Wow, what an interesting week it has been (as in ‘may you live in interesting times’).

We have seen huge falls and then huge gains on the stock market, sometimes in the same day, figures released indicating that 1 in 4 households are feeling the mortgage strain, the Reserve Bank of Australia (RBA) revising Australia’s growth predictions down by a massive 1% and for the first time in history the US had its credit rating downgraded. Not to mention Spain, Italy, Portugal – well, the whole EU except for Germany and France. Whew, what a week! However the big question remains “What does this mean for me?”

From a mortgage perspective, we have seen fixed rates steadily coming down over the last 3 months, until late last week when the rush started. There are now fixed rates for 1 year loans starting at 6.59%, 2 and 3 years rates at 6.69% and most if not all lenders have reduced their fixed rates by at least .20%. Westpac’s economist, Bill Evans, has been touting over the last 2 weeks that the RBA would decrease the cash rate by 1% over the next 12 months, only to be howled down by any economist who could get some air time. As it turns out, he looks as though he is closer to being on the money than not.

Uncertainty is the enemy; it leads to rash decisions and wildly fluctuating markets and unnecessary fears which do not help anyone, especially if you have a mortgage.

We want to help you try and put together the best strategy for you and your family moving forward when it comes to dealing with your mortgage. If you are feeling the strain and you are currently paying over 7% then perhaps one of the above mentioned fixed rates could help. As an example, for every $100 000 you have at 7.19% if you took a 1 year fixed rate of 6.59% you would save $40 per month (paying P&I) or $50 per month (paying Interest Only). So if you have a loan of $300 000 you would save at least $120 per month and up to $150 per month. If you want to check out your own situation please visit our website and under “Tools” you will find various calculators that will show exactly what you could save or you can contact us directly and we can provide you with some advice for your own personal situation.

Of course, these rates could continue to fall, as could the variable rate. If in doubt, it would be best to discuss it with us.

Over the next few weeks, if not months, we anticipate that there will be a lot of movement around interest rates; if you wish to keep up to date then may we suggest that you follow our blog.

A week can be a long time....

....especially in economics at present.


Last Tuesday the RBA seriously considered increasing interest rates. Thankfully for those of us not in the only game in town (i.e. mining) they held off. These are the top business headlines one week on:

• Anger Over Credit Rating Resurfaces in Washington
• Markets brace for more economic pain 
• A World of Worries: Markets Fall, New Recession Feared 
• Debt crisis: Silvio Berlusconi unveils reforms to avert Italian crisis
• Painfully won super gains wiped away

Where are all those economists predicting 3 more rate rises this year? Presumably not spending their trading profits on a beach somewhere. Crying into their beers perhaps?

Or are they happy to sit back and count the number of press cuttings they've had recently? (It doesn't matter what you say as long as it makes the media. And scary stories sell more papers.) Oh, no, wait, here they are:

• http://www.theage.com.au/business/double-rate-cut-tipped-for-september-20110808-1ii9g.html

I just wish I'd switched my super into cash a week earlier.

Who cares how the US economy is doing?

The answer is EVERYONE. And this is why - the graph tells the story.

Yes, the economies of China and India are booming. But how much do the consumers in those countries spend? Given their relatively low incomes, not as much as you might think. India's consumer spending in 2009 was about US$738billion; China's US$1835billion (for their total population, not per capita!) Australia's total household consumption was US$565billion.

And the Americans? US$10026 billion. Say no more. If they're not spending, we might as well all go home!

Found on Facebook!

Here's a tip - if you're hiding from creditors, check your privacy settings on Facebook.

A couple here in Aus couldn't be found by the usual methods when they defaulted on a large loan so the lender found them and delivered the default notice to them via Facebook. The court found this fair enough as they were frequent FB users and it was fair to assume they would receive the notice this way.

Their privacy settings meant they could be identified by matching up their names and birthdates for starters.

Haven't we all been told not to disclose personal info to all often enough? Let alone when you're on the lam. Dumb and dumber.

How much is $11 billion really?

Quite a lot you might think. It's the amount Queensland will spend on health in 2011/12. It's the estimated cost of rebuilding Christchurch. The same amount will be paid to Telstra by the NBN for the existing copper telephone network.

It's also the amount that Australian banks charged in fees last year. It works out at $500 for every man, woman and child in Australia.

Yes, fees to consumers are down - by 16%. However, fees to business went up 21%.

This is the first year in 13 years that overall fee collection didn't rise. They didn't drop either. Give with one hand...........

Do you know how much you paid in bank fees last year? Including credit cards, ATM fees, account and loan fees? If you don't, you should work it out. If it's too high, give us a call.

We made the press!

From time to time, we are asked our opinion. It's nice to see it accurately quoted and actually used....Thanks Domain! http://theage.domain.com.au/home-buying-tips/the-loan-20110610-1fvv0.html

CBA customer satisfaction drops

Who remembers the last Melbourne Cup day rate rise from the Commonwealth? Way above the RBA increase? Well, the latest survey shows that they're the only lender to suffer a drop in customer satisfaction. Quite a price to pay! There are lots of offers to switch banks at the moment. Did you know your mortgage broker can also access these offers and others that aren't advertised? If you are a current "unhappy" CBA customer then you might want to talk to us!