If you're wondering where to invest some money and you've got a mortgage, there's no better place to put your spare cash. Not only is the strategy risk-free (in that you won't lose your money), say advisers, but it will leave you better off.
Let's say you have a spare $10,000 and your choices are putting it into your home loan or a deposit account. Financial planner David Simon, partner at Westpac Private Bank, explains the difference between saving interest and receiving interest as saving yourself an expense (interest on your mortgage) versus generating a return (interest from the deposit account).
"If you invest it in a bank account it will give you about 3.5 per cent, while putting it in your home loan will save you about 5 per cent," says Simon. "If it's in your mortgage it will save you the equivalent of $500 in interest (5 per cent of $10,000) every year. In the bank account you'll earn only $350 a year (3.5 per cent of $10,000)."
Now that's before tax. For someone earning $150,000 a year and paying 38.5 per cent tax (including the Medicare levy), tax would be payable on the bank interest of almost $135. "So the net return is only $215," says Simon. "Saving interest on the home loan, on the other hand, has no tax implication. So you'd get the $500 benefit which is effectively untaxed because it's reducing your expenses – leaving you better off by almost $285 a year."
Even as the mortgage rate drops, this strategy delivers a "fantastic" outcome, says Simon. "Investing money in the mortgage or a bank account both have the same characteristics– no risk. But if you wanted to invest in a bank account to get the equivalent return as investing in the mortgage, you'd need to get a grossed up return of 7.5 per cent."
While most borrowers will be celebrating lower repayments on their home loans thanks to historically low interest rates, this is the time to really hammer down your mortgage. Making extra –not lower –repayments can make a significant dent in what's likely to be the biggest loan of your life. Another financial planner, Suzanne Haddan of BFG Financial Service, is worried about young borrowers taking on too much debt without taking into account the impact of higher rates, which will eventually come.
Older borrowers can remember rates at 18 per cent while those just starting out often think of low rates as the norm. "This cycle is very dangerous, particularly for first home buyers," says Haddan. Rather than focusing on current interest rates, she suggests new borrowers work out whether they can afford repayments at 6 per cent. Chief of debt collection agency Prushka Fast Debt Recovery Roger Mendelson, puts the long-term average at more like 8 per cent.
But let's go back to Haddan's suggestion. Let's take a couple whose combined after-tax monthly income is $10,000 and who have a $900,000 mortgage at 5.35 per cent, the average variable rate says Michelle Hutchison of research house finder.com.au. Right now their payments (on a 30-year loan) are about 5,026 –half their income.
If their lender matches the Reserve Bank of Australia's 0.25 percentage point cut but they stick with the old repayments, says Hutchison, they could save $62,534 and reduce the 30-year loan term by almost two years (22 months).
Even better for powering down their mortgage (but harder on day-to-day household finances) would be making higher repayments as if the interest rate was 6 per cent. This would cost them $5396 a month. But it would cut five years and eight months off their loan and save them $189,027 in interest, says Hutchison.
Now for what can be an old chestnut –the thought that you're making a dramatic difference to your mortgage thanks to your offset account. Many households direct all their income to their mortgage offset account, but slowly drain it thanks to it being used as a transaction account for everyday expenses. Using the same couple with the $900,000 mortgage, if their $10,000 monthly income goes into the offset account but is withdrawn each month – generally leaving only, say, $5000 in the account –they'd cut only three months off the 30-year loan and save $17,835 in interest.
"The most effective way to reduce the cost and term of your home loan is by adding as much as you can to your mortgage repayments," says Hutchison. "Whether that's by using an offset account or increasing your repayments, if you can build on your savings in your home loan account you will be potentially thousands of dollars better off.
"The trick with offset accounts is to build up the balance each month but our research shows that you can still save significantly off the interest charges on your loan and even reduce the term if you keep a smaller amount stagnant in the account. The most important thing to remember is to keep track of your home loan interest rate. Don't get comfortable with a rate cut this month because there's a huge difference between what lenders are offering. Renegotiate with your existing lender or switch to a better value deal and then accelerate your repayments and you will save even more."
