When it comes to property, take a long-term view
Home ownership has long been woven into the aspirations and life goals of Australians, and when we take a look at history, it’s clear why. A home is a central part of lifting and defining your lifestyle, and as an asset, it’s a key component of household wealth nationwide.
Another important part of history to understand is that the Australian property market fluctuates, meaning part of home ownership involves accepting that there will be changes in a property’s value over time. Right now, property prices are dropping, particularly in cities such as Sydney and Melbourne.1
“This is where a long-term mindset is critical. As a borrower, you’re likely to experience the highs and lows of the Australian property market, so it makes sense to both prepare your mindset and your home loan for the long run,” says Carrie Fox, Head of Home Lending at Macquarie Bank.
By this logic, borrowers should consider whether short-term incentives suit long-term goals and strategies.
For example, honeymoon or introductory interest rates are often only valid for a capped time period, meaning the benefit of a reduced rate may be short-lived and the ability to refinance may not be a given in a changing market. Considering the comparison rate (not just the headline rate) is also important, as this is a better reflection of costs over the life of the loan.
Keeping your savings and everyday funds in an offset account can help you save the amount of interest you pay over time - without having to make additional repayments. You can calculate how much you could save with an offset, using our Offset Calculator.