Australia.

Whether it's actually for granny, an adult child or an unrelated tenant, a second residence on your existing property can bring benefits, if you do your homework.

Not just a room for rent

Different states have different rules but generally granny flats:

Can be built only on residential blocks 450 square metres or larger that are not strata title, subdivided or community title property.
Must be owned by the same person(s) as the main dwelling.
Can have no more than 60-70 square metres of living space (patios, verandas or carports can be additional).
Can be attached to the primary dwelling or freestanding.
Must have a separate entrance (even if attached to the main house).
Regulations regarding construction and occupancy differ between states and territories, so do your homework before finalising plans. Planning rules can also vary among councils.

Managing up

Having the grandparents close by has all sorts of family advantages, providing everyone gets along! One of the biggest perks, apart from having built-in baby- sitters, can be lightening the financial load for both the senior and junior parties.

Often parents agree to cover the cost of building a granny flat as an affordable alternative for their retirement, while their child can benefit from increased value to their property and possibly a rental income further down the track.

But don't assume a granny flat will instantly add value above and beyond its cost. Often the value is derived from the opportunity for an extra income to help pay down the mortgage on the primary residence faster.

It will depend on the housing market in your area as to whether a second residence adds to the overall value of your property - another reason to do your homework.

It's also important you get legal advice for your circumstances so if someone dies or has to go into care, or the younger family decides to sell, the financial implications are clear for everyone involved.

Still in the nest

A granny flat can be a win-win for parents whose adult children are still attached to the family home and all of its convenience. The separate residence gives both parties privacy, while the younger generation can get a taste of independent living and save on rent.

Parents may have to set some clear boundaries with this option because, although the kids are at arm's length, they are still under your nose and may still need to abide by your house rules.

Investing close to home

Taking the plunge into investment property can be daunting for home owners. With a granny flat, you can dip a toe without hefty debt and be positively geared from the get-go. For an investment of around $120,000 in a capital city, you are likely to reap $220-$330 a week in rent.

Talk to local real estate agents to gauge the local rental market. Granny flats (either attached or detached) often appeal to single women who appreciate the extra security of someone else living on site or young people studying from out-of-town or overseas, especially if your residence comes fully furnished.

You should also research whether a one or two-bedroom residence would be more rentable in your neighbourhood.

Tax implications

Capital gains tax (CGT) doesn't apply to your main residence, no matter how much it appreciates in value from when you buy to when you sell. You can even rent it out for six years, CGT-free, providing you don't claim another property as your main residence for that same period.

However, the CGT exemption may no longer apply for part of your property when you add a granny flat, which means you may have to pay CGT when you sell up.

The rules can be complex and a little blurry, and hinge around how the granny flat is used, so make sure you get independent, professional tax advice to fully understand the tax implications for your situation.

Need extra money to fund the build?

Talk to your broker if you are considering creating a second residence. It might be a good opportunity to review your home loan and find a deal to better suit your circumstances.

17/06/2025

Over 55% of Australian borrowers (including 65% of first home buyers) choose to use mortgage brokers to secure their loans. https://www.afgonline.com.au/broker/keep-competition-alive/

15/06/2025

If you are thinking of buying your next home - here is a choice you will be facing:

Will your life come to an end if you don't have a walk in wardrobe? Is it important for you to have a home cinema, or would you prefer to be in a modest property, within walking distance of great restaurants and sporting facilities?

There are so many choices when you start shopping for a home, and one difficult decision is whether to choose a new home (buying off the plans or buying something recently constructed), or whether to opt for an older property at a better price.

There are plenty of pros and cons to take into account, but here are a few of the main ones:



New Home:

A new home is unlikely to need any ongoing repairs in the short term. Anything that happens in the first seven years should be covered by the builder's warranty. You won't have to worry about the ducted heating breaking down and costing you a fortune to replace.

If something happens and you need to put the property up for sale, a new home is a more attractive option for buyers. It's likely to have more features and conveniences than an older home, and it won't have mustard coloured wall paper (unless you chose that option when you built!)

Like all shiny new things, a new home usually comes complete with a higher price tag, which means higher repayments and greater likelihood of you experiencing financial hardship in the future. You will have less of a financial buffer if things change, like interest rates increase, sudden unemployment, or long term illness.

Usually new homes are built in a more distant location, unless you really are stretching the budget for a new home in an inner city suburb. Because you're likely to be further out, it might take longer to achieve the growth that you would like - especially if the same house and land package is still available just down the road after your home has been finished for several years.

Keep in mind, there will also be additional cost of finishing the home, such as curtains, carpets, landscaping and driveways.



