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					  <title><![CDATA[Interest Rate News - February 2010]]></title>
					  <link>http://www.negotiator.com.au/blogs/37/Interest-Rate-News---February-2010.html</link>
					  <description><![CDATA[
As we saw from this month, it just goes to show that no-one other than the Reserve Bank really know what is going on with rates. Almost every forecaster, finance commentator and anyone with an interest was predicting rates would go up this month. 
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However, it seems the RBA has used common sense and has decided to leave rates on hold. Maybe the turmoil on the international and local stock markets over the past couple of weeks helped with their decision to &#8216;wait and see&#8217;.
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Good news for now, but expect further rises throughout the year and&#160; prepare to build up your savings in your offset accounts. Most economists seem to think that over 2010 rates will rise in the vicinity of 1% but that remains to be seen. How and when the rises come will be for the RBA&#8217;s discretion. The faster the economy grows the faster the rises will come. Given that we still have relatively low rates it is not realistic to expect they will stay there. Another indicator is that fixed rates are already WELL above variable rates and the property market continues to power ahead.
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Anyhow, good news for now so we should enjoy it while we can and I think the future is very exciting for Australia.]]></description>
					  <author>Gregg Mountford</author>
					  <pubDate>Thu, 18 Feb 2010 00:00:00 WST</pubDate>
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					  <title><![CDATA[Interest Rate News - January 2010]]></title>
					  <link>http://www.negotiator.com.au/blogs/35/Interest-Rate-News---January-2010.html</link>
					  <description><![CDATA[The Reserve Bank of Australia do not meet in January, therefore the interest rates remain as they did in December 2009.It was stated last year that the Australian economy would stumble and decline in 2009 and property prices would decrease. These predictions did not come true. In fact, right across Australia, property prices experienced good capital growth in 2009 and should have a strong year in 2010 with 5-10% growth on average, predicted by many economists and higher growth rates in premium locations.The majority of economists are predicting a better year in 2010, in terms of capital growth and whilst we can expect to see an increase in interest rates throughout the year this will be offset with the anticipated &#34;housing boom&#34; to meet the increasing backlog of housing and demand from increasing immigration.The key challenges remain on the cost of funding, availability of funding/credit and the ongoing dominance of the major banks. Hopefully we will start to see some easing on available credit when confidence comes back into the &#34;securitization market&#34; later in the year.As always, no point in focusing on things we cannot control but rather those things we can control.]]></description>
					  <author>Gregg Mountford</author>
					  <pubDate>Fri, 29 Jan 2010 00:00:00 WST</pubDate>
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					  <title><![CDATA[Interest Rate News - December 2009]]></title>
					  <link>http://www.negotiator.com.au/blogs/34/Interest-Rate-News---December-2009.html</link>
					  <description><![CDATA[
The Reserve Bank met this month and I&#8217;m sure you&#8217;ve heard that they raised rates by another 0.25%. This was generally as expected as they tend to have several quick rises in a row for shock value. The good news however is twofold.
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One, rates are still well below what they were only a short 2 years ago and second, the Reserve Bank don&#8217;t meet again until February.
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Small rises now will actually help keep rates from rising out of control later.
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I would like to take this opportunity to wish all Negotiator clients and friends a happy and safe festive season and happy new year. It&#8217;s been an absolute pleasure organising your finance and helping you build your wealth in 2009. Looking forward to seeing what 2010 brings.]]></description>
					  <author>Gregg Mountford</author>
					  <pubDate>Sat, 05 Dec 2009 00:00:00 WST</pubDate>
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					  <title><![CDATA[Interest Rate News - November 2009]]></title>
					  <link>http://www.negotiator.com.au/blogs/32/Interest-Rate-News---November-2009.html</link>
					  <description><![CDATA[
Another month goes by and the Reserve Bank has lifted the official interest rate by 25 basis points - marking the fourth time in a row it has altered rates on Melbourne Cup day. The market had expected this decision as the economy continued upon its road to recovery.
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I know it is hard to mentally accept, but this is actually good news for the economy in general. As I said last month rates simply could not remain at the extremely low levels they have been at. Overall if we look back, only around 12&#160;to 18 months, rates were 8 to 9%. Still way above where they are today so in comparison we are still in a very good position. If rates were kept at recent lows for too long we would all pay in the end with rates having to be moved much higher to rein in an economy that would be over stimulated. By raising rates now the RBA hopes to keep rates in check over a much longer period and avoid rates going too high.
&#160; 
It seems the world is slowly coming out of the financial crisis it has been in over the last couple of years and Australia seems to have weathered the storm better than most. Hopefully you have been able to take advantage of the recently low rates to build up your buffer funds in your offset accounts. Remember that any extra savings you have in your offset account will save on interest payments on your home loan. 
