Do you use a Buy Now Pay Later (BNPL) service like Afterpay or Zip? If so, be warned that one leading credit reporting agency has made a big change that means your BNPL data will go onto your credit report.
BNPL transactions have risen rapidly over the past few years – so much so that they caught financial regulators and credit reporting agencies a little flat-footed.
But Equifax, one of the three main credit reporting agencies in Australia, looks to have caught up.
In a recent email to brokers and lenders, Equifax states that BNPL accounts and transactions will be included in credit reports from 24 July 2021.
“Expect to see two new BNPL account types available for accounts, enquiries and defaults,” the Equifax email reads.
Don’t stress, time is on your side!
That’s because it’s still early days and Equifax wants to measure how much BNPL data could affect overall credit scores.
“The new BNPL Comprehensive Credit Reporting (CCR) account types will be quarantined from scores in the short term to prevent any unintended and inappropriate impact on scores. As data builds up over time, we will reassess,” Equifax explains in a FAQ here.
But, Equifax adds, BNPL accounts and transactions will be included in CCR scores as soon as they believe it is sensible to do so.
“We are moving cautiously as we have never seen these types of accounts before, so it is not possible to evaluate and reflect the relationship between [BNPL accounts and transactions] and risk accurately,” they add.
“Equifax will monitor the risk of these accounts as the data accumulates over time.”
It’s worth reiterating that lenders will now still be able to see BNPL transactions and accounts in your Equifax credit report, and according to a parliamentary joint committee this week, they’re already paying very close attention.
Liberal MP and committee chair Andrew Wallace put the following to Zip Co co-founder and chief operating officer Peter Gray: “I have heard that if banks see repayments to buy now, pay later providers, the banks take a very dim view of that person’s credit assessment.”
Mr Gray responded by saying banks would “absolutely” see BNPL providers in a negative light, before later stating: “I can confirm to the committee that the number one reason for [people] closing their [Zip] account is because their bank has told them they need to, to proceed with the mortgage.”
If you’re worried about what a BNPL account – or multiple accounts – could mean for an upcoming finance application, get in touch with us today.
We’ll be able to run through it with you and give you some pointers on what you can do to get things sorted before applying for finance.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Drive or walk around your local suburb mid-morning on a Saturday and chances are you’ll pass a few freshly banged up ‘Auction’ signs. But is Saturday actually the best day to auction your home? New data suggests perhaps not.
We all love a good auction story.
You’ve probably got a mate or two whose favourite dinner party story is the time they crushed all their competitors’ hopes and dreams with a final $10,000 sledgehammer bid.
But for every tenacious bidder, there’s usually an equally pleased vendor.
So what day of the week can sellers generally attract the most bidders to their auction?
Auctions held on Tuesdays at 5pm attract the most active bidders – at 5.9 bidders per auction – according to national data collected by Ray White from 23,100 auctions over the past 12 months.
This is significantly higher than the average of 3.2 bidders per auction, which also happens to be the average number of bidders at auctions held on Saturdays at 11am (the most popular auction time).
That said, results do tend to vary in each capital city.
“Looking at all auctions held over the year, Tuesday at 5pm is the best time to sell. However in Adelaide and Melbourne, it may also pay to look at Friday night,” explains Ray White Chief Economist Nerida Conisbee.
“In Sydney, it is Sunday morning and in Brisbane it is Monday night. Perth is the only market where a standard midday Saturday auction would yield the most active bidders.”
A large number of bidders, however, doesn’t always translate to higher clearance rates.
When it comes to clearance rates, it turns out Friday is the day to beat, according to Ray White Group’s national auction day clearance rates.
Friday 1pm boasts the highest clearance rate at 91.2%, while Saturday 8am comes in at a close second with 90.5%.
“Most auctions in Australia are held on Saturdays between 10am and 1pm,” explains Ms Conisbee.
“[However] holding an auction at a time that is less standard can work to your advantage if selling – there is simply less competition from other properties going to auction at these times,” she adds.
