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PERSONAL/BUSINESS COACH | PROPERTY BUYER | ANALYST

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Monday 28 October 2019

Deeper and down (2-handle)

Rates down

Home loans with a 2-handle, via the fire-breathing dragon:


Source: Broker channels

This is part of the reason I think the First Home Loan Deposit Scheme will be fully subscribed.

Consider the following:

-5 per cent deposit with no LMI

-mortgage rates from about 3 per cent (and futures markets pointing to lower rates) 

-unemployment rates in Sydney and Melbourne well below 5 per cent 

-low and steady inflation

-stamp duty grants available in some jurisdictions

Buying a first home isn't for everyone, but it's hard to imagine the stars aligning any more so than this.

The scheme is ostensibly designed to be 'first-in-best-dressed', though the government has previously indicated that the available places could be extended if required.

The prudential regulator today confirmed that it will apply a lower capital requirement for FHLDS loans given that the Government guarantee is a valuable form of credit.