Over the past few years there has been a lot of movement in interest rates and it seems that there will not be much change in this in the next 9-12 months either. Investors are very aware that they need to get the best interest rate but this has not been as easy as one might think in the past few years. No sooner is eveything looking positive and you think that perhaps you should change to get a better rate before the rates go up, they then go down again and if you have moved lender you have done it all in vain.
In The Present Climate
As the money market stands at the moment one point that an investor should understand is that if they can pay down their principal loan then they are in a better position.
During the good times many had fixed interest/no principal payment loans and they certainly were beneficial when property prices were rising, but in this climate it would have to be a brave investor who would set their loans up this way.
Either way, investors need to keep up with what is happening in the investment market and in the property value markets. Neither of which are easy to evaluate because one day you will read a positive thought by a supposed guru and the next day you will read that certain data has shown that prices are going the opposite way.
Currently RP Data’s last figures are saying that property prices had been going down: Brisbane had very little movement, Sydney down 1.2 percent (3.6 percent for the year), a decline in other cities: Perth 1.7 per cent, Darwin 2.4 percent, Canberra 1.5 percent and Hobart 1.2 percent.
It still seems that there will be a lot of instability in the next 12 months or so and because of this property investors are encouraged to:
1. Keep reviewing their finance structures
2. Ensure that they have the best structure for these uncertain times by talking to a finance consultant
3. And, if necessary, take action to set up the best structure for their advantage.
Many thousands of dollars can be made or lost over a period of 20 years if a loan is not re-evaluated frequently and adjusted to get the best advantages. Even more money is lost if the term of the loan is longer.