If you’re in the process of selling your current home to upgrade, or downsize, to another property, get in touch with us today to discuss your finance options.
Every family is different – just like every home loan is different. Our job is to find the right match for you.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
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As if Australian business owners hadn’t faced enough challenges this past year – now the dreaded annual insurance and workers compensation premiums will soon arrive in mailboxes. Here’s how to smooth ‘em all out (and get an early bird discount!).
If you’re a business owner, you know there’s no shortage of big bills you’ve got to keep one step ahead of at this time of year.
And your annual insurance premiums are no exception, whether that be for professional indemnity insurance, product liability insurance, public liability insurance, or any other general business insurance policy.
Throw your workers compensation premiums into the mix and you’ve got quite the annual financial hurdle to overcome.
Fortunately, a financing option exists that can ease your cash flow headache and help you become eligible for an early bird discount on your workers comp premium.
Insurance Premium Funding (IPF) enables you to split your insurance payments into manageable, affordable, monthly amounts that won’t cripple your business’s cash flow like an annual lump sum payment can.
Basically, any business that has an insurance premium of more than $5,000 has the ability to use IPF if they need to.
The insurance premiums are normally financed over 8 to 10 months to ensure the premium is fully paid before its renewal, and there is generally no security required with IPF.
One insurance premium that IPF is commonly used for is workers compensation.
That’s because in some states (including NSW, Victoria and Queensland), employers who pay their annual premium in full are entitled to a 3% to 5% early bird discount.
But to qualify for the early bird discount, workers comp premiums need to be paid in full before the early bird due date arrives (typically around August/September).
So, by using IPF to make this payment upfront you can secure the early bird discount, which helps to offset the cost of IPF.
By taking this path, you can smooth out your business’s cash flow and redirect capital into income-generating investments.
If you’d like to find out more about financing options for IPF then get in touch today – especially if you want to be eligible for the workers comp early bird discount.
There’s no shortage of financial hurdles for businesses to overcome during these difficult times, so we’d love to help you out any way we can.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
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One of the most exciting things about moving into your own home is doing whatever you want with it, such as growing your own veggie patch. But did you know more than a third of Aussie backyards are contaminated with lead? Here’s how to get your soil tested for free.
Gardening is a bit like your journey into property ownership.
You spot a patch you like, start with modest seedlings/savings, and then with a little hard work, watch it grow into a yielding crop/asset.
A pre-COVID study shows that more than half of Australian households grow some of their own food – including fruit, vegetables and herbs – either at home or in a community garden.
And that figure is likely to have increased since lockdowns inspired many of us to get our hands dirty in the backyard.
You know those healthy vegetables you’re growing for your friends and your family to enjoy?
Well, it turns out that in more than 35% of yards, the soil those veggies are grown in is contaminated with concerning levels of lead (more than 300 mg/kg), according to a new study based on Macquarie University’s ongoing VegeSafe program.
The study found that homes that were aged, painted, situated near traffic-congested areas or located in the inner-city had the highest soil lead concentrations.
The good news is that there’s a free and easy way to get your home’s soil tested.
Simply head over to the VegeSafe website to find out more, or get straight into participating in the soil analysis study here.
Participants receive a formal report with their soil results and are provided with information and advice about what to do in the event that they have soils containing elevated concentrations of metals and metalloids.
The program does ask for a modest $20 donation from participants and, while it’s not mandatory, it is appreciated and helps support the program.
It’s also worth mentioning that the same group also run a similar DustSafe program, which aims to inform residents of potentially harmful metals and other contaminants in and around their home.
So, that’s how you can safely navigate a veggie patch.
If you’re looking for some sage guidance (see what we did there?) in terms of financing the purchase of that particular patch of land, get in touch and lettuce help you out today (sorry not sorry!).
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
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After 18 straight RBA cash rate cuts it can be easy to dismiss the notion that interest rates might rise again. But if the cash rate returned to mid-2019 levels, how much extra would an average new mortgage holder expect to pay each month? Let’s take a look.
They say what goes up, must come down.
But does what goes down, have to come up? Well, the big banks think so – and sooner than many expect.
