Latest news with #MichaelBaumann
West Australian
19-05-2025
- Business
- West Australian
Simple way to save $90,000 off mortgage interest repayments
Mortgage holders who can afford to keep up with their repayments will be significantly better off over the long term if they can resist the lure of an interest rate cut. According to research by Canstar, the average Australian borrower with a $600,000 mortgage and 25 years remaining on their debt could save $89,143 in interest payments simply by keeping their repayments at the same amount they were paying in February. The data is based on a total of four interest rate cuts, expected in February, May, August and November. Canstar insights director, Sally Tindall says the vast majority of Australians are currently holding onto their existing payment, despite a 0.25 per cent rate cut being passed on in full by the banks in February. 'This just illustrates how determined Australians are to get ahead financially, particularly when it relates to their mortgage,' she said. 'Not only will paying extra in your mortgage give you a bigger buffer to fall back on, it also has the potential to release you from the shackles of the mortgage months, if not years, early.' Not only would the average mortgage holder save thousands in interest, the data shows they would own their house in 21 years instead of 25. Australians are being reminded of the benefits of paying a higher rate on their monthly repayments ahead of Tuesday's highly predicted rate cut. At the time of writing, the money market had factored in a near 95 per cent chance of a cut when the central bank announces their cash rate decision at 2.30pm on Tuesday. The Commonwealth Bank confirmed the majority of their customers were currently holding their repayments at previous levels despite the February rate cut. Commonwealth Bank's home buying executive general manager, Michael Baumann, said following February's rate cut about 14 per cent of eligible customers took the opportunity to reduce their direct debit to align with the lower minimum repayment – thereby freeing up their current cash flow. 'For those who did not reduce their direct debit repayments, they may now be making additional repayments on their mortgage, which could help them to pay off their loan faster,' Dr Baumann said. 'These additional payments will also increase the available balance of their loan accounts and customers may have the flexibility to redraw the available balance at any time, for example if they experience an unexpected cost.' February marked the Reserve Bank's first rate cut since November 2020, at the height of the Covid-19 pandemic. The cash rate is currently 4.10 per cent, with RBA governor Michele Bullock to announce any change following the central bank's two-day board meeting at 2:30pm on Tuesday.
Yahoo
19-05-2025
- Business
- Yahoo
Surprise interest rate move many Aussies are making: 'Save $66,580'
Australia's largest home loan lender has revealed the surprising number of homeowners who leapt at the opportunity to reduce their repayments after February's interest rate drop. It was the first bit of mortgage relief since the Reserve Bank's (RBA) rate hike cycle, which saw the cash rate jump more than a dozen times. You'd think that high interest rates teamed with a cost-of-living crisis, there would be a huge uptick in the number of repayment reduction requests. However, Commonwealth Bank (CBA) found only 14 per cent of eligible customers asked for a decrease after the February 18 RBA meeting. 'For those who did not reduce their direct debit repayments, they may now be making additional repayments on their mortgage, which could help them to pay off their loan faster,' CBA's Home Buying Executive General Manager, Michael Baumann, said. Economist issues dire RBA interest rate hike warning: 'Back in play' Daunting retirement 'squeeze' about to hit generation of Aussies: 'Hidden cost' Money crisis sparks capital city exodus as Australians embrace 'new frontier' 'These additional payments will also increase the available balance of their loan accounts and customers may have the flexibility to redraw the available balance at any time, for example, if they experience an unexpected cost.' Eligible customers were those who weren't paying the lowest amount possible for their loans. Those on the absolute minimum repayments would have had their direct debits automatically reduced following the RBA's decision to lower the cash rate from 4.35 per cent to 4.10 per cent. Anyone paying more than the lowest amount had to contact their bank via the app, call or visit a branch in person to request a repayment reduction. Someone with a $500,000 mortgage would have seen around $80 in savings per month as a result of that move from the central expert Ben Nash told Yahoo Finance that it could work out in your favour in the long run if you kept your repayments where they were at before the February RBA meeting. "There's no doubt that some people have been struggling to make ends meet, and they are looking at the extra money that's there. "But if your budget is balanced and you can afford to do something with the money, then it will be good to do that." Nash used an example of a $711,000 loan and said just one 0.25 per cent rate cut would result in $110 per month in savings. But if you didn't change the amount you're currently paying, you could shave two years off the loan and save $66,580 in interest over the lifetime of the mortgage. "If you just bought your first home six months ago, and your mortgage is high and your cash flow is not great, then it probably is going to be more to your advantage to try and chip away at your mortgage more and pay some of that down so that you're reducing your mortgage payments," Nash told Yahoo Finance. "Whereas, if you bought your home 10 years ago and your mortgage is at a comfortable and manageable level, and your personal your cash flow is reasonably strong, then, if that was me, I would be less inclined to make extra mortgage payments and more inclined to look at how can I invest the money to actually grow and get more of a return on it." A poll of nearly 10,000 Yahoo Finance readers found that one rate cut hasn't been enough to provide much relief. Interestingly, 68 per cent said they would need at least four rate cuts to feel financially secure. The RBA is meeting this week to decide whether to hike, hold, or cut interest rates. All of the Big Four banks are expecting an interest rate cut on Tuesday, with NAB forecasting a jumbo 50 basis point cut. Nearly 90 per cent of experts interviewed by Finder believed rates would be cut again by 0.25 percentage points. Three quarters have forecasted two more cuts in the next 12 months, while more than half (56 per cent) reckon there will be a cut in July and August. 'If rates fall further, it could deliver greater total savings to eligible home loan customers," Baumann said. "As such, I wouldn't be surprised to see more home loan customers choosing to free up their cash flow by lowering their regular mortgage repayments."
