Home Loan Rate 2023 & Other Queries

justanick on 12/02/2023 - 22:58
Last edited 13/02/2023 - 09:42 by 1 other user

Hi All,

We live in Sydney close to the city. Our rental price is going up the roof and the landlord might sell the unit we are currently occupying. He won’t give us a 12 month lease but gave us 6 months and we might just get a notice of 30 days to vacate. This is extremely frustrating and stressful for us as we have few travel plans to visit sick family members abroad.

We have been planning for a home which we can call it our own and recently going through a mortgage broker which has been referred to us by a friend. He is offering 5.19% interest before the RBA 0.25% increase.

  1. Is there a calculator somewhere we can find out our interest rate if we can provide the price of the house, loan amount (let’s say 5% or 10% deposit) + if we choose to add LMI as we will not have a 20% deposit?

  2. Does anyone recommend buying property now or wait for another few months? We plan to live in the property.

  3. Is there a way to find out some demographics on a suburb and crime rate or how save the suburb is?

  4. Unfortunately, I bought a small unit when I was very young and had to sell it. Now I won’t get any benefits from the stamp duty. But just for my reference for new home owners for example someone bought a house for $1.2m and stamp duty is $48k. How much monthly do they pay to the government instead of paying $48k? If they sell the property after few years do they carry forward the stamp duty or government will just charge them until they own the property and forgive the stamp duty after they sell?

To buy a property in Sydney we know we have to move away far and can’t live close to the city.

Please help us out with your thoughts.

Financial Home Loan

Comments

  • Benoffie on 12/02/2023 - 23:14

    For demographics and crime rates - ABS https://www.abs.gov.au/

    Dont know what weird Stamp Duty thing is in NSW. SA charges stamp duty on every sale of property. No carry forward, no payment plan, no refund.

  • Gunnar on 12/02/2023 - 23:22
    +1

    Do you have a good broker? They can provide you with answers to all of those questions.

    They can give you property and suburb reports for that info and calculate your repayments with that.

    I was contemplating a significant change to my employment and my broker gave me excellent advice on how to time this so it would not impact my borrowing ability come time for settlement.

    • justanick on 12/02/2023 - 23:31

      I spoke with 5 brokers and selected one. He’s a nice guy but not sure he is giving us a good rate. Our home purchase price will be around $1.2m. Trying to get a loan pre-approved for LVR 95% the best he can get us is St George 5.14 plus recent RBA rate increase 0.25 final offer 5.39%.
      Is this the best option from any of the big 4s?

      In terms of the property report he sends us data from RPA or someplace if I give him an address. It doesn’t show the demographics like who lives into the area Aussies, Indians, Asians etc. crime rate or other info.
      I also find the comparison of similar properties are not like for like and older report.

      • lachhelix on 12/02/2023 - 23:35
        +1

        Ahhh I believe that's why the rate is a little high - 95% LVR
        Most low rates seem to be closer to 80%

      • Gunnar on 13/02/2023 - 09:06

        I can't comment about rates at the moment unfortunately I've got mine (for the most part) locked till the middle of next year. They are individualised however depending on how much you are borrowing; the points below are probably right as to why you have those rates

        I would go say with a new lender when you're settling as some banks can be pest to deal with in how they look at your finances so you won't get final confirmation of your loan until very late in the piece. We had this going with a second tier lender (i.e. not a big 4 bank) and it was stressful. I mean we got there in the end okay but the two weeks prior to settlement were very stressful because the bank hadn't gotten around to giving us final approval. Never had this issue with a big four. Check with your broker on how easy a bank is to deal with.

        Ask your broker for a Suburb guide or a Suburb report that will give you some of the information you're after. Anything more you will have to get from the ABS and BOSCAR has the crime stats you're after in NSW. If you want to know an area go there and just spend some time driving around the area, catch public transport from there for where you are likely to go to, do your grocery shopping, and you will know if it's right for you. There's areas you can rule in or out by doing that and being your own judge of whether the area is right for you.