While the RBA held the official cash rate at 0.10% this month – and reaffirmed its position that it does not expect to lift the cash rate until 2024 – there is growing speculation the next cash rate hike could come as early as late 2022.
In June, Commonwealth Bank and Westpac predicted a rate hike around late 2022 to early 2023. In fact, they expect the official cash rate to hit 1.25% in the third quarter of 2023 and 2024, respectively.
Meanwhile, NAB this week hiked its 2-,3- and 4-year fixed rates by up to 0.10% for owner-occupiers paying principal and interest.
Banks can increase fixed rates as a way of heading off potential RBA rate hikes. Generally, the shorter the term of the fixed-rate that’s increased (ie. if 2-year fixed rates are increased), the sooner a bank may believe the next rate hike will be.
So if the big banks’ economists are onto something here, how much extra money should you be factoring into your monthly mortgage repayments if the official cash rate rises to 1.25% by 2023/24?
The first thing to note is that the last time the RBA’s cash rate target was at 1.25% was June 2019 – so not that long ago (but boy, was it a different world back then!).
Modelling from Canstar, published on Domain, shows the average variable mortgage rate would lift from 3.21% to 4.36%, based on the current margin between the two rates.
Now, if you took out a $500,000 loan tomorrow, and the cash rate hit 1.25% in 2024, that modelling estimates your monthly repayments would increase $300 to $2464 per month.
ABC News modelling covers a similar scenario, with repayments up $324 per month.
That’s despite reducing your remaining loan balance to $468,770 after three years of repayments, and assuming the banks only add on the cash rate increase – and not any extra.
And then there’s of course the possibility that further RBA cash rate increases could soon follow.
If, for example, the average variable loan rate increased to 7.04% in 2031, where it was just a decade ago in 2011, Canstar estimates that same borrower who took out a $500,000 loan would pay $900 more in monthly repayments than they do now – even after a full decade’s worth of repayments.
It’s hard to imagine that interest rates could rise from the comfort of the current record low cash rate.
In fact, you have to go back as far as November 2010 to when the RBA last increased the cash rate (to 4.75%). We’ve had a run of 18 straight cuts since then.
But the big banks’ economists aren’t basing their modelling, predictions and fixed-term rate increases on nothing – and it pays to pay attention.
So if you’re worried about what rate increases could mean for your household budget in the coming years, get in touch with us today and we can run you through a number of options.
That might include fixing your interest rate for two, three, four or five years, or just fixing part of your mortgage (but not all of it).
Every household is different – it’s our job to help you find the right mortgage option for you!
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
If you’d like to buy your first home with just a 5% deposit and pay no lenders mortgage insurance (LMI), then you better act quick, as thousands of first home buyers are expected to rush to apply for the limited spots up for grabs.
And if you’re a single parent with dependent children, a similar scheme now allows you to purchase a home with just a 2% deposit without paying LMI, regardless of whether or not you’re a first home buyer.
In total, there are three federal government schemes that each released a fresh round of 10,000 spots on July 1.
Below we’ll unpack each of the schemes.
The First Home Loan Deposit Scheme (FHLDS) allows eligible first home buyers with only a 5% deposit to purchase a property without forking out for LMI.
This is because the federal government guarantees (to a participating lender) up to 15% of the value of the property purchased.
Not paying LMI can save buyers anywhere between $4,000 and $35,000, depending on the property price and deposit amount.
As with the other two schemes below, there are just 10,000 spots available for this scheme this financial year – and in previous years they’ve been allocated within a few months. So you’ve got to get in quick!
The New Home Guarantee scheme allows eligible first home buyers to build or purchase a new build with a 5% deposit.
All in all, it’s a fairly similar scheme to the FHLDS.
One of the key differences, however, is that the property price caps are higher (see here), to account for the extra expenses associated with building a new home.
The new Family Home Guarantee allows eligible single parents with dependants to build or purchase a home with a deposit of just 2% without paying LMI.
Unlike the two schemes above, you don’t have to be a first home buyer to qualify for this scheme.