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The question on everyone&#8217;s lips seems to be &#8216;How high will rates go?&#8217;. While I do not have a crystal ball, the general consensus from the majority of economists I hear is that we could see a rise of around 1 to 1.5% in total over the next year or so which would take standard variable rates into the low to mid 7% range. This is still a very good rate in reality. Really however, only time will tell and a lot will depend on how well the world economy is really recovering.]]></description>
					  <author>Gregg Mountford</author>
					  <pubDate>Mon, 16 Nov 2009 00:00:00 WST</pubDate>
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					  <title><![CDATA[Interest Rate News - October 2009]]></title>
					  <link>http://www.negotiator.com.au/blogs/31/Interest-Rate-News---October-2009.html</link>
					  <description><![CDATA[
Well, it had to happen sooner or later, although this was still somewhat unexpected by many. The Reserve Bank decided to lift variable interest rates by 0.25%. This will be quickly passed on to all borrowers by lenders.
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While rising interest rates are never pleasant we must look at how low rates still really are - traditionally rates under 10% have been thought of as low in the past. This rise will largely be for shock value and to try and stop the economy going from recovery to overheated too quickly. A lot of economists are saying we could see another 0.25% before Christmas but only time will tell. I have attached the link to the RBA media release after the meeting in case you would like to read it. At least this is straight from the Reserve Bank without all the media hype.
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http://rba.gov.au/MediaReleases/2009/mr-09-23.html ]]></description>
					  <author>Gregg Mountford</author>
					  <pubDate>Mon, 19 Oct 2009 00:00:00 WST</pubDate>
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					  <title><![CDATA[Interest Rate News -September 2009]]></title>
					  <link>http://www.negotiator.com.au/blogs/30/Interest-Rate-News--September-2009.html</link>
					  <description><![CDATA[
Another month goes by and it still seems that every minute of the day we are being bombarded by what interest rates may or may not do in the near or distant future.
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At this month&#8217;s meeting the Reserve Bank has decided to leave rates on hold yet again.
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But, for how long? No one really knows and even though people have an opinion one way or the other, they are just that, opinions. Only the future can tell who will be right and who will be wrong and the truth probably will lie somewhere in the middle of all those wonderful &#8216;Opinions&#8217;.
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That said, I think we can safely conclude that at some point in the future interest rates will go up from their current historic lows. 
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So should you fix or should you not? It really depends on everyone&#8217;s individual situation But I will give my opinion, and I reiterate it is a PERSONAL OPINION ONLY. But hopefully one reason you all deal with me is that you know I speak what I feel and am not a fence sitter, while your interests are always at the heart of what I do.
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SO - my &#8216;opinion&#8217;.
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In general, fixed mortgages can limit your flexibility. They are very restrictive in many areas, especially if your circumstances change during the fixed period and you need to get out of or refinance the loan. History shows that MOST times when people have fixed, that they would have been better off staying variable. Just ask people who fixed in the last few years at 8 and 9%. I believe that the only real benefit from fixing is to know exactly what you are going to pay every month for the given term and for some this is what they need to know.
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A comment I heard the other day made a lot of sense to me and really summed up my views. &#8220;If you fix then you are gambling that you know more than the banks because they have already calculated what they believe future moves would be into the loan and a bank does not fix rates to lose money. So who loses? The consumer.&#8221;
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History backs up that this comment has been right most of the time in the last 50 years or so.
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So what should we do? We must prepare. Get rid of small high interest debt like credit cards and personal loans to lower your monthly out going expenses and keep any sort of personal non taxable debt to a minimum, even consider consolidating any current debt into the mortgage if you have enough equity (Only after looking at all the options as this is not always the best option). It is ok to use a credit card but clear it every month. If you can&#8217;t, don&#8217;t use it.
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Consider what your payment would be if rates did raise 2-3% and plan accordingly. I&#8217;ve had a lot of questions on this particular subject so let&#8217;s look at this current scenario. I have just randomly chosen a bank&#8217;s basic variable rate and compared it with their current 5 year fixed rate.
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$300,000 loan at 5.11% variable over 30 years gives principal and interest payments of $1631 per month.
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The same loan at the current 5 year fixed rate of 7.74% would mean payments of $2147 per month. A difference of $516 per month.Start putting the extra away NOW and use the money to reduce
your debt. This will cut YEARS off the term of your loan and as rates do rise, you will already be comfortable paying the extra.This should work out better than fixing, if history is anything to go by.&#160;]]></description>
					  <author>Gregg Mountford</author>
					  <pubDate>Thu, 10 Sep 2009 00:00:00 WST</pubDate>
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					  <title><![CDATA[Interest Rate News - August 2009]]></title>
					  <link>http://www.negotiator.com.au/blogs/26/Interest-Rate-News---August-2009.html</link>
					  <description><![CDATA[
The Reserve Bank have again left interest rates on hold at their meeting this month so we can all enjoy historically low variable interest rates for the immediate future.
