Loan Lounge blog

A Roadmap: How to Fast-Track Your First Home

Loan Lounge — Wed, 04 Feb 2026 05:29:29 GMT

If buying your first home is on your radar this year, you don’t need more opinions, but a clear plan.

Buying a home in Australia has a reputation for being complicated, expensive, and overwhelming. But it doesn’t have to feel that way. Here’s how to cut through the noise and move forward with purpose:

1. Lock In Your Numbers Before You Fall in Love

Before you start scrolling listings at midnight, you need clarity on your money. This step saves you wasted inspections, rejected offers, and buyer regret. Start here:

Your deposit:

Aim for 20% if possible, but if you’re not there yet, don’t panic. Many first home buyers use government schemes that allow deposits as low as 5%.

The real buying costs:

Budget for more than the purchase price:

Stamp duty
Conveyancing / legal fees
Building and pest inspections
Loan setup costs

Pre-approval = your licence to shop:

Pre-approval shows what a lender is willing to lend you and tells agents you’re a serious buyer and not just browsing.

2. Don’t Just Inspect, Investigate.

A fresh coat of paint can hide a lot of problems. Don’t get emotionally attached before the facts check out.

Protect yourself by:

Booking a professional building and pest inspection
Checking for structural issues, moisture, termites, and drainage
Looking beyond styling and asking:

Does this suit my lifestyle?
Will this still work in 3–5 years?
Is the location practical for work and daily life?

Good property decisions are made with logic first, emotion second.

3. Choose the Right Loan (Not Just the Lowest Rate)

The “cheapest” rate on a headline ad rarely tells the full story. The best home loan is the one that fits your lifestyle and manage money.

Features that matter more than you think:

Offset accounts (reduce interest while saving)
Redraw flexibility
Repayment options
Fee structures

This is where a mortgage broker becomes your shortcut. At Loan Lounge, we:

Compare multiple lenders (not just one bank)
Translate the fine print into plain English
Handle the paperwork and lender back-and-forth
Structure loans to support your long-term goals and not just today’s approval

You stay focused on finding the right home. We handle the complexity.

Some Key Terms You Need to Know

These terms get thrown around a lot, and here’s what they mean:

Offset account - A savings account linked to your loan where every dollar reduces the interest you pay, while keeping your money accessible.
Redraw flexibility - The ability to access extra repayments you’ve already made if you need cash later (rules vary by lender).
Repayment options - How often and how flexibly you can repay your loan, including extra repayments, weekly/fortnightly payments, or split loans.
Fee structures -The combination of ongoing, upfront, and conditional fees that can make a “cheap” loan cost more over time.

Your Next Move

Don’t walk into the market blind. Download our free guide: Tips for Buying Your First Home

It breaks down the buying process, key decisions, and practical next steps so you can move forward informed and prepared.

And if you’re ready for a personalised plan, the Loan Lounge team is here to help you move from “maybe one day” to “moving day.”

Can Nurses Really Buy their First Home with Just a 5% Deposit (or as Low as $30,000)? - Loan Lounge

Loan Lounge — Sun, 25 May 2025 14:00:00 GMT

Can Nurses Really Buy their First Home with Just a 5% Deposit (or as Low as $30,000)?

Can Nurses Really Buy their First Home with Just a 5% Deposit (or as Low as $30,000)?

As a mortgage broker working with nurses across Australia, I’m often asked:

“Is it really possible to buy your first home with just a 5% deposit?”

The short answer: Yes, it is.

And for many nurses in 2025, now is the perfect time to explore your options.

Why 2025 is a Great Year for Nurses to Buy

This year, the government has expanded key home loan support schemes like the First Home Guarantee, designed to make it easier for essential workers to step into the property market.

Here’s what’s changed:

Buy with as little as 5% deposit (as low as $30,000 depending on the property)
No Lenders Mortgage Insurance (LMI) for eligible nurses
Income cap $120,000 for a single and $200,000 for a couple so more nurses now qualify
Higher property price limits to match the real market

And just this month, the RBA cut interest rates for the second time in three months, reducing the cash rate by 0.25%. That means better loan conditions and greater borrowing potential for many buyers.