Here’s a quick example of how it works.
John is a single parent with two young sons, Chris and David. John has found the perfect home for $460,000 but has struggled to save enough for the standard $92,000 deposit (20%) required while paying rent.
However, with the Family Home Guarantee, and on the success of his application with a lender, John could move into his dream home sooner, with just a $9,200 deposit (2%).
With the three no-LMI schemes now open, we can’t stress enough the importance of applying for them as soon as possible to avoid disappointment.
In recent years the 10,000 spots in the FHLDS have been snatched up within months, and we’ve had more than a few hopeful applicants reach out to us when it’s too late.
So to help avoid disappointment, get in touch with us today and we can help you determine which scheme is most suitable for you, and then help you apply for finance with a participating lender.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Small business owners wanting to buy a vehicle, asset or important piece of equipment and immediately write off the cost only have a few days to act this financial year.
Ah, deadlines: love ‘em or hate ‘em, they sure do get you moving.
And with June 30 just days away, time is running out for your business to take advantage of the federal government’s temporary full expensing scheme this financial year.
Temporary full expensing is basically an expanded version of the popular instant asset write-off scheme.
It allows businesses that are keen to invest in their future to immediately write off the full value of any eligible depreciable asset purchased, at any cost.
This helps with your cash flow as it allows you to reinvest the funds back into your business sooner.
There is a small catch though: the asset must be installed and ready to use by June 30 in order to be eligible for this financial year.
But rest assured that even if you do order the asset, and then miss the June 30 deadline because it doesn’t arrive in time, you can still write it off next financial year because the scheme is set to run until 30 June 2023.
To be eligible for temporary full expensing, the depreciating asset you purchase for your business must be:
– new or second-hand (if it’s a second-hand asset, your aggregated turnover must be below $50 million);
– first held by you at or after 7.30pm AEDT on 6 October 2020;
– first used, or installed ready for use, by you for a taxable purpose (such as a business purpose) by 30 June 2023; and
– used principally in Australia.
Being able to immediately write off assets is all well and good, but if you don’t have access to the funds to purchase them, the scheme won’t be of much use to you this financial year.
So if you’d like help obtaining finance to make the most of temporary full expensing ahead of the impending EOFY deadline, get in touch with us today!
We can present you with financing options that are well suited to your business’s needs now, and into the future.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
First home buyers can now purchase more expensive properties under the federal government’s hugely popular 5% deposit, no LMI scheme.
Single parents with dependent children are also welcoming the higher property price caps, which will apply to the federal government’s new Family Home Guarantee scheme, too.
The First Home Loan Deposit Scheme (FHLDS) allows eligible first home buyers with only a 5% deposit to purchase a property without forking out for lender’s mortgage insurance (LMI), which can save buyers anywhere between $4,000 and $35,000, depending on the property price and deposit amount.
The new Family Home Guarantee scheme, meanwhile, allows eligible single parents to build or purchase a home with a deposit of just 2% without paying LMI, regardless of whether or not they’re a first home buyer.
These schemes will run alongside a third home loan deposit scheme called the New Home Guarantee scheme, which allows eligible first home buyers to build or purchase a new build with a 5% deposit.
That scheme has even higher property price caps (see here), to account for the extra expenses associated with building a new home.
All three schemes have 10,000 spots available each from July 1, and spots are expected to fill up fast, so you’ll want to get in touch with us soon if you’re interested in applying.
So how much money can you spend and remain eligible for the FHLDS and Family Home Guarantee scheme?
Here’s a quick summary:
– NSW: $800,000 (Sydney, Newcastle/Lake Macquarie, Illawarra) and $600,000 (rest of state).
– VIC: $700,000 (Melbourne and Geelong) and $500,000 (rest of state).
– QLD: $600,000 (Brisbane, Gold Coast, Sunshine Coast) and $450,000 (rest of state).
– WA: $500,000 (Perth) and $400,000 (rest of state).
– SA: $500,000 (Adelaide) and $350,000 (rest of state).
