There are many factors that contribute to making the decision to build a house, but underpinning all other decisions should be your financial security.
If you’ve been paying attention to the news lately, you’ll know that interest rates are now at a record low after the Reserve Bank of Australia cut them earlier this month.
With rates at 1.75 per cent, the banks are beginning to pass along the cuts, meaning there’s never been a better time for you to build, whether it’s your first home or a new home.
Which banks are cutting interest rates?
The big four banks – National Australia Bank (NAB), Commonwealth Bank of Australia, Westpac Banking Corp and Australia and New Zealand Banking Group (ANZ) – have all agreed to cut variable home loan rates. Starting this month, these banks will begin rolling out their all-time low rates, check out when your bank’s cuts will take effect here.
What you’ll save
According to Canstar, the typical homeowner will save $72 a month on a $500,000 loan. This brings the average standard variable home loan rate down to 4.52 per cent. For those taking a $300,000 home loan, the cuts will push the variable home loan rate down to 4.4 per cent, introducing a saving of $44 a month.
Now, these savings may not seem like much, but they definitely allow extra breathing room for the bulk of home buyers who are looking to have a larger mortgage. For those who are first home buyers, these savings mean repayments will be similar to rental payments, meaning you won’t be paying “ridiculously above what (you’re) paying in rent” for your repayments.
Things to consider
There’s a few things to consider before diving in. Although the rates are low now, it’s inevitable the rates will fluctuate. While it is possible rates will continue to drop, they will eventually rise. First home buyers should make sure that they can afford repayments even if the rates were to rise.
If you want to make the most of the all-time low interest rates, now’s the time to start talking to Achieve Homes about securing your new home. Achieve Homes offer a whole range of home designs and house and land packages fit for almost any budget.
Disclaimer: This information does not constitute financial advice and you should speak to a qualified financial advisor and your bank about your individual financial circumstances before buying a property.