Latest news with #RichardWhitten
News.com.au
4 days ago
- Business
- News.com.au
Budget mistake puts half of home buyers at risk
Panicked first-home buyers are going for broke in the housing market, blowing their budgets to the point where they are in a dangerous financial position of having almost no savings. A new Finder report revealed almost half (47 per cent) of first-home buyers polled nationally went above their budget, up from 38 per cent in 2022, and many totally drained their savings in the process. It's a position that means they will be vulnerable to even the slightest money hiccup and interest rate change and would be financially devastated if their income were to decrease. 'Having a savings buffer is key to financial security, if these Aussies lose their jobs or are hit with an unexpected cost, they will be extremely vulnerable,' said Richard Whitten, Finder loans expert. He explained that first-home buyers rarely planned to empty their savings accounts and were often exceeding their budgets after facing enormous financial pressure. 'Aussies are being forced to take more financial risks,' Mr Whitten said. 'Most buyers plan to have some savings left over after the keys have changed hands, (but) with prices continuing to rise, this is no longer realistic.' Finder's First Home Buyer Report 2025 revealed the average first-time buyer who went over their budget spent about $63,000 more than they anticipated. One in 10 spent a whopping six figures more than they expected to, while one in five spent $50,000 more they had budgeted. The result of this spending was frightening: one in three of those who had bought their first home said they had less than $10,000 in savings. Half of the buyers in this category had zero savings left. Mr Whitten said first-home buyers who overstretched their finances to get into the market would pay a high price over the long term. 'Stretching beyond your means might get you the keys sooner, but it can lock you into years of financial strain,' he said. Pressure to spend more has coincided with incredible price rises over recent years, particularly during the Covid outbreak. PropTrack data showed house prices increased by about 70 per cent over five years in Brisbane, Adelaide and Perth. The increase in Sydney over the same period was about 50 per cent, while Melbourne had the smallest increase of a major capital at 15 per cent since 2020. 'As house prices surge, first-home buyers are increasingly forced to empty their savings just to enter the market,' Mr Whitten said. 'This leaves them financially stretched – and vulnerable to stress – right at the start of their home ownership journey.' First-home buyer fears may be contributing to their propensity to overspend. When Finder last surveyed first-home buyers in 2022, many cited the 'fear of missing out' as a key driver. A mix of peer pressure and concern that property prices would rise faster than wages prompted some to buy before they were priced out. Since then, property price anxiety has only grown. It was a common concern for 31 per cent of buyers in 2022, compared to 38 per cent today. Mr Whitten said a first-home was a risky target for overspending. 'The early years of the home buying journey are when buyers are most vulnerable. Their savings are gone and their repayments are mostly interest.' Mr Whitten added that Aussies should aim to buy within their means even if it meant delaying home ownership a few more years.
Yahoo
24-05-2025
- Business
- Yahoo
Simple reason Aussies cop $76m mortgage hit
Australian mortgage holders will give the major banks $76m in additional payments due to the 10 days it takes for them to pass on a rate cut. New figures released by Finder shows the big four banks hold approximately $1.13 trillion in household debt, with a 25 basis point cut earning roughly $7.6m a day on the debt. This means, the 10-day delay on average it takes for the banks to pass on an interest-rate cut will cost households $76m. Finder home loan expert Richard Whitten said even with the 10-day delay, the major banks were so far passing on the rate cut, something they had not always historically done. 'Of course, the banks aren't setting rates to be generous. They're responding to their own funding costs,' he said. 'That is, their costs for borrowing money to fund customers' loans and other business.' 'And how much profit they think they can get on top of that. The cost and profit calculations of each institution are going to look a little different.' The Reserve Bank of Australia (RBA) announced on Tuesday, May 20 that it was cutting the official cash rate by 25 basis points to 3.85 per cent. It follows a fall in Australia's headline inflation rate to 2.4 per cent in the March quarter, while the all-important trimmed mean inflation rate – which removes volatile components such as electricity and fuel costs – came in at 2.9 per cent. Either rate falls within the RBA's inflation target rate of 2 to 3 per cent. How much will Aussies save? How much Aussies will save after the rate cut will depend on the size of their mortgages. Those with a $500,00 debt will save about $76 a month, while those with a $750,000 mortgage are tipped to be $114 better off and Aussies who borrowed $1m will save about $152 a month. Finder head of consumer research Graham Cooke said more than one in two homeowners didn't even know their own rate. 'Mortgage repayments have a huge effect on the monthly cash flow of Australian households, yet more than half are unaware how much they could be overpaying each month,' he said. 'With two rate cuts in three months, the average homeowner could be saving thousands.' He said the average borrower stood to save about $213 per month – $2553 annually – thanks to the interest rate cuts in February and May. Mr Cooke said loyalty to your lender could be expensive. 