A Real Scenario: Emily, 29

Emily, a 29-year-old registered nurse earning $85,000 a year,
had saved $32,000 over several years while renting in Sydney. 
She assumed she'd need at least $100,000 to buy.

After speaking with us, she discovered she was eligible for the
First Home Guarantee and could buy with just a 5% deposit.

Property price: $580,000
Deposit needed: $29,000
Stamp duty: $0 (first home buyer exemption)
LMI: Waived under scheme
Total upfront costs: Approx. $31,000

Emily now owns her first home and kept thousands in
savings that would have gone to LMI, instead she
can buy the furniture she really like.

Why Nurses Are in a Strong Position

Lenders are increasingly supportive of nurses and healthcare professionals because of their:

Stable, in-demand employment
Reliable income, including overtime and shift penalties
Flexibility to work in regional or metro areas
We also offer a 90% no LMI for nurses who are purchasing an investment property or who are not buying their first home i.e. upgrading. Some conditions apply

As brokers, we work with lenders who understand how nurse income works, including casual and shift-based roles.

Helpful Tools to Get Started

Final Thought

You might be closer to buying your first home than you think.

Between low-deposit schemes, nurse-specific lender support, and the latest RBA rate cut, 2025 is shaping up to be an ideal time to step into the market.

Let’s talk about your options. Even if you’re just starting the journey, a quick conversation can set you on the right path.

Book your free chat today

Louise Chiu - Loan Lounge

Loan Lounge — Tue, 10 Dec 2024 13:00:00 GMT

Meet

Louise Chiu

Book a call

About Me

Louise is a seasoned finance and tax professional dedicated to finding tailored solutions for her clients. Her passion lies in helping clients achieve their financial goals with clarity and confidence.

As a finance and mortgage broker, Louise is equipped to assist with a variety of lending needs, whether you’re a first-time homebuyer, an experienced investor, a business with complex financing requirements, or seeking development loans.

Louise began her career at one of the Big 4 accountancy firms and has since held senior positions in corporate environments. Her love for numbers and deep understanding of business and financing needs led her to transition into finance and mortgage broking. Louise recognizes the complexities of lending and is committed to providing practical lending solutions that are sensible and tailored to each client’s unique needs. She firmly believes that effective financial management is crucial for everyone, whether it’s leveraging finance to grow a business or build equity.

Louise holds a Bachelor’s degree in Accountancy and is a Chartered Accountant with Chartered Accountants Australia & New Zealand (CAANZ). Additionally, Louise is a qualified and experienced broker with a Diploma in Finance and Mortgage Broking and is accredited by the Mortgage and Finance Association of Australia (MFAA).

Louise can speak both English, Cantonese & Mandarin

I'm In The Area!

Bella Vista, NSW 2153

I Specialise In

Residential Loans

SMSF

Development Loans

Commercial Loans

First Home Buyers

Self-Employed Lending

Want To Book An Appointment With
Louise Chiu?

(02) 6188 6482

9:00am-6:00pm AEST (weekdays)

14 Lexington Dr, Bella Vista NSW 2153

louise@theloanlounge.com

Get in Touch

Testimonials

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Fantastic service. Very responsive and helpful. Appreciate hand holding us throughout the whole process with a positive outcome. Thank you! - Ken

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Working with Nathanial from Loan Lounge was a breeze. The process was smooth. We would happily recommend him and the Loan Lounge team to anyone looking for a mortgage broker. You wont be disappointed. - Bianca Bryson

Highly recommend this team!

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The team have been awesome

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Thank you for your guidance!

The team at Loan Lounge are very friendly, helpful and ensured my loan journey was seamless. They provided me with progress updates of my loan application and took any worries away. Thank you, Loan Lounge, for your guidance and help. I would highly recommend you to anyone who needs to sort out their mortgage. - Mez M

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How much has your home’s value risen by? - Loan Lounge

Loan Lounge — Tue, 03 Sep 2024 14:00:00 GMT

How much has your home’s value risen by?

We’ve all heard the rule of thumb about property being a long-term investment. Well, get this: many home owners have seen the value of their property quintuple within the timeframe of a typical 30-year mortgage.

