Falcon Home Loans

08/09/2024

Refinancing a loan can be a smart financial move for a customer for various reasons:

Lower Interest Rates: One of the primary reasons a customer might choose to refinance a loan is to take advantage of lower interest rates. If interest rates have dropped since the original loan was taken out, refinancing can reduce the overall cost of borrowing.

Lower Monthly Payments: By refinancing a loan, a customer may be able to extend the repayment period, which can lower the monthly payments and make them more manageable.

Change in Loan Term: Refinancing provides an opportunity to change the term of the loan. For example, switching from a 15-year to a 30-year mortgage can reduce the monthly payment but increase the total interest paid over time.

Access Equity: In the case of a mortgage refinance, customers can access the equity built up in their homes, which can be used for home improvements, debt consolidation, or other financial needs.

As for consolidating debts, here are some benefits:

Simplified Finances: Consolidating multiple debts into a single loan can simplify a customer's financial situation. Instead of keeping track of multiple due dates and payments, they only need to make one payment each month.

Lower Interest Rates: Debt consolidation can help lower the overall interest rate on the debts being consolidated, especially if the new loan has a lower interest rate than the existing debts.

Lower Monthly Payments: By extending the repayment period or securing a lower interest rate, debt consolidation can lead to lower monthly payments, making it easier for the customer to manage their finances.

Improve Credit Score: Making timely payments on a consolidated loan can have a positive impact on the customer's credit score, as it shows responsible debt management.

In summary, both refinancing a loan and consolidating debts can offer financial benefits to customers in terms of saving money, managing payments more effectively, and improving their overall financial situation.

12/04/2024

05/09/2023

Hi Friends,

The Reserve Bank of Australia (RBA) has again left the cash rate on hold this month at 4.10 percent.

Read today’s official statement on the RBA’s website.

Cash rate holds at 4.10%


That’s three months in a row that the RBA has left the cash rate on hold, giving homeowners a chance to breathe.

The decision comes as a growing number of Australians face mortgage stress and home loan defaults while grappling with the cost-of-living crisis.

New data by Roy Morgan shows 1.5 million Australians, or 29 per cent of borrowers, were at risk of mortgage stress in the three months to July, a number higher than during the 2008 global financial crisis.

And according to an expert, the peak in mortgage arrears is yet to hit.

S&P Global Ratings analyst Erin Kitson said while the percentage of households missing mortgage repayments was low, it was a lagging indicator.

"We certainly expect arrears to continue to rise and in terms of how long and so forth, ultimately that will depend on where interest rates head and where they finally peak. At this point we expect arrears to continue to increase into the first half of next year," Ms Kitson said.

It will be interesting to see what the RBA does in the coming months when Michele Bullock takes over as governor from September 18.

When Philip Lowe was appointed as governor in September 2016, he didn’t change the cash rate for 29 months.

Some have speculated Ms Bullock may keep rates on hold as she focuses on the RBA overhaul in response to the recent review of the central bank. Others have suggested the RBA may begin cutting the cash rate within 12 months.

If you’re overdue for a home loan health check, don’t procrastinate. Get in touch today and we’ll advise you about whether your current home loan best suits your needs.
property market snapshot

All dwellings
Auctions / clearance rate
Private sale
Monthly home value change

VIC
925 / 62%
986
▲ 0.5%

NSW
907 / 61%
1252
▲ 1.1%

ACT
74 / 61%
85
▲ 0.3%

QLD
219 / 46%
915
▲ 1.5%

WA
4 / 50%
550
▲ 1.0%

NT
5/ 60%
20
▲ 0.8%

TAS
0 / --
114
▼ 0.1%

SA
73 / 74%
293
▲ 1.1%

Need help understanding what this announcement means for you? Contact us today!

Dimuth Samarasinghe
Suite 3, 383 –385 Church Street | Parramatta NSW 2150
t. (02) 8011 1961 | 0415483088
e. [email protected]
w. www.falconhl.com.au

02/06/2023

Phillip Lowe had a subtle shot at politicians this week, and Treasurer Jim Chalmers in particular, when fronting a Senate Estimates hearing in Canberra, asking the Senators to consider whether fighting inflation should only be left to the RBA?