Older home:

If you purchase an older home, it's likely that you will be in a better location with higher chance of capital growth. This means that you could make quite a bit on your investment by hanging onto it for a few years, or you might even choose to renovate in the future which could further boost the value of the property.

It's likely that you will have a lower purchase price with lower repayments, which means a buffer for any unexpected things that might arise.

You will have a better chance of building your investment portfolio in the future by keeping the purchase price down, rather than blowing the budget on building a new home.

It's your personal choice whether you change anything, but there should already be window furnishings, established gardens and driveways so you won't have to finish the dream.

On the flipside, an older home might be less attractive to buyers if you have to sell - or you might end up having to do some renovations to achieve a good price.

There could be a need for ongoing repairs and maintenance which could be very expensive depending on the problem. If you discover a major issue with the foundations of the home, for example, the repair bill could run into the tens of thousands.

One important step if you choose to purchase an older home is to obtain a building and pest inspection report. This will help to ensure that your dream home isn't riddled with termites, or about to slide down the hill.

15/06/2025

Choosing the right type of loan is the first step.

The first step in getting a low cost loan is choosing the right type of loan.

There are various types of home loans, all offering different rates and features:

- Honeymoon and Intro Rate loans
- Basic or "No Frills" loans
- Standard Variable rate loans (usually good to avoid these in my opinion)
- Fixed Rate loans
- Equity and Line of Credit Loans
- Offset Home Loans
- Professional and Discount Home Loan packages
- Bridging Loans

For more details read my guide to "Choosing the right loan".https://www.mortgageaustralia.com.au/email/files/choosingtherightloan.pdf

13/06/2025

Discover how to turn your home equity into a better retirement for you.

If you have equity stored away in your home, now could be the perfect time to tap into it for an investment property.

Equity is simply the difference between the value of your home and what you owe on it. If you have a property valued at $500,000 and owe $200,000 on it, you have $300,000 equity available.

There are a few reasons why the time is ripe for home owners to scout out an investment property.

Firstly, property prices have flattened across most of Australia in the wake of global uncertainty. However, key indicators in the US now point to a recovery there, which our market is likely to follow, especially given our strong economy. So, not only is now a buyer's market but there's a good chance of capital gains in the first few years of ownership.

Secondly, interest rates are low. After the recent drop in official rates, there is strong speculation they won't dip further in the short term.

Thirdly, we still have a housing shortage here in Australia, which continues to drive low rental vacancy rates. That means good properties rent easily.

So, where to begin?

Start with a visit to your local Mortgage Broker to get a rough idea of what you can borrow. Your broker can estimate your equity, talk through the types of loans available and give you a rough idea of repayments. Then you will know what you can afford before you start looking at properties.

You can also do some rough sums beforehand with some of the calculators on our website.

A broker can find the right loan for your circumstances and shop around for the best deal. One of the most popular products among property investors is a line of credit. It acts like a big overdraft at a home loan rate, giving you instant access - as a rule - to up to 80% of the equity in your home. Interest is only paid on the funds you use. It's a very elastic, convenient product. But one word of caution: you need to be disciplined with your cash flow. Easy access to equity can be a temptation for many borrowers to spend up big on depreciating assets that offer no investment value and only add to your overall debt.

Capital gains or rental return?

You should decide whether you want strong rental returns or decent capital growth over the next several years on your investment. If you are in a high tax bracket and looking to create a tax advantage through an investment loss, you will be looking for capital gain.

First-time investors looking to establish a portfolio of properties should also be aiming for capital growth over the next five or so years, as this will establish equity for the next property purchase. However, some investors are not in a hurry for capital growth and prefer their property to be cash positive or neutral from the get go. If that's the case, consider a property in one of the areas with a long-term future in resources, where rents reflect a shortage of housing. Just keep in mind that although the resources sector has a strong future, based on global demand, your investment is entirely dependent on the continued success of one industry.

Right now, the bottom line is that there's potential for both decent capital gains and rental returns for property investors who chose the right property in the right location.

Find the right property

The first rule is to invest in property with your head and not your heart. Remember, you are not buying a home or apartment to live in yourself.

Savvy investors look for properties:

- Close to public transport and other amenities, such as shops or schools, especially in-demand public schools that only accept students in their local catchment.
- That are low maintenance and well maintained.
- In areas with good potential for capital gains.
- In areas with low rental vacancy rates.

Another tip for first-time investors is to stick to familiar turf. It could be near where you live now, where you grew up or previously lived, where you have friends or family or near where you work. Not only are you more likely to feel comfortable investing in a familiar area but you can keep an eye on local trends and the property itself.