Ask any long-term home owner what they originally paid for their property, and chances are they’ll respond with an eye-wateringly low figure.

Plenty of Australians look back on the price they paid for their home and marvel at how low it seems relative to current values – often while breathing a sigh of relief that they bought when they did.

This is not a recent trend.

Property has a strong track record for growth

Fun fact: over the last 100 years, residential property values in Australia have risen by an average of 10.9% annually.

Sure, there can be short term dips and periods when values plateau, but the broader trend has been upwards.

In dollar terms, this price growth can be mind-boggling.

Take Sydney, for instance, where the median house price back in mid-1992 was $221,770. Thirty years later, in 2022, the median value was $1,124,421. Today, it is $1,473,038.

It’s a similar story across all our major cities.

But what if you purchased more recently? What sort of increase in value has your home seen?

How much have home values increased since you purchased?

CoreLogic delved into the history books to see how national property values have risen since the year of purchase, starting with the mid-90s.

Looking at the results below, it’s pretty clear that the longer you’ve owned your home (or investment property), the bigger the potential rise in value.

Buyers who purchased about 30 years ago in 1995 could find their property is now worth more than five times what they originally paid thanks to a 437% increase in value.

If you purchased about 20 years ago back in 2005, your home may have jumped in value by 148% (2.5 times more than you bought it for).

Closer to the present, homes purchased in 2020 may have seen a 34% rise in value.

And even if you purchased your home last year, you may have already notched up capital growth of 4%.

Increase in national home values since year of purchase

1995: 437%
2000: 308%
2005: 148%
2010: 94%
2015: 57%
2020: 34%
2023: 4%

Source: CoreLogic article. Direct link to graph here.

Why a rise in your home’s value matters

A rise in your home’s value is worth much more than bragging rights at your next barbecue.

Increasing property values are a key source of household wealth in Australia.

Better still, a rise in your home’s value can make it easier to refinance to a more competitively-priced home loan, or provide the equity to invest in a rental property or achieve other personal goals such as funding your kids’ education.

Talk to us to start your property journey

The upshot is that when you buy a home – either as a first home buyer or upgrader – it’s worth keeping one eye on the future.

With the passage of time, the price you paid today can start to look like a better deal than it felt at the time, and you could be grateful you purchased when you did.

Call us today to find the home loan that helps you get started on your property journey, or to unlock equity in your current property.

Why three-in-four Aussies turn to a broker for home loan help - Loan Lounge

Loan Lounge — Wed, 05 Jun 2024 14:00:00 GMT

Why three-in-four Aussies turn to a broker for home loan help

You might have seen a headline or two about a particular big bank being at war with brokers. Nothing could be further from the truth. Our mission is – and always will be – putting you first. That’s why three in every four borrowers now come to us for help.

Borrowers are more spoilt for choice than ever before when it comes to home loans.

But who has time to sort through over 100 lenders in the market to pick out a loan that’s suited to your needs?

Your mortgage broker does.

But for the big end of town, increased competition can mean lower profit margins (and unhappy shareholders!).

That doesn’t mean brokers are at war with any particular bank though, as a few articles stated in the Australian Financial Review over recent weeks (here’s a great non-paywalled response).

As Mortgage and Finance Association of Australia (MFAA) CEO Anja Pannek succinctly put it: “Positioning banks as competing with brokers is like saying Hilton hotels is competing with travel agents, instead of Hyatt and Sofitel. It completely misrepresents how the mortgage broking industry works”.

What brokers do is streamline the home loan process. It’s just one of the reasons why mortgage brokers are the go-to choice for 74.1% of home buyers (and that figure has been steadily increasing!).

But our role isn’t just about helping you find a competitively-priced home loan with the features you may need.

We go much further.

Here are three other ways you can benefit from the support of a mortgage broker.

We work in your best interest

Behind the friendly face of your mortgage broker is a serious legal obligation.

We are bound by a Best Interests Duty.

It means we are required by law to always put your best interests first, providing home loan options that are based on your unique needs.

That matters because if a loan isn’t the right choice for you, it may not save you money in the long run, no matter how low the rate is.

Banks are not bound by the best interests duty.