Yahoo
14-05-2025
- Business
- Yahoo
Diocese of Buffalo announces 2 education department appointments
BUFFALO, N.Y. (WIVB) — The Diocese of Buffalo on Wednesday announced two new appointments to its Catholic education department. Father Steven Jekielek, the Vicar Forane of the Niagara/Orleans Vicariate, was named as the deparment's finance manager and Michael Baumann, the chief operating officer at Cardinal O'Hara High School, was appointed the human resources manager. Jekielek started his role in April and before priesthood, he worked at Thermo Fisher Scientific in Grand Island for 19 years. Baumann will start in July. He was previously the superintendent of schools at Newfane Central Schools and an assistant superintendent at the Sweet Home Central School District. Katie Skoog joined the News 4 team in April 2024. She is a graduate from the University at Buffalo. You can view more of her work here. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Yahoo
02-05-2025
- Business
- Yahoo
Commonwealth Bank confirms $33,000 home loan change for these Aussies: ‘Lower deposits'
Commonwealth Bank will make it easier for Aussies looking to build their own home to get onto the property ladder with a smaller deposit. The country's biggest bank will increase the maximum loan-to-value ratio (LVR) for its construction loans later this month. CBA currently allows customers to borrow up to 90 per cent for securities valued under $3 million and up to 75 per cent for those valued between $3 million and $5 million. From May 24, the major bank will increase the maximum LVR to 95 and 80 per cent respectively for construction loans, while raising the maximum security for the top bracket to $6 million. CBA executive general manager home buying Dr Michael Baumann told Yahoo Finance the major bank was committed to helping Australians realise their property ownership goals. RELATED Commonwealth Bank issues RBA interest rate cut warning for mortgage holders Superannuation change to give Aussie workers pay rise in weeks: '$29,000 boost' ATO warning over Centrelink payment as 82 per cent of Aussies get it wrong 'Our expanded construction loan policy is designed to create more opportunities for Australians interested in building their property to achieve homeownership sooner by allowing them to access construction finance with lower deposits,' he said. The average construction loan in Australia was $674,649 for new builds in the December quarter, according to Australian Bureau of Statistics data. Under the previous rules, a 10 per cent deposit would have been $67,474.90. Now the requirement for a 5 per cent deposit halves that deposit amount to $33, has made a range of changes to its home loan rules in recent months, including offering loans for prefabricated home builds. Prefab homes are constructed off-site, mostly in a factory, and then transported to the individual's desired location, making them a cheaper option than traditional housing. 'Prefabricated homes have historically been difficult to finance in Australia,' Baumann told Yahoo Finance. 'Our prefab housing policy update allows customers to access progress payments before the property is affixed to land (up to 60 per cent of the total contract price), instead of requiring them to fund up to 90 per cent of the upfront costs themselves as has previously been the case.' CBA has also announced it will remove HECS loans during serviceability assessments if the debt will be repaid within 12 months. Other changes include allowing first-home buyers to rent out a room and use the rental income to help service their home loan. Customers can count up to $150 per week in servicing, with one renter allowed. It is also piloting an expansion to its LMI waiver program to include more workers like paramedics, firefighters and nurses. CBA economists expect the Reserve Bank of Australia (RBA) will cut interest rates at its upcoming May meeting, despite inflation figures coming in a touch higher than it had expected. The major bank has forecast three interest rate cuts this year in May, August and November, which would bring the cash rate down to 3.35 per cent. Westpac, ANZ and NAB are also expecting a May cut, with NAB predicting a double 0.50 per cent in to access your portfolio
