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News.com.au
5 days ago
- Business
- News.com.au
Money guru's $612k offer for Aussie homebuyers
It's mixed news for homeowners and house hunters after the RBA's 2025 rate cut hat-trick. Interest rates have fallen significantly for Aussies this year on the back of Tuesday's third interest rate cut for this year. But finance guru Mark Bouris believes that is the end of good news for mortgage holders in the foreseeable future. However truggling Aussie home buyers are being given the chance to save hundreds of thousands of dollars and get into a home much sooner via a new lending option offering up to 105 per cent finance. The finance offering backed by Bouris is aimed at helping Aussie home buyers, including those looking for their first property, a way around many of the onerous hurdles to real estate ownership. Despite recent falls in interest rates, the chance at owning a new home is increasingly beyond the reach of the average Aussie due to continued unaffordability, relentless upward pressure on prices due to a lack of stock and high immigration levels and punishing taxes. 'With every year that passes, there's a new crop of borrowers potentially being locked out of the market. This new generation needs these kinds of lending products to help them climb the property ladder', said Bouris, Executive Chairman of Yellow Brick Road. 'Governments keep introducing demand-side incentives that don't address the root problem. 'Deductible interest, CGT and transfer duty relief all just pour fuel on the fire of demand. We have moved to remove the deposit barrier, focus on new builds, and make the loan affordable. 'That's how we tackle both cost of living and property supply shortages.' Yellow Brick Road has partnered with Empower Money to help buyers overcome many of the difficulties in buying a new home. Non-bank lender Empower Money is offering approved clients up to 105 per cent finance, that will cover the purchase price of approved home and the associated risk fees, eliminating the need for a housing deposit. 'This means that if you're a first homebuyer in a location where transfer duty is covered by the First Home Buyers Grant, you can get a loan approved with no money down and only a minimal contribution of borrower funds,' said Peter Khoury, Chairman of Empower Money. 'Buyers only need to cover application, legal, and settlement adjustment fees. Even if you're not eligible for the First Home Buyers Grant, transfer duty is only a fraction of the deposit cost, which represents a much better borrowing position than having to pay both from the borrower's personal funds.' Empower Money says that in order to 'ensure responsible lending' the product is restricted to vetted new dwellings, including apartments and house and land packages from a national stock list. The new lending product offers a 6.95 per cent interest rate as opposed to most 90 per cent LVR loans that require a 10 per cent deposit. Yellow Brick Road and Empower Money estimates the average Aussie homebuyer can save $612,000 when the time taken to raise money for a home deposit, rental costs and rising property values are taken into consideration. Given it takes around 10 years for potential buyers to save for a 20 per cent deposit. After Tuesday's rate cash which took the cash rate down to 3.85 per cent – the third rate cut this year from the RBA, Bouris said homeowners would be wrong to expect any more cuts in 2025. 'The first thing I would expect is for that rate cut to be passed on across the country by all lenders,' he said. However Bouris believes remaining uncertainty over inflation and unemployment will mean RBA boss Michelle Bullock won't drop rates again this year. 'There is a lot of talk in the media that there will be two more rate cuts this year but I don't think we are guaranteed any more reductions,' he said. 'The language in the RBA notes is pretty clear. Don't listen to what you hear in the press. To me the cash rate it settled at the moment. I just don't see another cut happening. This will be the last rate reduction we will see for 2025.'
Yahoo
6 days ago
- Business
- Yahoo
The 15-Day Rule: Why You Should Consider Paying Your Credit Card Twice a Month
Monthly credit card bills are a burden that most people just want to get out of the way — so why on earth would anyone choose to deal with them twice as often by paying every other week instead of once per billing statement? There are several good reasons, actually. Explore More: For You: By paying their credit cards twice a month, borrowers can reduce their finance charges, pay down debt faster, expand their open credit, avoid missed payments and boost their credit scores. And if you need more advice, this finance guru has a few extra tips to crush your credit card debt. 13 Annual Payments Are Much Better Than 12 With 52 weeks in a year, two bi-weekly payments equal 26 half-payments, or 13 full annual payments instead of the standard 12. That's one full payment extra every year. Since the 13th payment goes entirely toward your principal, it's a powerful debt-reduction strategy that's relatively painless because the extra payment is spread out incrementally over the whole year. FreedomFirst credit union states that this method can work for any recurring liability, including mortgages, but it's especially useful with credit cards because of the way interest accrues on revolving debt. Read Next: Smaller Daily Balances Diminish Compounding According to the Consumer Financial Protection Bureau, credit card interest compounds daily based on your average daily balance. By making two payments per month instead of one, you keep your average daily balance lower and reduce the amount of interest that accrues. Even modest second payments can substantially reduce finance charges over time. More Frequent Payments Increase Your Open Credit Sofi refers to bi-monthly payments as the 15/3 method, with the first payment coming mid-statement, 15 days before your due date, and the second three days before the deadline. Another reason to consider adopting the 15/3 strategy is that it reduces your all-important credit utilization ratio, which accounts for 30% of your FICO score. Even if you pay your statement balance in full, new charges eat into your open credit as the month drags on, depending on when your card provider reports your account activity. However, bi-weekly payments take a bite out of those new charges twice as often, which has a positive effect on your utilization ratio and, therefore, your credit score. Bi-Weekly Payments Can Align Neatly With Bi-Weekly Paychecks Sofi mentions among the cons of 15/3 that it can be harder to remember twice as many payments. However, strategic scheduling can actually make it less likely that you'll lose track. That, according to SunWest Mortgage, is because most employers pay bi-weekly, so scheduling two automatic credit card payments to coincide with two monthly paychecks can create stability and predictability that you don't get with one large payment every 30 days. More From GOBankingRates 5 Old Navy Items Retirees Need To Buy Ahead of Fall 10 Genius Things Warren Buffett Says To Do With Your Money This article originally appeared on The 15-Day Rule: Why You Should Consider Paying Your Credit Card Twice a Month