Brokers can help guide the way

Buying a home is possibly the biggest purchase you’ll ever make.

It’s also something you’ll probably only do a handful of times over your life. But this is something we help people through every day.

We can act as a trusted guide to help you navigate the complex process of buying a home with confidence.

We can also help you assess your borrowing capacity, so you can buy with confidence, and we can explain where you can consider making shifts in your budget to become home loan-ready sooner.

And because we’re focused on making things more straightforward for you, we take the jargon out of home buying – we can help you get your head around complex issues like lenders’ mortgage insurance, or how to prepare if you’re buying at auction.

It’s all about mentoring our customers at every stage of their property journey.

We’re here for the long term

You and your home loan are likely to be together for a while. And we’ll be right there with you.

Our regular home loan reviews provide reassurance that your loan continues to be the right option for you, even as your life changes and evolves.

And when you’re ready to kick new goals – from renovating, to buying your next home, investing in a rental property, or simply refinancing – we’ll be ready to help guide you through the process.

Like to know more about how we can help? Call us today and discover why three out of every four Australian families come to a broker first.

How to manage your home loan over Christmas - Loan Lounge

Loan Lounge — Tue, 21 Nov 2023 13:00:00 GMT

How to manage your home loan over Christmas

It may be called the silly season but a few smart strategies could help you enjoy the festive season this year without missing a beat on your home loan. Check out our tips to share the Christmas cheer this year without breaking the bank.

Store shelves are starting to be lined with tinsel, ‘Santa stop here’ signs are popping up around the neighbourhood, and chances are you’re beginning to hum a few bars of Jingle Bells.

Yes, Christmas is just around the corner, and now’s the time to plan for what can be a pricey time of year.

After 13 rate hikes in close succession, plenty of homeowners are feeling the squeeze of higher home loan repayments.

The good news is that you (hopefully) won’t have to cancel Christmas this year. Below are three clever hacks that could help you manage your mortgage over the festive season.

1. Follow Santa’s lead – make a list (or two)

Plan ahead by listing all the fixed expenses you’ll face in December such as utilities, your home loan, car loan, and credit card repayments, as well as less frequent bills such as council rates that may fall due before Christmas.

Add up the total to know how much you need to set aside. It’s a good idea to try and prioritise these bills over seasonal spending.

Next, draft up a Christmas spending budget that allocates money to gifts, food, drinks and decorations.

Finetune your budget based on your ability to pay, bearing in mind the upcoming costs you identified in the bill list.

If things are looking tight this year, consider opting for Secret Santa instead of everyone buying everyone a present.

It can help make the giving experience more personal and is definitely gentler on the hip pocket.

Websites like elfster.com can help keep it anonymous and straightforward for everyone.

2. Plan for how you’ll pay

It can be tempting to pay for Christmas purchases with a credit card or buy now, pay later. But these options can just mean kicking the can down the road until January when payments fall due.

It’s also worth noting that late payments on either option could affect your credit score for any future home loan applications.

So where possible, consider reaching for your debit card for festive purchases. It’s hard to get into too much trouble when you pay using your own money.

3. Ask your lender for a gift

Christmas is the season of giving, so why don’t we hit up your lender for the gift of a lower interest rate?

Reserve Bank data shows there is still a gap between the rates on new versus established loans.

If you took out your loan through us, get in touch and we can either reach out to your lender on your behalf for a discount or, if they don’t come to the party, help you explore your refinancing options with another lender.

Don’t let Christmas spending ruin your home loan plans for 2024

It’s easy to get swept up in seasonal good cheer. But it can sometimes be important not to get too carried away with Christmas spending.

If you plan to refinance your home loan or purchase a house in 2024, a lender will likely look at your spending patterns over the past few months.

Hamming up your purchases in December can bump up your average living costs, and if you go way over the top, potentially see you knocked back for a new loan in the new year.

Want more tips to manage your mortgage over the holiday season? Call us today for more festive saving strategies.

The one big factor pushing house prices up - Loan Lounge

Loan Lounge — Wed, 04 Oct 2023 13:00:00 GMT

The one big factor pushing house prices up

Property prices have soared almost 7% this year alone. With the upswing predicted to continue, we unpack what’s driving national housing values higher – and why it could pay to get into the market sooner.