        With property reports you will never get like for like; they are based on recent(ish) sales of similar sized homes. They don't include condition because this requires a manual search and comparison on the condition of each property. The other thing with reports is that they are a guide only. They are not definitive as to what the current market rate is. For example we bought our last place 12 months ago in a very hot market; we had to add about 20-30% on top of what the core logic property guides were saying. Your best bet for market rates is to look at recent sales for the area (and hope the figures are disclosed)

        Buying a place you intend to live in in an area you're not familiar with is a pretty daunting task. You really have to know how to put info together from a number of areas (property reports, ABS stats, recent sales data, your experiences in the area) and you will get indicative information of what a place is worth and whether you like the area

        • justanick on 14/02/2023 - 01:14

          Great info. I contacted two brokers both can’t give me a suburb report. They ask for a property address and once I give I get a range of valuation with area size etc. nothing more on the suburb.

  • brendanm on 12/02/2023 - 23:26

    Stamp duty is paid as a lump sum, not monthly? You don't get to choose to take out lmi, the lender will force you to if you are below their lvr threshold.

    • justanick on 12/02/2023 - 23:33

      I hear the new home owner NSW Stamp duty rules are different now. You don’t have to pay one off during settlement for over 800k. For $1.2M property for a new home buyer you pay something called property tax yearly or monthly. The details are what I’m after.

      • avoidfullprice on 13/02/2023 - 08:02
        +1

        But you said you are not first home buyer , so you dont get the land tax option??

        Also there is no such calculator to work out interesting rate (offered by a bank) based on LVR. You maybe able to use something like finder.com.au but you also have engaged a broker so that’s essentially the same?

        There is some sort of LMi calculator based on LVR but even that is an estimate.

        Everything in this post points to this being a bad idea in order to “solve” the rental situation…

    • lachhelix on 12/02/2023 - 23:34

      https://www.savings.com.au/news/nsw-parliament-passes-stamp-…

      Perhaps something to do with this - no clue whether it applies in OPs case though

  • justanick on 12/02/2023 - 23:36

    With my current financial situation I’m really confused to get to a good area and aim to buy a 3 bedroom townhouse or buy 4 bedroom free standing house which is far away in a newly developed area.

    What are my key points that I should look out for? I’m trying to find crime rate which is hard to find. People say townhouses don’t increase value.

    • dcep on 13/02/2023 - 00:57

      Any children? If not, have you considered a 'temporary' home instead of 'forever' home.

      I won't commit to 95% LVR especially with fairly large mortgage, but then i don't know your financial situations whether high income / stable income / other assets.

      Just saying don't overstretch it as you might feel very stressed now with renting whilst dreaming the wonders of owning a home, but also be wary you could get yourself into worse nightmare on struggling with $, stressing out day and night whilst buried in debt.

      For 'temporary' home, i would just go for the cheapest (regardless if tiny shoe box unit) nearby workplace / inner city - if no children.

      • justanick on 13/02/2023 - 01:17

        Ya I hear you. We got no kids but paying for someone else’s mortgage for years to come doesn’t make sense. We are planning for kids and need to get a bigger place than our tiny apartment.
        We are definitely not planning to stretch out more than we can chew.

    • Sinnerator on 14/02/2023 - 08:27

      Also get a building and pest inspection from a TRUSTED inspector. Don't buy a lemon.

  • Clickbait on 13/02/2023 - 07:29

    Under no circuspantses should you accept a 95% LVR in a market that is predicted to drop 10% in the next year.
    That's called negative equity.
    Dump your broker now

    • brendanm on 14/02/2023 - 09:34
      +1

      predicted to drop 10%

      What's the success rate on these predictions?

  • RockyRaccoon on 13/02/2023 - 08:11
    +1

    Look at your lifestyle.

    Are you prepared to change that should the circumstances change.

    Investing in your own home will pay dividends depending on how adapatble you are. Are you prepared for some rough times should interest rates move higher. Can you cut back on spending, like Lattes and nights out should you get squeezed. Delay having kids. All mainly in the first 5 years of the ownership of your home.

    Also how secure do you feel about your joint income and relationship.

    If you as a couple (ie not just you) can make these sacrifices if needed, then dive in and buy. Renting while, emotionally, you say is paying off someone else's mortgage, that might be true, it might not be. Not all RE investments succeed. Investors go bust as much as individuals. They are not immune from costs.