"In a perfect world, you'd have a different set of arrangements," Lowe proposed. "The other way you could reduce aggregate demand at the moment is to increase taxes or reduce government spending." Of course that might involve some of the senators in question losing their jobs, which they'd rather not do. He could also have added something about the government not supporting wage rises, but sensibly kept away from that, even going so far as saying he didn't think the budget was adding to inflation, but actually reducing it.

It's still unknown if Lowe will keep his job when his term (or time) is up in September, and Chalmers has given no hint of support, suggesting that he won't. Whether he does or not is unlikely to change his successor's focus on inflation, and therefore the upward direction of interest rates, even though Lowe's claims that the 11 rate rises over the past year are working. The Fair Work Commission's 5.75% increase in minimum wages awarded to 2.6 million workers, and 8.6% for 180,000 on the lowest rate, won't be helping when the RBA announces the outcome of next Tuesday's board meeting. As a result, a bevy of bank economists are forecasting a further 0.25% rise, with some now suggesting that a peak of 4.6% - or three more increases - is not out of the question.

Not only are interest rates a blunt instrument with which to manage inflation but their effect on the economy is lagging. As a consequence, when the results show up in the statistics the RBA use in their monthly determinations, the tipping point in the economy has already occurred. Hence rates inevitably rise (and fall) too far. For many people - those under mortgage or rental stress, or minimum wages - that tipping point has already occurred, so if a cash rate of 4.6% is on the cards there'll be some serious pain, and certainly Lowe's increases will have worked.

Even if he's not going to be there to take the credit - or the blame - when or if inflation returns to the 2-3% target, and rates gradually follow suit.

FundMonitors.com

09/01/2023

The decline in home values breaks records
According to CoreLogic, Australian home prices dropped 8.40 per cent since May 2022, the largest peak-to-trough on record.
New data from CoreLogic has shown that the value of Australian houses has dropped by a record 8.40 percent since the property market hit its peak in May last year.
According to the property data and analytics company, the Daily Home Value Index (HVI) hit a new record on Saturday (7 January 2023), after peaking on 7 May 2022.
The researchers assessed changes in the daily HVI and found that the change between May 2022 between January 2023 was greater than the previous record downturn of 8.38 percent between October 2017 and June 2019, which came about largely as a result of tighter lending standards, according to CoreLogic.

CoreLogic flagged that this current downturn has taken place in less than nine months with the bottom of the trough yet to come (given that economists expect further price falls in the coming months as higher interest rates and a slowing economic environment take hold).
Australia’s three largest capital cities (Sydney, Melbourne, and Brisbane), which also have the largest weighting in the national home value index, have contributed most to the new record drop in home values with both Sydney and Brisbane recording double-digit falls from the peak.
According to the company, the main driver of the record drop in values has been a record run of rate hikes. Indeed, the cash rate has risen by 300 bps in the past eight months as the Reserve Bank of Australia moves out of its pandemic-driven emergency settings and works to curb inflation.
Eliza Owen, CoreLogic’s head of residential research, in Australia, suggested that the rampant rate hikes have therefore resulted in a rapid reduction in borrowing capacity, lowering the amount buyers can offer for homes and potentially dissuading potential buyers from entering the market.
She added: “Australians are also more indebted today than through historic periods of rate rises, with the latest Reserve Bank of Australia’s estimate of housing debt-to-income ratio sitting at 188.5 percent. A decade ago this figure was 162.0 percent and in 2002 the ratio was 130.2 percent.
“Higher household indebtedness may have increased the sensitivity of housing values to interest rate rises,” while higher inflationary pressures, combined with a post-lockdown surge in spending, have also “eroded household savings, which could be utilised for a home loan deposit.
“This trend is also being reflected in low consumer sentiment figures, which has plunged to near-recessionary levels and traditionally coincides with fewer home sales.”
While the 8.4 percent drop has set a new record, it comes off a particularly high base. For example, property values rose 28.9 percent between September 2020 and May 2022, which was the fastest rise in home values nationally on record.
As such, while the drop in values has set a new record, home values are still around 16.0 percent higher than they were five years ago, and 59.8 percent higher than they were 10 years ago.
Looking forward, Ms. Owen said she expected housing market conditions to remain soft over the coming months.
“The underlying cash rate is likely to see further increases in 2023, with market expectations pricing a peak of around 4 percent, while the median forecast from Australian economists is lower at 3.6 percent,” she said.
“Ongoing increases in interest rates will further erode the borrowing capacity, and likely prolong the country’s housing downturn until interest rates stabilise.”
Property prices dropped 5.3% in 2022
The daily HVI data comes off the back of separate CoreLogic research that revealed property values fell 5.3 percent in the calendar year 2022.
According to the company’s national HVI, home values fell 1.1 percent in the last month of the year. This meant that in the 12 months to December, values were down 5.3 percent, the most significant calendar year decline since the global financial crisis (GDC) in 2008 when values were down 6.4 percent.
Sydney and Melbourne saw the largest annual fall at 12.1 percent and 8.1 percent. Hobart, the ACT, and Brisbane also recorded an annual drop in housing values, falling by 6.9 percent, 3.3 percent, and 1.1 percent, respectively.
However, three capitals recorded values rise over 2022 with Adelaide at 10.1 percent, Darwin at 4.3 percent, and Perth at 3.6 percent.
By Annie Kane 10 January 2023