Another month, another round of price upticks.

September marked the eighth consecutive month of home price growth, with CoreLogic saying property values nationally are up 6.6% since January.

That’s a solid price hike. The crazy thing is that prices are soaring despite a whole slew of interest rate hikes over the past 18 months.

So what’s pushing prices higher?

The key factor putting a rocket under property prices is a shortage of homes listed for sale.

Homeowners are sitting tight rather than selling across a number of cities, and that’s increasing competition between buyers.

According to CoreLogic, Adelaide, Brisbane and Perth have particularly low levels of homes for sale – around 40% less than previous 5-year averages.

There’s a bit more choice for buyers in Sydney and Melbourne, but both cities are still recording housing price gains (Sydney in particular).

That’s because rising prices aren’t just about a lack of homes listed for sale.

Record levels of net overseas migration are also a contributing factor.

In the year to March 2023, net overseas migration added 454,400 people to our population. That’s an extra 1,245 people each day, all looking for a home.

And according to ABS data, most immigrants settle in Sydney and Melbourne.

So as you can see, despite high interest rates, there’s upward pricing pressure on the nation’s five biggest capital cities (Hobart, Darwin and Canberra meanwhile have all seen house prices drop over the past 12 months).

Will values go higher?

At the current rate of growth, CoreLogic predicts we could see national housing values reach new highs as early as November.

Already, homes in Perth and Adelaide have smashed previous price records, notching up median values of $618,363 and $691,591 respectively in September.

Brisbane homes look set to reach record values in October, with the city’s current median home value ($761,379) just 0.6% below the previous peak.

What does this mean for home buyers?

As home prices nudge towards new highs, PropTrack says last year’s price falls have been completely reversed.

And most of the data suggests that prices are unlikely to take a tumble any time soon.

That’s because it’s possible that interest rates have peaked, population growth is rebounding strongly, and there is a shortage of new home builds.

Already we’re seeing a surge in home loan applications as more Australians recognise the current market provides a window of opportunity to buy before values rise higher.

No matter whether you’re buying a first home, second home or investment property, buying today could help you beat future price hikes.

So if you’ve got your eye on the property market, call us today and we can help you assess your borrowing power in the current climate, and even help line you up with pre-approval so you’re ready to strike when the opportunity arises.

3 ways pre-approval can give buyers an edge - Loan Lounge

Loan Lounge — Tue, 19 Sep 2023 14:00:00 GMT

3 ways pre-approval can give buyers an edge

There’s a lot to be said for having your home loan pre-approved. But does pre-approval mean you’re putting the cart before the horse? Definitely not. Here are three ways pre-approval can help you get ahead of the competition.

Here’s a handy tip: you don’t have to wait until you’ve found a home you’d like to buy before making mortgage enquiries with a lender.

It’s possible to have a home loan pre-approved before you’ve even started to wear out shoe leather at open home inspections.

It can mean you’re ready to go with your loan, with only a few formalities to sort out, as soon as you’ve found the right place.

Even better, pre-approval doesn’t mean you’re committed to taking out a loan. It’s not a problem if you have a change of plans.

Here are three ways home loan pre-approval can put you in front in today’s market.

1. Pre-approval gives you a budget to stick to

When it comes to a major step like buying a home, there’s no room for guesswork.

With a pre-approved home loan, you know exactly how much you can borrow, and that’s the foundation for your home-buying budget.

It means you can focus on homes within your price range, and make an offer with confidence.

Pre-approval is especially important if you plan to bid at auction. It sets a clear line in the sand for your highest bid.

2. You can act fast

In today’s market, homes are selling in turbo-charged timeframes.

Figures from CoreLogic show the median selling time across our capital cities is just 27 days. That’s less than a month!

So you need to act fast to avoid missing out. Sellers might not wait around while you head to the bank to see if you qualify for a home loan.

Having pre-approval in place means you can get the ball rolling as soon as you find the right home, without getting pipped by a more organised buyer.

3. Pre-approval can show you’re a serious buyer

Nothing says ‘genuine buyer’ like home loan pre-approval.

