Some would say that 2020 and 2021 were simpler years for making financial decisions. Buyers and refinancers took advantage of record-low interest rates, property values and home equity skyrocketed, and, before tougher lending rules were introduced, scores of first home buyers were getting on the ladder with government support schemes.
In this Nectar Newsletter, we look at what the market is showing us for 2022. There’s new support on the horizon for first home buyers and many options for homeowners looking to use their equity.
Fixed rates have begun to increase since the historic lows we saw in 2021. Although the Reserve Bank hasn’t budged yet, many analysts are picking the official cash rate to rise by August this year. If you have a fixed rate coming up for renewal, talk to your Nectar broker about your plans and discuss your options.
To find out about other types of first home buyer support available in your state, head to our First Home Buyer page.
Soaring property prices have helped homeowners build a lot of equity, fast. However, if house values drop this year, as predicted by some market experts, your equity could take a hit and restrict financial opportunities. This raises the question – when is the right time to use equity and what should you do with it?
The answer depends on your current financial situation and long-term goals.
To understand exactly how much equity you could access, your Nectar broker can help you organise a property valuation, but you can get an indication of what you may be able to use with our handy Equity Calculator.
Remember, using equity right now to renovate or invest could provide attractive future returns, but you’ll need to factor in affordability when making higher repayments at higher rates in years to come.
Equity can be used for many purposes:
If you’re thinking about buying an investment property, it’s important to get the right advice.
Let your Nectar broker know if you’d like to speak with an expert and they can put you in touch with one of the fantastic Financial Advisers and Investment Property Specialists we work with.
Before the year gets away, consider consolidating any additional debt you’ve built up recently. Interest rates charged on credit cards, personal loans and vehicle loans are usually much higher than home loans and can create financial stress if not managed correctly.
Consolidating debts into a single loan could free up your cash for other expenses, make repayments simpler and help you have a more relaxing 2022.
If you have several high-interest debts, we could apply for a lower-rate personal loan to repay the money you owe. Another option may be to use the equity in your property to absorb debts into your mortgage, further reducing the interest rate.
Your Nectar broker will be there to help you throughout 2022, no matter what the market has in store. Just reach out if you have any questions regarding a current or new loan.