The Australian Financial Review
Come & Talk to David Choi today from PS Financials Pty Ltd on 0450793070 !
David’s Friend’s Special on all Home Loans – It’s time for you to Switch & Save!!
Q1. Have you had the home loan for over 2 years with your current lender?
Q2. Is your home loan interest rate over 4.95%?
Q3. Is your home loan set as principal & interest repayment?
If you qualify (‘yes’) for any of the above, then you should read on:
A1. Yes, you can get a free valuation done on your property.
A2. Yes, you can refinance with same lender (only Westpac & ANZ) - REDUCE the interest rate and start SAVING money! It won’t cost you any money for Westpac & ANZ customers.
A3. Yes, you can refinance with any lender (I recommend Big 4 Banks) – REDUCE the interest rate and start SAVING money! In general, it’s under 4.95% and can be lowered by further negotiation with the lenders.
A4. I will show you how to start investing in properties using your existing property.
A5. Yes, you can switch to interest only product!
$1 MLI PROMOTION - Potentially Saving Your MONEY!!!
As part of ING's ongoing commitment to help their customers get ahead, ING is offering a promotion under Orange Advantage.
Effective from Wednesday 26th November 2014 and until further notice, ING Direct will offer Lenders Mortgage Insurance (LMI) for just $1 where certain riteria are met.
To be eligible for this promotion, loan applications must satisfy the following criteria:
- New Loan Application with new to ING Direct security property
- LVR (ncluding the $1 LMI premium) must be greater than 80% and less than or equal to 90%
- Loan application must include Orange Advantage
- Loan purpose must ne to purchase an Owner Occupied property
- Repyament type must be Principal & Interest (for the total loan amount)
- Meet LMI credit guidelines.
Like to find out more? Give me a call today on 0450-793-070 (David Choi) to discuss further or fill in the below form to proceed.
Hyundai's first luxury vehile will be available for viewing at your local Hyundai dealership from (apprx.)18th November 2014. Stocks will be limited and the price range is going to be in between $60,000 to $80,000 plus on-roads (subject to validation at the launch) across three models. Price enquiries can be made via 'Contact' menu.
Hyundai Genesis Sedan
Hyundai's lauded Genesis is finally here, after Hyundai Australia convinced its Korean parent to build the second-generation large sedan in right-hand drive. On sale from mid-November in three well-appointed equipment grades, each powered by a lusty V6, the Genesis brings only one surprise – a price range of between $60,000 and $82,000.
Hyundai's new flagship, the Genesis arrives Down Under loaded to the gills. In fact, with enough luxury features to embarrass everything from Toyota's Melbourne-made Aurion to the Mercedes-Benz E-Class...
Advanced safety gear comprises nine airbags including upper/lower side airbags front and rear, automatic emergency braking, radar cruise control, auto high-beam, lane departure warning, pre-collision preparation, stability/traction control, anti-lock brakes, five seatbelt reminders, hill-start assist, emergency stop signal, tyre pressure monitoring, reversing camera, pedestrian-friendly bonnet and the highest ANCAP crash safety score ever achieved.
Consider the safety box ticked.
Also standard across the range are self-leveling xenon headlights with washers and static bending lights, LED daytime running lamps, leather-appointed seat trim, a premium steering wheel and gear shifter, 9.2-inch colour touch-screen, satellite-navigation, Lexicon 17-speaker premium sound, keyless entry and starting, 12-way power-adjustable front seats, a powered rear blind and hands-free boot opening.
Tech, therefore, looks under control.
Naturally, there's also dual-zone climate-control, front/rear parking sensors, heated front seats, an electric park brake, rain-sensing wipers, 4.2-inch LCD instrument display, auto-dimming interior mirror, power/folding side mirrors with puddle lights, four power windows with auto/down, door-handle courtesy lights, interior mood lighting, one-touch indicators and steering wheel paddle shifters.
Getting the message? And so far we've only been talking about the $60,000 base model in the three grade Genesis line-up.