    Renting does mean you can be more flexible in your life. You can change location a lot easier, if you lose employment its easier to downsize (yes subject to rentals being available, so nothing is truly that simple). You have a small unit now, and want a 3-4 bedroom house, thats a big commitment and change. Moving from the inner city to the suburbs changes a lot of things. Commuting for example.

    With that many changes to your lifestyle, making a longer term commitment with big financial risks is something to consider. You think stress about unknown lease details is something, worry about trying to sell a house with mortgage payments rising and reduced equity with prices dropping.

    Take the advice, but only you can make a decision. The best still is to be prepared for the changes as a couple and be prepared to accept there is big risk. If you have upside go for it, if not then tread carefully.

    BTW, here is where you will get best advice on the, Property tax/vs Stamp duty in NSW, option.

    https://www.nsw.gov.au/housing-and-construction/first-home-b…

    • justanick on 14/02/2023 - 01:31

      This is by far the best post which I read in a long time. Such a big thanks to you and everyone for spending your time and energy on my post.

      We have been planning to buy a property in Sydney for sometime now but after the rental market crisis which will only escalate upwards is getting us to decide if we should take the leap of faith now or not.
      Yes, we are planning for a baby soon and it’s expensive.

      Getting into the property market is always stressful. 2019 when everything was at a bargain I didn’t have enough to buy something. 2022 property market seemed like a dream.
      Now that the interest rates are up one more month of interest rate on hold will shoot up the prices.

      Everything feels so stressful that owning a property could just be a dream.

  • netjock on 13/02/2023 - 09:15

    Everything else you can google and pretty much fixed. It just depends on whether you can make the figures work.

    2) Does anyone recommend buying property now or wait for another few months? We plan to live in the property.

    Is going to the the fun part. If you are going to buy $1m I'd wait as there is plenty of people who's borrowing capacity is going to go down as rates go up and prices will drop (5% or 10%) which is a big number at $1m.

    If you are going to buy a new build on a block ($300k + $300k) I'd say maybe not so much of a concern because cost to build isn't going down soon unless they start giving away land for free.

    Funny market this one.

  • ForkSnorter on 13/02/2023 - 09:21

    Buy in Brisbane instead of Sydney. Brisbane seems to be much better value for money than Sydney/ Melbourne at the moment. I've been watching the market for a few months, and while there is not much on the market, prices are still very low.

    e.g. 2 bed, 1 bath, 1 carpark, large balcony, amazing view, lap pool/gym/sauna, bedrooms separated by living room, inner city=ground zero for olympics 2032, only $555k. https://www.realestate.com.au/property-apartment-qld-brisban…

    or bizarrely large 1-bedroom apartment with 2 studies! and balcony and carpark, rooftop pool, also inner city, only $370k. https://www.realestate.com.au/property-apartment-qld-brisban…

    or 2 bed, 2 bath, 1 carpark with river view, 95sqm, lap pool, gym, inner city, for $595k.
    https://www.realestate.com.au/property-apartment-qld-brisban…

    I always try to think outside the box to avoid decades of debt, hope this has given you some ideas. For the same price as these 2-bed apartments in Brisbane, you would only get an old 1-bed apartment with no carpark in Sydney, with no pool, etc.

  • justanick on 14/02/2023 - 01:59

    We are both in Sydney and trying to buy a property to live in not invest otherwise I agree Brisbane is a much better option.
    2014 my friends decided to go to far out in the West of Sydney to buy property. A lot of people warned them it’s silly to move that far and prices will not go up. Now they are rich and buying their second or third property.

    For our situation we can a good suburb and to live for at least 5 years.

    Now in terms of stamp duty new rules I know I’m not eligible but I made it clear I wanted to know how it works for my knowledge. The way I understand now is .. let’s say for $1m property instead of paying $40k stamp duty during settlement a first home buyer can opt in to pay $2k a year property tax for 30 years. When you sell the property you don’t pay any tax. A huge relief for not paying $40k stamp duty upfront.

  • cupcake on 14/02/2023 - 14:30

    You should contact Mortgage Choice and they will help you find a loan most suitable and you don't have to go with the big four banks.
    Meanwhile, increase your deposit while renting and looking.
    When you find out how much you can borrow, the monthly repayments and the interest rate, budget for 2% or 3% more just in case.
    Prices are high all over Sydney now. The west is still good value but the bigger deposit you have, the better - especially as you won't a stamp duty exemption and have to pay lenders mortgage insurance.

