Browse Forums Home Finance 1 Aug 14, 2009 1:24 pm I thought others might find this interesting! New home buyers should allow for higher rates β Stevens http://www.news.com.au/heraldsun/story/ ... 61,00.html ANYONE taking on a new mortgage should allow for at least a two percentage point increase in interest rates, the central bank says. This was not an endorsement of what might happen to the official cash rate in the future, but a general rule of thumb, Reserve Bank of Australia governor Glenn Stevens told a parliamentary hearing today. "It used to be the practice, I thought, that certainly banks test whether the borrower could cope with a two percentage point increase,'' Mr Stevens said during his regular six-monthly appearance before the House of Representatives economics committee in Sydney. "I don't know if they still apply that particular test, and I'm not endorsing two ... (but) lenders should be applying that test.'' Mr Stevens has indicated that the next move in interest rates will be up, but is reluctant to say when this might happen, and at what level he considers the "normal'' level of monetary policy. The official cash rate presently sits at a 49-year low of 3.0 per cent. "Interest rates right at the moment are unusually low ... but they won't stay that low indefinitely,'' he said. "It would always be prudent to be confident you could absorb some increase in interest rates when you are taking out a variable rate loan at any time, particularly now.'' Mr Stevens said that Australian house prices have declined in real terms in the past six years but they are still high against international comparisons. "Relative to mean income, dwelling prices have actually declined since the about the end of 2003," he said. "Not in a straight line, but basically they have come down a bit where they were unusually high at that time. "Prices remain, for a country of our size in physical size and the population we have, it still strikes me a little bit hard to explain why the price of dwellings are at the upper end of what you see internationally." Re: New home buyers should allow for higher rates 2Aug 14, 2009 2:06 pm I'm allowing for 9% within 2 years. That's why I'm forgoing a few luxuries to hammer down the loan quick while the going is good... Re: New home buyers should allow for higher rates 4Aug 14, 2009 6:47 pm we are already paiding 9.2 anyway as we have a fixed loan so a couple of percentage should be no problems.We have allow the 10% anyway. finished building 40 square home on 5 acres with perry homes.working on the landscaping just finished pool deck with ://forum.homeone.com.au/viewtopic.php?f=31&t=2217 Re: New home buyers should allow for higher rates 5Aug 17, 2009 12:32 pm It's always a good idea to allow for higher interest rates within the future. You may be able to afford to make the repayments on the lower interest rates at the present moment. Though the question that we always ask clients is that WHEN interest rates rise again (Not if they rise) can they afford to make the new payments. As what the other members that have posted on this posting it's always a good idea to calculated your repayments on 9.00% to 10.00% interest rates. That way you can get some comfort to know that you can still make the repayments on the higher interest rates. For example, if you have a Home Loan of $500,000.00 at an Interest Rate of say 5.10% Variable over a 30 Year term. The repayment would be $2,714.00 Per Month If the Interest Rate rose to 9.00% Variable the repayment would be $4,023.00 Per Month. As you can see its an additional $1,309.00 Per Month in Repayments. Both of these examples are based on a Principal & Interest Payment. This information is meant as a guide only. Trent Bartels Residential & Commercial Finance Broker A & B Financial Solutions ...Solutions for your future info@abfinancial.com.au http://www.abfinancial.com.au interesting situation what happened after builder issued final invoice? did you list as defect or not does the building surveyor have any responsibility? ie. issuing… 13 46866 i imagine you also have another contract with an architect? and yeah, whatever other's said about special conditions and appendices 16 15980 |