The mid-range Sensory Pack takes the asking price to $71,000. It keeps the base model's 18-inch alloy wheels and 245/45 R18 Hankook tyres, but adds blind-spot monitoring, rear cross-traffic alert, lane-change assist, head-up display, around-view monitor, premium leather-appointed seats, powered driver's seat bolster and base extension, driver's seat memory, a powered steering column, auto-dimming wing mirrors, CO2 sensor and LED front foglights.
If that's not enough, the top-shelf $82,000 Ultimate Pack model brings with it 19-inch alloys with 245/40 R19 front and 275/35 R19 rear Dunlop SP Sport Maxx rubber, plus a panoramic glass sunroof, auto soft-closing doors, ventilated front seats, heated rear seats, noise-reducing acoustic glass, a powered bootlid, 7.0-inch LCD instrument cluster, illuminated Genesis front scuff plates and rear window blinds.
Other than cutting-edge features like LED headlights and night vision, the only items missing here are a rear DVD entertainment system, and ventilation and adjustment for the rear seats.
And, of course, there's no V8 or all-wheel drive option, which is unavailable in the right-hand drive Genesis. Thus all Australian versions are powered by a still-generous 3.8-litre V6 that stumps up a healthy 232kW at 6000rpm and 397Nm 1000rpm lower.
Matched with Hyundai's similarly self-developed eight-speed auto, it's a combination that delivers silky-smooth, seamless performance with a nice bark near redline, no real shortage of urge and claimed 0-100km/h acceleration in a respectable 6.5sec.
That said, while Hyundai says 90 per cent of torque is on tap at 2000rpm, the rear-drive V6 powertrain does its best work above 3000rpm and the manual transmission mode still allows automated up- and down-shifts.
And the lack of a forced induction engine seen in many of its European rivals (combined with unquestionably hefty kerb weights of between 1890-1995kg) lifts the official combined fuel consumption figure to 11.2L/100km. We averaged 12.6L/100km on the launch drive out of Canberra.
But the Genesis' cabin remains whisper-quiet at all speeds and on all road surfaces, and there's no question about the quality of the luxuriously appointed interior's materials or construction – even if the woodgrain trim looks a little too plastic and the overall design somewhat old fashioned.
Overall it's beautifully crafted and finished, if lacking the design flair and attention to detail of an Audi.
For our money the highlight is the Genesis' locally developed chassis package – the most extensive ever undertaken by the same in-house team that did wonders for Hyundai's Australia-only SR models and the Series II Elantra and ix35.
The Genesis was benchmarked here against the E-Class, BMW 5 Series, Audi A6 and Jaguar XF, as well as the Chrysler 300 and the finest homegrown Holdens and Fords, with 42 separate spring, stabiliser bar and damper combinations – the latter including 13 front and 19 rear dampers.
The result is a 'hybrid' set-up comprising the US market's more rigidly mounted rear suspension sub-frame, plus a larger stabiliser and lighter springs at the front. At the rear, the Australian car uses thinner stabiliser bar and the heaviest possible (V8-spec) springs. Both ends get unique dampers at both ends and a bespoke electric steering tune is used.
In short, while ride comfort on the Ultimate's 19s was undoubtedly 'busier', the Genesis presented outstanding ride/handling balance on all the surfaces we encountered on the launch – including corrugated gravel – by combining the taut body control of a BMW 5 Series with the supple ride quality of a Mercedes E-Class.
Throw in responsive, tactile steering that's free of the vices that afflict many previous Korean vehicles, and it's fair to say the Genesis delivers the best of all dynamic worlds. In fact, we'd venture to suggest the Genesis chassis is even better suited to Australian conditions than the Commodore's.
But that's where comparisons get tricky…
Hyundai's catch cry is that the Genesis combines the technology of a 7 Series with the size of a 5 Series (it's actually larger in most dimensions, except for its still-big 490-litre boot) for around the same money as a 3 Series. Little of that is debatable, given the base Genesis is about half the price of a comparable 535i and E 400 which include fewer standard features.
But Hyundai is also keen to make comparisons with the Commodore (and to a lesser extend Ford's upcoming FG X Falcon), which is slightly wider but shorter and, even in top-shelf Calais V form, lacks the Hyundai's standard equipment list.