Don’t be shy about letting real estate agents know your loan is pre-approved. It adds clout to your negotiations and gives vendors confidence that you have the finance to follow up any offer you make.

Just consider keeping some information up your sleeve, such as how much you’ve been pre-approved for.

After all, the real estate agent’s goal is to get the best price for the vendor, not the buyer!

How reliable is pre-approval?

Home loan pre-approval is not a guarantee that you’ll get a home loan.

You won’t get the green light for sure until you’ve found a place to buy, and the bank has checked that the property meets their lending criteria.

Your lender will also want to see that your personal finances haven’t changed since your loan was pre-approved.

It’s also worth keeping in mind that while there aren’t many downsides to obtaining a single pre-approval, getting too many over a short period of time with multiple lenders can potentially negatively impact your credit score and ability to take out a loan – as lenders might suspect you’re financially unstable.

Which pre-approval is better?

Home buyers are often surprised to learn that pre-approval isn’t available with every lender.

Even among banks that do offer this service, not all pre-approvals work the same. One sort is especially worth aiming for.

You may come across two types of pre-approvals:

1. System-generated pre-approvals

This sort of pre-approval is generated by a lender’s computer based on the information you enter about yourself.
You can get a result quickly this way. The catch is that the analysis isn’t thorough, making the outcome unreliable.

In particular, if any of the details you enter are incorrect, the bank’s IT system may wrongly say you don’t qualify for a home loan.

2. Fully assessed pre-approvals

As the name suggests, this type of pre-approval involves your bank’s credit team taking a close look at your finances, credit score and other personal and financial details to be sure you can comfortably manage a home loan.

A full assessment takes more time, but it’s worth the wait. It can help you feel more confident that you’ll be offered a home loan when you find your ideal property.

Want to find out more about pre-approval?

If you’re looking to buy a home and want to get an edge over the competition (to put in an early offer, for example), then pre-approval might be a much-needed ace up your sleeve.

We can help you work out which lender and which loan product is a good fit for your pre-approval situation.

So call us today to take the guesswork out of home loan pre-approval, and give yourself a head start over other buyers in the market.

Property valuation: what you need to know when buying a home - Loan Lounge

Loan Lounge — Wed, 17 May 2023 14:00:00 GMT

Property valuation: what you need to know when buying a home

When buying property, it’s good to know the market value. After all, you want to know you’re paying a fair amount. But the property’s value is an important consideration for your lender too. And their valuation may be quite different.

Just how much is a property worth? Well, it depends on who’s asking.

When buying a property you’ll find there are different terms to estimate how much it’s worth, including market value, market appraisal and bank value.

And you’ll most likely find they can differ, which can be confusing.

Fortunately, we’ve got the low down to help you understand the difference. And how bank valuations affect your loan.

Market valuations vs market appraisals vs bank valuations

So, what is the difference between them all?

A market valuation, which is usually undertaken by a professional and qualified valuer, gives an estimate of the expected sale price of the property on the open real estate market.

It’s based on current market trends and is valuable to both sellers and buyers during sale price negotiations.

It can also be conducted for tax purposes for owners (ie. to calculate the taxable capital gain or capital loss).

A market appraisal (aka market estimate), on the other hand, is usually completed by a real estate agent and is often done to give homeowners an idea of how much their property could sell for in the current market.

But a bank valuation has an entirely different purpose.

When you’re buying a home or refinancing your loan, the bank will often need to conduct a bank valuation.

And it can feel like a real sting if the bank valuation comes in lower than expected.

But there’s a reason for this.

Banks are in the risk mitigation business. So their valuation is designed to provide an estimate of the property’s sale price as security against your loan should you default.

The valuations can be more conservative because lenders don’t take into consideration the property’s value in terms of an investment.

They’re looking at the property in terms of recouping loan costs with a quick sale.

And, rather than being provided by a real estate agent who may have a vested interest in price, bank valuations must be conducted by an accredited valuer.

Bank valuation process

When conducting a bank valuation, typically, the following factors are considered by the appraiser:

Current market conditions – just like with a market valuation, the current market climate and recent sales data for your area are examined.