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In a recent survey of 7,500 International business people from more than 24 countries, one in five chose&#160; Australia as the country they believed to be best, surviving the world wide&#160;economic down turn.
China came in second while India and Singapore shared third place.
Recently released GDP figures also show that Australia is in good economic shape doing a lot better than other countries.
It seems like interest rates are close, if not at the bottom of the cycle, while rental yields are at a healthy level - historically a good time to position yourself in the property investment market.]]></description>
					  <author>Gregg Mountford</author>
					  <pubDate>Sun, 09 Aug 2009 00:00:00 WST</pubDate>
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					  <title><![CDATA[Interest Rate News - July 2009]]></title>
					  <link>http://www.negotiator.com.au/blogs/25/Interest-Rate-News---July-2009.html</link>
					  <description><![CDATA[
The Reserve Bank of Australia has left official interest rates unchanged at a 49 year low of 3 per cent for the third month in a row. The Reserve Bank governor stated they were taking a bit of a wait and see approach with signs the global economy is showing some early signs of stabilizing.
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With people moving back into housing for investment and the owner occupied market still strong, we have seen continuing moderate growth in housing prices. This seems to be continuing and gathering a little momentum at the moment.
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The Reserve Bank governor also stated a reason for keeping rates on hold was that it left room for further stimulus if needed in the future. This means they have not yet ruled out further cuts in rates.
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Figures from the&#160;Australian Bureau of Statistics show that low interest rates, healthy population growth, improved housing affordability and relatively steady housing prices have combined to create a resilient housing market.
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All in all fairly good news with variable mortgage rates at record lows.]]></description>
					  <author>Gregg Mountford</author>
					  <pubDate>Sun, 12 Jul 2009 00:00:00 WST</pubDate>
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					  <title><![CDATA[Interest Rate News - June 2009]]></title>
					  <link>http://www.negotiator.com.au/blogs/24/Interest-Rate-News---June-2009.html</link>
					  <description><![CDATA[
It was another quiet month as the Reserve Bank have left interest rates on hold, although the Commonwealth Bank have gone out on their own and increased the variable rate by 0.1% much to a lot of disapproval. Let&#8217;s hope other banks don&#8217;t follow suit. 
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The government decided not to cut the First Home Buyers Grant off at 1st July 2009 so If you are a First Home buyer, the scheme will continue in its current format until October 1, 2009. This means that those buying existing homes will receive $14,000 and for those building new homes $21,000. 
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Adjustments to the scheme from October 1, 2009 will see the First Home Owners Boost scheme reduced - this means those buying existing homes will receive $10,500 and for construction of new homes $14,000.
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As of December 1, 2009 the First Home Owners Boost scheme will cease and the existing $7,000 grant will continue to be available to all first home buyers.
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Unfortunately though, first home buyers are starting to taper off due to the reduction by most lenders of their lending loan to value ratio to 90% (meaning a 10% deposit is required).
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From economic outlooks, it looks like there will be a flat economy in 2009/2010 but should return to economic growth in the years thereafter with significant growth in 2011-2013. As it is, property values are experiencing a recovery from the modest 3 per cent falls seen in 2008.&#160; Over the first three months of 2009, national dwelling values increased by 1.6 per cent with most of the capital gains coming in February.
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Variable interest rates are likely to remain low for some period of time and investors will continue to return to the market. However, fixed rates have already started to increase which seems to indicate that rates won&#8217;t go lower and the next move will probably be upwards.
Unemployment is expected to rise to 8.5% and although this seems high, it also means that 91.5% of people employed will retain their jobs.]]></description>
					  <author>Gregg Mountford</author>
					  <pubDate>Sun, 14 Jun 2009 00:00:00 WST</pubDate>
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					  <title><![CDATA[Interest Rate News - May 2009]]></title>
					  <link>http://www.negotiator.com.au/blogs/23/Interest-Rate-News---May-2009.html</link>
					  <description><![CDATA[
When the Reserve Bank met this month, they decided to leave rates on hold. With the state budget due out and the federal budget after that, it was always unlikely that any rate movement would happen this month. Hopefully the budgets have something favorable for you personally and get some things in place to stabilize the economy in general. 
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A very important issue that I would like to mention for anyone who is thinking of purchasing a property, is that many banks recently have made changes to their lending requirements. In regards to Genuine Savings, 3% minimum is needed of purchase price for first home buyers and 5% minimum for subsequent home buyers by way of progressive and regular savings over a period of not less than 3 months prior to the time of application. Proof of this is needed with a printout of the last 3 months of your savings account statement. Any large sums or deposits are excluded unless it can be clearly shown it has come from a sale of an appreciating asset that had been held prior to their disposal for a minimum of 6 months. 
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Give me a call if you need further clarification on this.]]></description>
					  <author>Gregg Mountford</author>
					  <pubDate>Mon, 11 May 2009 00:00:00 WST</pubDate>
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