– TAS: $500,000 (Hobart) and $400,000 (rest of state).
– ACT: $500,000.
– NT: $500,000.
If you’re interested in knowing how much the property price caps have increased, you can check it out here.
With all three schemes, allocations are generally granted on a “first come, first served” basis.
And it’s worth re-iterating that spots are limited and generally fill up fast.
So if you’re a first home buyer or single parent looking to crack into the property market sooner rather than later, get in touch today and we can explain the schemes to you in more detail.
And when July 1 rolls around, we can help you apply for finance through a participating lender.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
An increasing number of Australians are prioritising larger homes and bigger blocks in their house-hunting endeavours since the pandemic began. But where to look? Well, a new search tool helps you calculate which suburbs offer the best bang for your buck.
‘Give me a home among the gumtrees …’
There’s no denying that COVID-19 has resulted in a widespread shift in attitudes on how a family home can contribute to a better work/life balance.
With flexible work arrangements becoming the norm, families are focusing their house-hunting efforts on suburbs that offer larger homes with home offices, or simply just a safe, secluded and spacious place to raise the kids.
But you don’t necessarily have to move to the outskirts of a city for a bigger, cheaper block.
You just need to know which suburbs are most likely to help you unearth a hidden gem.
This new realestate.com.au tool (mobile link here), which calculates each suburb’s median estimated price per square metre (based on plot size), can help you zero in on suburbs which give you more bang for your buck.
That’s because not only does it give you the median valuation per square metre for the suburb you select, but it also gives you the same data for the immediate surrounding suburbs.
This can allow you to shift your search focus to another nearby suburb if it offers a more attractive estimated price per square metre.
For example, Teneriffe is one of Brisbane’s most expensive suburbs, and topped that city’s list with a median estimated property price of $5196/sqm based on a median plot size of 441sqm.
However, about 400 metres away is the suburb of Bowen Hills, with a median estimated property price of just $1621/sqm based on an even bigger median plot size of 652sqm.
Not bad, when you consider the world’s fastest men’s 400-metre dash is 43.03 seconds…
Here’s the thing: chances are you won’t be the only one on the hunt for a bargain.
In fact, properties are selling at record speed at the moment, with the average number of days spent listed on real estate sites falling to an historic low of 32 days in May.
To help increase your chances of securing a property in this hot market, it’s a good idea to explore your borrowing options early.
So if you’d like to find out more about what you need to do to help make your home-ownership dreams a reality, get in touch today. We’d love to help out.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Australian businesses have shifted things up a gear this year, with new asset finance figures revealing a 187% rise in light commercial vehicle purchases since January.
The spike in business vehicle financing was driven by sales of all classes of vehicles, no doubt partly due to SMEs making the most of the federal government’s temporary full expensing scheme (aka instant asset write-off) ahead of June 30.
Here’s a quick snapshot of the Commonwealth Bank’s (CBA) business financing figures by vehicle type:
– Light commercial vehicles increased 187%.
– Utes and vans increased 85%.
– Heavy trucks increased 50%.
– New motor vehicles including passenger and SUVs increased 36%.
“We’ve seen the federal government’s instant asset write-off scheme support many of our customers in the past year,” explains CBA Executive General Manager, Business Lending, Clare Morgan.
“There’s a general expectation that we’ll see an uplift in both financing and registrations of business vehicles as we approach the end of financial year.”
Temporary full expensing is basically an expanded version of the popular instant asset write-off scheme.
It allows businesses, both big and small, to immediately write off any eligible depreciable asset until 30 June 2023 (recently extended from 30 June 2022 in the federal budget).
This can help improve your cash flow as it allows you to reinvest the funds back into your business sooner.
But here’s the catch: the asset must be installed and ready to use by June 30 in order to be eligible for this financial year.
If you’d like help obtaining finance that’s gentle on your business’s cash flow, and helps you achieve your long-term goals, please get in touch today so we can help you beat the EOFY deadline.
We work with a broad range of lenders and would love to present you with financing options that are well suited to your business’s needs now, and into the future.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