You should also find out whether any major infrastructure projects are slated for your target area. New roads, public transport and major developments, such as hospitals, can add significant value to rental properties. Visit www.infrastructureaustralia.gov.au for links to the major planning departments in each state.

Managing your investment - and your tenants

Like all investments, rental properties need to be managed. You can be landlord and property manager in one, or pay a professional property manager. If you are busy or live some distance from the property, your money will be well spent on a reputable, reliable manager.

For a small monthly fee (generally 6 to 9% of rent), a good manager will vet prospective tenants, ensure the property is looked after, make sure rent is paid on time, arrange repairs and maintenance and recommend appropriate rent increases. Ask for referrals from other investors and look for an agent who specialises in property management, rather than sales, so you know your rental will not be second fiddle to other activities. You should agree on what your property manager can authorise automatically when it comes to repairs.

It's also important you keep tabs on the local property market to track the equity you build over time, which not only adds to your wealth but could be used towards your next investment property.

12/06/2025

If your debt is more than your disposable income - then take action now before its too late.

Did you know?

The average Australian household has a debt of approximately 150% of their annual disposable income.

Australian household debt increased almost six-fold between 1990 and 2008, but more surprisingly our household debt grew twice as fast as the total value of our assets in the same period.

That's just the wrong way around!

Ask yourself these questions to save yourself a lot of financial pain later:

Is your debt growing faster than your assets?
Are you concerned about your debt situation?
Are you struggling to make your repayments each month?
Does it always seem like your bills amount to more than your wages?

If you answered yes to one or more of these questions, then perhaps it's time to look at a solution for your debt situation, now, before it's too late.

Hopefully this short guide can provide you some practical solutions.https://www.mortgageaustralia.com.au/email/files/ifyourdebtismorethanyourdisposableincomethentakeactionnow.pdf

12/06/2025

Whether you're looking to install a new bathroom, makeover a rental property or add extra value ahead of a property sale, our team can help arrange low rate personal finance to make your home renovations a reality.

Our partners offer a fast, simple process and access to funds typically within 48 hours. Don�t delay, get in touch today!

11/06/2025

09/06/2025

Avoid these Common Mortgage Mistakes:

For many homeowners, it's easy to get caught up in all of the excitement, and stumble into one or more of these embarrassing mortgage mistakes. Unfortunately I see it very often.

Getting a Standard Variable Rate loan:

Banks love nothing more than putting customers into a Standard Variable Rate. They heavily promote the extra flexibility and offset facility. The reality is it is very rarely worthwhile for the average customer to pay the higher rate for the extra features.

Even if you have a large amount of money to put in an offset account, you could achieve much the same thing with a basic loan with a redraw facility and pay a much lower interest rate.

If you want a fully featured loan, compare the costs of these extra features to the lender's cheaper products. Or better yet, push for a liefetime discount package on the standard loan and get the best of both worlds.

Honeymoon Rates:

There's an old saying - 'if it sounds too good to be true, it probably is'. This is the best way to describe 'Introductory Rate' home loans. Don't get me wrong, there are some great offers out there, and a low rate in the first year or two can make all the difference to your weekly budget. But to avoid future pain, it's best to base your comparison on the rate that you will pay when the honeymoon is over.

Rate Rises:

Part of the loan application process is to work out what you can afford to repay, based on current interest rates. But did you consider what would happen to your budget if interest rates were to increase? Many Australians have been caught out in the past, with disastrous consequences. The best way to avoid becoming one of these cautionary tales is to be mindful of both your purchase price, and the impact that future rate rises will make on your loan repayments.

Savings Fatigue:

It was a long and difficult journey to save that deposit. You might have taken on extra work, missed out on overseas travel, avoided fine dining or sacrificed your cable TV. But now is not the time to let your hair down - especially if you haven't reached your settlement date. After you hand over the deposit, you'll still need to ensure that you can cover stamp duties, conveyancing fees and moving costs. For the unlucky few, there could even be unexpected maintenance costs after you settle. (It's funny how the hot water service always seems to hang in there until the worst possible moment). So try to keep your good money habits going a bit longer.

Don't blow the budget:

Most of us take the time to think about how much we want to spend before we start making an offer on our next home, or gesturing wildly at an auction. But sometimes we get carried away and don't want to risk missing out on our dream home. So who really wins in this scenario? The vendor and the real estate agents of course! Not the proud new home owner, who has just committed to a purchase price and mortgage that he can't really afford.

Inflexible loans:

Just like electronics and furniture, when it comes to a mortgage you get what you pay for. There are some very cheap (and nasty) options available to borrowers. Some of these might seem appealing but it's important to consider the features that you need in a loan - today and a few years down the track.