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Leapfrog Mortgage and Finance

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Perth, WA
Leapfrog Mortgage and Finance

Specialist broker to find you the most suitable loan for your home or investments. Specialist broker to find you the most suitable loan for your home.

20/10/2022

Spending streak hits 18 months - what the heck, this is crazy stuff!

In a mixed blessing for the economy, consumers are spending heavily, according to new data from the Australian Bureau of Statistics.
Household spending in August was 29.0% higher than the same time last year (when parts of Australia were in lockdown). That was the 18th consecutive month of year-on-year increases.
On the one hand, all this spending supports the economy – which explains why the unemployment rate has fallen to just 3.5%.
On the other hand, the reason the Reserve Bank has been raising the cash rate has been to rein in spending – so strong spending data might encourage further rate rises.

19/10/2022

Hello friends. If you receive a message and my picture from someone pretending to be me and asking to be friends you know it's not me. I would not be doing that. What is it with these people?

12/10/2022

Borrowers refinancing to lower-rate loans

Home loan refinancing activity has hit record levels.

Borrowers refinanced a record $18.9 billion of home loans in August, according to new data from the Australian Bureau of Statistics.

That included $12.8 billion of owner-occupied loans (a record) and $6.1 billion of investment loans (the second-highest month on record).

Why are so many Australians refinancing right now?

Because with interest rates rising, borrowers know it’s vital to consult a mortgage broker about potentially switching to a lower-rate home loan.

If you haven’t spoken to a broker recently, now would be a very good time.

12/10/2022

October RBA raises rates by 0.25 percentage points - what does this mean in a graph!

The Reserve Bank of Australia has increased the cash rate for the sixth consecutive month – but this time there’s been a twist.

Over the past six months, the RBA has raised the cash rate from 0.10% to 2.60%:

* In month one, there was an increase of 0.25 percentage points
* In months two to five, there were increases of 0.50 points
* Now, in month six, the increase has been dialled back to 0.25 points

Why? Possibly because the RBA believes we’re near the end of this rate rise cycle.

More rate hikes are almost certain, with the RBA revealing it "expects to increase interest rates further over the period ahead". But there might not be many more hikes to come

30/09/2022

The link between rates and prices - ever wondered about this? Certainly the news headlines don't always portray the correct story.

It’s not true that rising interest rates automatically lead to falling property prices.

For proof, look at this graph from the Reserve Bank of Australia. As you’ll see, there have been times when:

* Interest rates and property prices simultaneously increased
* Interest rates and property prices simultaneously decreased

Of course, there have also been times when as rates have gone up prices have gone down, and vice versa.

The moral to the story is not that interest rate changes don’t affect property prices – because they do have some impact. Rather, it’s that rates are just one of a number of factors that affect prices.

16/09/2022

Oh no, another unemployment statistic came out this week. Do you find these confusing? Perhaps this will help.....

The unemployment rate rose from 3.4% to 3.5% in August, according to the Australian Bureau of Statistics – despite an increase in the number of people in work.

During August, 33,500 people found work while only 14,000 people lost work.

So why did the unemployment rate increase? Because the share of adults who either have a job or who are actively looking for one also increased, from 66.4% to a near-record 66.6%.

(The unemployment rate doesn’t measure the share of people without a job; it measures the share of people without a job who are actively trying to find one.)

When the number of people entering the labour force is greater than the number of jobs created, the unemployment rate increases – as it did in August.

So this unemployment data is actually positive. The unemployment rate remains incredibly low and there are now more people in the workforce, making it slightly easier for the many understaffed businesses to find employees.
I hope that makes it a little clearer? Here is the graph to further confuse......

11/09/2022

Cash rate rises to 2.35% - some perspective please!

The Reserve Bank of Australia has increased the cash rate for the fifth consecutive month.

During that time, the cash rate has increased from 0.10%, a record-low setting, to 2.35%, which is still low by historical standards.

In a statement announcing the cash rate decision, the RBA board signalled it would make several more cash rate increases.

“The board expects to increase interest rates further over the months ahead, but it is not on a pre-set path,” it said. “The size and timing of future interest rate increases will be guided by the incoming data and the board's assessment of the outlook for inflation and the labour market.”

As the cash rate increases, so will home loan rates, which is why so many people right now are speaking to mortgage brokers about refinancing. Switching to a comparable loan at a lower interest rate could save you thousands of dollars per year.
It’s not a comfortable thing to see mortgage repayment increases as we have now but take a moment to study the graph in it’s true context!

04/09/2022

Australians showing strong preference for brokers.

Consumers are using mortgage brokers in record numbers, according to new data from research group Comparator.

Brokers originated 68% of new home loans between April and June, which was a record for the June quarter.

That 68% market share is a big increase on the 59% share recorded the year before and the 57% share the year before that.

Now that more than two in three Australians are using brokers when they take out a home loan, that means fewer than one in three people are going directly to a lender.

That’s not surprising, because when you go to a lender, you receive information only about that institution's products – even if another lender is offering a comparable loan at a much lower interest rate. But when you go to a broker, the broker compares the market on your behalf, which means you're far more likely to get a great loan for your personal situation.

31/08/2022

House price panic: How inaccurate forecasts instil anxiety...have a read of this blog from Michael Russell in Mortgage Business.
https://www.mortgagebusiness.com.au/property/17135-house-price-panic-how-inaccurate-forecasts-instil-anxiety?utm_source=MortgageBusiness&utm_campaign=31_08_22&utm_medium=email&utm_emailID=afe816ea2ab8bf240d6fb5e773dba3e29d43d2478863d4f590feebddf6cbff72

27/08/2022

Here is a little snippet to ensure we keep our feet on the ground with all the negative news out there with finance and property.....
Property prices tend to rise over the long-term.

Historically, property prices in Australia have risen over the long-term, despite periodic downturns.

Between May 2009 and August 2022 – the period covered by the graph below – the average price being asked by an Australian vendor has jumped 74.1%, from $414,281 to $721,456, according to SQM Research.

(Asking prices tend to be a little higher than final selling prices. But they tend to move at a similar trajectory.)

As the graph shows, there have been a series of price falls along the way. At the time, they felt significant. But when you zoom out and take a longer-term view, they look insignificant.

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