Interest rate collapse helps home buyers but hits savers

The pandemic recession will end up delivering savings worth tens of thousands of dollars to the nation's home buyers due to a collapse in mortgage interest rates, but will also cruel the savings plans of millions more.

At the start of the year a person with a $300,000, 25-year mortgage faced an average variable mortgage rate of 3.73 per cent. The monthly repayments on such a loan were $1539 and over the life of the mortgage the buyer would repay $461,739. The Reserve Bank has signalled it is not expecting to increase official interest for at least 3 years.

Low rates are expected to be the norm for coming years. The Reserve Bank has signalled it is not expecting to increase official interest for at least three years. The average regular saving rate was 1.12 per cent at the start of the year but it is now just 0.43 per cent. For a person with $10,000 in their account, the drop in interest equates to a $740 in compound savings over a decade.

Source: Loan Digest (loandigest.net)

swrighteconomy 11 Practical ways to stop money worries and free yourself...learn how to save and invest

swrighteconomy Thanks to the Morrison government the cliff is coming and he is driving the bus

swrighteconomy 'Savers' = Retirees. And most retirees are not independently wealthy!

swrighteconomy 👎👎👎

Australia Latest News, Australia Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Interest rate collapse helps home buyers but hits saversBy year's end, the average interest rate on a $300,000 mortgage had fallen to 3.32 per cent. The monthly repayment is $1473 with the buyer repaying $441,920 over the life of the mortgage. Not helpful if you have just lost your job , and find yourself on the reduced job seeker to support your family Savers should just invest in shares. Fixed.
Source: theage - 🏆 8. / 77 Read more »

The cold reality of Sydney's property market as buyers issued warningRecord low interest rates and a bumper housing surge in Sydney prompts warnings to first home buyers about taking on too much debt. I don't get it, if buyers stopped buying and paying these ridiculous prices vendors would have to drop their prices. Now we hear the buyers are taking on to much debt. 🤷‍♂️ With unemployment at pre Covid levels (unbelievably good performance!) maybe property should be booming Even with rates so small we still see stagnation of wage growth, inflation, higher cost of living no money for family holidays- might seem fine now and next couple years while rates remain low, but biting off more than you can chew may f you in the a 5-10 years from now.
Source: abcnews - 🏆 5. / 83 Read more »

'Buyers are confronting a sense of FOMO': Aussie property prices rise at fastest rate in 17 yearsAustralia&x27;s property prices are rising at the fastest rate in seventeen years as historically low interest rates and restricted supply spur buyers into action. This tweet is a little ✨ pushy ✨🐸 Long live capitalism.
Source: 9NewsAUS - 🏆 10. / 72 Read more »

Mortgage rates: Have we reached the bottom?Australian housing values are surging at their fastest rate in 32 years – but have we reached the bottom in the war on low home loan interest rates? Money printing foreverrrrrrrrr!
Source: newscomauHQ - 🏆 9. / 77 Read more »

Low rates to drive house prices up 17 per cent this yearAustralian house prices are tipped to grow at their fastest pace since the late 1980s, led by a 19 per cent surge across the Sydney market this year | swrighteconomy swrighteconomy Where’s that predicted slump? swrighteconomy A lot of bad news this week this tops it swrighteconomy Time to adopt NZ regulations
Source: smh - 🏆 6. / 80 Read more »