    Good luck.

  • justanick on 14/02/2023 - 17:42

    Thank you. My pre approval is now in process with one of the big four banks. How long does the pre-approval last? Do you guys reckon prices in South of Sydney will decrease further?
    I’m looking at Moorebank for a bigger home. Is that a good suburb?

  • justanick on 15/02/2023 - 01:33

    Just a quick question - I remember when I first bought my tiny unit back last decade or so I could get 1st year honeymoon period of low interest rates or even fixed my interest. How come I don’t see anything like that anymore? The brokers I spoke with they offer variable interest rates.

    • El-Rhi on 15/02/2023 - 06:31
      +1

      There are some lenders who do an additional discount for the first one or two years, although not many do this. Usually they aren’t necessarily cheaper than other rates in the market but will then jump up 40-50bps after the honeymoon period, so you’d be looking to refinance after. All banks have fixed rate loans for 1-5 years but currently they are more expensive than variable loans as the cash rate is expected to increase further. This means it reduces how much you can borrow so that’s probably why the brokers have not discussed with you as it doesn’t sound like it would be suitable for a 95% lend.

  • justanick on 15/02/2023 - 15:35

    Thank you.
    Can someone please provide me suburb report on MooreBank, Miranda, Beverly Hills and Revesby in NSW? My broker can only provide a report on the property if I can give him a valid address. This doesn’t tell me much on the suburb.

    • cupcake on 15/02/2023 - 15:47

      No. You have to ask the neighbours before you buy.

      • justanick on 15/02/2023 - 17:49
        -1

        What if you don’t know the neighbours it’s very hard to ask someone these questions? How can one knock at a neighbour’s place and ask how’s your neighbourhood?
        Before we buy we will drive around the neighbourhood. Walk around and go to the nearby grocery stores.

  • webtonmoy on 16/02/2023 - 14:17
    +1

    "Is there a calculator somewhere we can find out our interest rate if we can provide the price of the house, loan amount (let’s say 5% or 10% deposit) + if we choose to add LMI as we will not have a 20% deposit?"

    This may be useful:

    https://www.commbank.com.au/digital/home-buying/calculator/s…

  • justanick on 26/02/2023 - 21:09

    Just saw this article. I’m baffled and confused. I thought first home buyers can only buy one property to get stamp duty concessions and instead of stamp duty they can opt into property Land tax. This article from 9News is talking about first home buyers can own two properties and Liberals will bring about 3rd home stamp duty concessions.

    I’m confused now. I bought a property during my young age and sold it. Since then I’ve been renting. My wife never bought a property. We are not eligible for any stamp duty concession as we are seeking joint home loan.

    Can someone please explain if this article means we will get some benefits if liberals get elected?

    https://www.9news.com.au/national/nsw-state-election-2023-co…

  • justanick on 28/02/2023 - 01:22
    -1

    Any thoughts?

  • INTP0151 on 01/03/2023 - 09:36
    +1

    Does nobody else think buying a $1.2m property with a 5 or 10% deposit in this current climate probably isn’t a great idea? Yikes

    • cupcake on 01/03/2023 - 09:39
      -1

      The OP had a unit and had to sell it when younger. I wonder why.

    • Stargazer5 on 12/03/2023 - 16:41

      The news has been saying the market in Sydney has gone down a little already in general. Yes, yikes, negative equity. Hopefully Op has money to pay for repayments, then I think its ok. Keep saving principle money. It’s a little dangerous, need to have a good plan and know what you are doing. I suggest looking into Brisbane as someone said, even for home owning. It’s a great city, its starting to grow more but still young, so it’s better value I think compared to Sydney and Melbourne home prices.

      • INTP0151 on 18/03/2023 - 09:00

        The news? I prefer to look at actual data and not “news” who mostly just spruik the housing market. A lot of areas of Sydney have seen over 20% of drops so yes a lot of negative equity. Maybe it’s just me but if you only have a 5% you can’t afford to buy a million dollar plus property

        • justanick on 19/03/2023 - 04:16

          I can pay more than 10% for a 1m property the worst part is the stamp duty as I’m not a first time buyer.

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