24/12/2022

We at Falcon wish you a Merry Christmas

Falcon Home Loans specializes in Mortgage Advising & providing home loans. We are committed to optim

13/09/2022

Are you thinking you are not financially extensive enough to have an Adviser to handle your investments?
No!
We can help you protect and build your assets to make the most out of your investments for long term benefits.

06/08/2022

Are you thinking you are not financially extensive enough to have an Adviser to handle your investments?

No!

We can help you protect and build your assets to make the most out of your investments for long term benefits.

02/08/2022

RBA Cash Rate Announcement

Another month, another cash rate rise. This time the Reserve Bank of Australia (RBA) increased the cash rate a further 50 basis points to 1.85 percent.

Read today’s official statement on the RBA’s website.

Cash rate raised to

1.85%

Increased by 50 basis points

The RBA’s decision was in line with economists’ expectations.

Global inflation remains high due to pressures such as COVID-related disruptions to supply chains and the war in Ukraine.

In Australia, domestic issues are also playing a part in driving up inflation, including strong demand, a tight labour market, capacity constraints in some sectors, and recent floods.

The RBA expects inflation to peak later this year, before dropping back to the 2-3 percent range in 2023.

“Higher interest rates will also help establish a more sustainable balance between the demand for and the supply of goods and services,” RBA Government Philip Lowe recently said.

With there likely to be more cash rate increases on the horizon, it’s important to give your home loan a health check, particularly if you are on a variable rate or a fixed loan that’s ending soon.

A recent analysis by the RBA revealed around 30 percent of variable rate mortgage holders face a more than 40 percent increase in mortgage repayments in the event of the cash rate hitting 3.1 percent.

Meanwhile, more than 50 percent of fixed rate borrowers could see their mortgage repayments increase by 40 percent or more, with around 10 percent staring down the possibility of their repayments rising by 60 percent or more.

Don’t be complacent. Speak to us about how your mortgage compares to others and whether it still suits your financial situation and goals.

Property market snapshot

All dwellings Auctions / clearance rate Private sale
Monthly home value change

VIC 516 / 66% 910 ▼ 1.5%

NSW 270 / 69% 1136 ▼ 2.2%

ACT 35 / 63% 57 ▼ 1.1%

QLD 124 / 46% 979 ▼ 0.8%

WA 6 / 83% 630 ▲ 0.2%

NT 0 / 0% 37 ▲ 0.5%

TAS 1 / 100% 152 ▼ 1.5%

SA 66 / 80% 234 ▲ 0.4%

Need help understanding what this announcement means for you? Contact us today!

Dimuth Samarasinghe
Suite 3, 383 –385 Church Street | Parramatta NSW 2150
t. (02) 8011 1961 | 0415483088
e. [email protected]
w. www.falconhl.com.au

Falcon Financial Services Pty Ltd Australian Credit Licence Number: 391476 | ABN: 29137826709