What it neglects to mention, however, is that the Genesis is $12,000 dearer than the Calais V in V6 form and still $6000 pricier than the 6.0-litre V8 version.
In fact, at $60,000, which makes it by far the most expensive Hyundai ever sold here, the base Genesis is line-ball with Holden's V8 Caprice V flagship.
The $71,000 Sensory model and the eye-watering $82,000 for the Ultimate takes the car far from Holden's realm.
For the Doubting Thomases, Hyundai quotes data showing the car's projected resale value will be on par or only slightly behind Germans after five years. A guaranteed buy-back scheme is part of the Genesis offer.
Hyundai seeks to add even more value to the Genesis equation via aftersales bonuses. Key among these is five years or 75,000km of free servicing. The usual Hyundai incentives like a five-year/unlimited-km warranty and lifetime capped-price servicing also apply.
But Frankly, we're a little surprised by Hyundai's Genesis pricing, because no matter how long the equipment list, the company concedes it won't attract German badge slaves, and we'd wager that the 'astute buyers' it seeks are the same ones that have been attracted to the cheaper luxury sedans built here by Holden and Ford for some time now.
We will watch with interest…
Regardless of the badge it wears, the Genesis is undoubtedly a good (perhaps even a great) car, but its relatively high price tag — especially in its mid and upper grade versions — could be the deal-breaker for many. At least until the Calais and G6E are pensioned off for good in three years' time.
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# 딜러십에서 가장 신속하고 빠르게 픽업을 하실수 있도록 도와드립니다
'Refinancing' means replacing your current home loan with a new one. Refinancing a home loan is often done to take advantage of a better interest rate, longer loan term or a desirable feature not available with your original mortgage. For instance, you may want to replace your current higher rate variable home loan with one that has a lower variable rate and offers a line of credit. Use the refinancing calculator to see how much you could potentially save through lower interest rates or fees.
You could potentially save through lower interest rates or fees. Could you benefit from refinancing?
Cautions around refinancing:
Refinancing is not for everyone. For instance, it should not be regarded as a quick fix for financial problems. Debt management can be a complex issue that is best addressed in consultation with your financial adviser or accountant.
Keep in mind that if you are refinancing in order to borrow more money over a longer loan term, then you will be making repayments, possibly bigger repayments, for a longer period. In short, that means a larger total interest cost over the life of the loan.
Refinancing may also cost money in the form of fees and charges, and these should be calculated and compared against any potential savings generated by refinancing. If you are refinancing with Macquarie and moving from another lender, make sure you find out what penalties may apply to exit your agreement with your current lender.
Speak to David Choi Today on 0450793070 to see if refinancing is right for you.
Although there are some upfront financing costs, you need to take a long - term view. The upfront costs could easily be outweighed by the possibly thousands of dollars you'll save in interest and fees over the life of the mortgage.
Make sure the lower interest rate being offered is for the life of the mortgage and not just a honeymoon rate that reverts to a higher than normal rate after a certain period.
Compare all the costs of any new mortgage, not just the headline rates, because all mortgages have different amounts of application fees, ongoing fees and exit fees. Compare the features too - some are handy but don't end up paying for features you will not use.
Using comparison rates to compare different mortgages can help because the comparison rate will take into consideration other costs associated with the mortgage such as regular fees and not just the interest rate. The comparison rate also takes into account what the mortgage reverts to if there is a honeymoon rate or a Fixed Rate Mortgage.
Make sure you can make additional repayments to your mortgage.
Avoid sending mortgage applications to lots of lenders in hope that one will say yes. This can reduce your credit worthiness. Choose a lender that meets your needs and contact them to discuss further.
In working out your loan affordability, factor in potential further rate increases so that you are prepared for increases to your minimum repayment amount in the future.
Switch & Save Today. Just Ask David Choi! :)
Lowest Interest Rates in Australia - Refinance Today! New Applicants Welcome! Home Loan, Car Loan, Commercial Loan, etc with PS Financials
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