Physical attributes – the location of the property, surrounding amenities, its layout, fixtures and features, size, structural condition, and council zoning information are considered.

Upon completion of the valuation, a report is provided to the lender to be used in assessing your loan application.

This brings us to our next point.

Pitfalls to watch out for

They say that being forewarned is forearmed. So here are some pitfalls to be aware of when it comes to bank valuations.

Say you apply for pre-approval, find a place and make an offer, but then the bank valuation is a lot less.

Or you pay a deposit on a $700,000 off-the-plan property, only to have your bank come back with a $650,000 bank valuation when it’s time to move in.

If the bank valuation is less than expected, it may lead to the bank loaning you less than you hoped for.

You may need to come up with extra funds to close the gap or pay lenders mortgage insurance (LMI), which can cost thousands of dollars.

Alternatively, your loan application could be rejected outright.

Therefore, it’s a good idea to save up a bit of a buffer to handle any valuation headaches that may crop up.

Working with an experienced broker, like us, can help you to prepare for any nasty surprises and make for a smoother home-buying journey.

Find out more

If you’re on the hunt for the perfect home, let us help you track down the right loan and lender for you.

We’ll be there every step of the way to help you navigate the loan process with ease, and help get the keys in your hand.

Homeowners brace as RBA raises cash rate to 3.85% - Loan Lounge

Loan Lounge — Mon, 01 May 2023 14:00:00 GMT

Homeowners brace as RBA raises cash rate to 3.85%

The Reserve Bank of Australia (RBA) has increased the official cash rate for the 11th time in the past year, taking it to 3.85%. Have we finally reached the peak of this cycle? And how much will this latest rate hike increase your monthly repayments?

In what will undoubtedly be tough news for many households around the country, this latest rate hike comes despite many pundits predicting the RBA would keep the cash rate on hold for at least another month.

RBA Governor Philip Lowe said while inflation in Australia had passed its peak, at 7% it was still too high and it would take some time before it was back in the target range of 2-3%.

“Given the importance of returning inflation to target within a reasonable timeframe, the Board judged that a further increase in interest rates was warranted today,” he said.

However, in what may come as welcome news to mortgage holders, Governor Lowe softened his language around the possibility of further rate hikes.

“Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will depend upon how the economy and inflation evolve,” he said.

How much could this latest hike increase your mortgage repayments?

Unless you’re on a fixed-rate mortgage, the banks will likely follow the RBA’s lead and increase the interest rate on your variable home loan very shortly.

Let’s say you’re an owner-occupier with a 25-year loan of $500,000 paying principal and interest.

This month’s 25 basis point increase means your monthly repayments could increase by almost $75 a month. That’s an extra $1,060 a month on your mortgage compared to 3 May 2022.

If you have a $750,000 loan, repayments will likely increase by about $112 a month, up $1590 from 3 May 2022.

Meanwhile, a $1 million loan will increase by about $150 a month, up about $2,130 from 3 May 2022.

What happens if the cash rate increases further?

Economists at the big four banks are forecasting that the cash rate will now either remain at 3.85% or have one more hike to 4.10%.

Assuming you’re an owner-occupier with a 25-year loan, here’s how much more you could be paying each month if the cash rate reaches 4.10%:

– $500,000 loan: approximately $75 more = up $1135 from 3 May 2022, to a total of approximately $3,470 per month.

– $750,000 loan: approximately $112 more = up $1702 from 3 May 2022, to a total of $5,200 per month.

– $1 million loan: approximately $150 more = up $2280 from 3 May 2022, to a total of $6,950 per month.

Worried about your mortgage? Get in touch

There’s no denying that a lot of households around the country are feeling the pain of these rate rises.

There are also lots of people on fixed-rate home loans wondering just what options will be available to them once their fixed-rate period ends.

Some options we can help you explore include refinancing (which could involve increasing the length of your loan and decreasing monthly repayments), debt consolidation, or building up a bit of a buffer in an offset account ahead of more rate hikes.

So if you’re worried about how you might meet your repayments going forward, give us a call today. The earlier we sit down with you and help you make a plan, the better we can help you manage any further rate hikes.