'Banks rarely reward complacency, so reviewing your mortgage once a year should be as routine as your tax return,' he said. When will a rate cut be passed through? Within 24 hours of the RBA announcing a rate cut, 30 lenders said they were passing on the full rate cut. This included all four major banks that within 30 minutes of the announcement informed customers that the rate cut would be passed on. NAB confirmed it would decrease its standard variable home loan interest rate by 0.25 per cent, effective from Friday, May 30, with the 10-day delay in line with previous changes to interest rates in the wake of a cash rate change. ANZ followed, saying it would also be dropping its variable rate by 0.25 per cent, effective on May 30. Commonwealth Bank of Australia has moved in line with the other majors and will also drop variable interest rates on home loans by 0.25 per cent. Westpac told customers it too would pass on the rate cut in full to mortgage holders and savers, albeit a touch slower. Westpac explained to NewsWire it is faster to move on savings rates compared with mortgages due to the complexity of the different products. Savings rates are applied universally to every customer, while mortgage holders have differing rates depending on their circumstances. It was the only one of the major banks to make an announcement on savings rates. From June 3, the bank will decrease its variable interest rates by 0.25 per cent for new and existing customers. Bendigo Bank says it will reduce the cash rate in line with the majors from June 6. Australia's fifth largest bank, Macquarie, passed on the rate cut on Friday. Error while retrieving data Sign in to access your portfolio Error while retrieving data
Sky News AU
24-05-2025
- Business
- Sky News AU
Inflation, interest rates: Simple reason Aussies cop $76m mortgage hit
Australian mortgage holders will give the major banks $76m in additional payments due to the 10 days it takes for them to pass on a rate cut. New figures released by Finder shows the big four banks hold approximately $1.13 trillion in household debt, with a 25 basis point cut earning roughly $7.6m a day on the debt. This means, the 10-day delay on average it takes for the banks to pass on an interest-rate cut will cost households $76m. Finder home loan expert Richard Whitten said even with the 10-day delay, the major banks were so far passing on the rate cut, something they had not always historically done. 'Of course, the banks aren't setting rates to be generous. They're responding to their own funding costs,' he said. 'That is, their costs for borrowing money to fund customers' loans and other business.' 'And how much profit they think they can get on top of that. The cost and profit calculations of each institution are going to look a little different.' The Reserve Bank of Australia (RBA) announced on Tuesday, May 20 that it was cutting the official cash rate by 25 basis points to 3.85 per cent. It follows a fall in Australia's headline inflation rate to 2.4 per cent in the March quarter, while the all-important trimmed mean inflation rate – which removes volatile components such as electricity and fuel costs – came in at 2.9 per cent. Either rate falls within the RBA's inflation target rate of 2 to 3 per cent. How much will Aussies save? How much Aussies will save after the rate cut will depend on the size of their mortgages. Those with a $500,00 debt will save about $76 a month, while those with a $750,000 mortgage are tipped to be $114 better off and Aussies who borrowed $1m will save about $152 a month. Finder head of consumer research Graham Cooke said more than one in two homeowners didn't even know their own rate. 'Mortgage repayments have a huge effect on the monthly cash flow of Australian households, yet more than half are unaware how much they could be overpaying each month,' he said. 'With two rate cuts in three months, the average homeowner could be saving thousands.' He said the average borrower stood to save about $213 per month – $2553 annually – thanks to the interest rate cuts in February and May. Mr Cooke said loyalty to your lender could be expensive. 'Banks rarely reward complacency, so reviewing your mortgage once a year should be as routine as your tax return,' he said. When will a rate cut be passed through? Within 24 hours of the RBA announcing a rate cut, 30 lenders said they were passing on the full rate cut. This included all four major banks that within 30 minutes of the announcement informed customers that the rate cut would be passed on. NAB confirmed it would decrease its standard variable home loan interest rate by 0.25 per cent, effective from Friday, May 30, with the 10-day delay in line with previous changes to interest rates in the wake of a cash rate change. ANZ followed, saying it would also be dropping its variable rate by 0.25 per cent, effective on May 30. Commonwealth Bank of Australia has moved in line with the other majors and will also drop variable interest rates on home loans by 0.25 per cent. Westpac told customers it too would pass on the rate cut in full to mortgage holders and savers, albeit a touch slower. Westpac explained to NewsWire it is faster to move on savings rates compared with mortgages due to the complexity of the different products. Savings rates are applied universally to every customer, while mortgage holders have differing rates depending on their circumstances. It was the only one of the major banks to make an announcement on savings rates. From June 3, the bank will decrease its variable interest rates by 0.25 per cent for new and existing customers. Bendigo Bank says it will reduce the cash rate in line with the majors from June 6. Australia's fifth largest bank, Macquarie, passed on the rate cut on Friday.
News.com.au
24-05-2025
- Business
- News.com.au
Mortgage holders tipped to pay their bank millions in additional payments
Australian mortgage holders will give the major banks $76m in additional payments due to the 10 days it takes for them to pass on a rate cut. New figures released by Finder shows the big four banks hold approximately $1.13 trillion in household debt, with a 25 basis point cut earning roughly $7.6m a day on the debt. This means, the 10-day delay on average it takes for the banks to pass on an interest-rate cut will cost households $76m. Finder home loan expert Richard Whitten said even with the 10-day delay, the major banks were so far passing on the rate cut, something they had not always historically done. 'Of course, the banks aren't setting rates to be generous. They're responding to their own funding costs,' he said. 'That is, their costs for borrowing money to fund customers' loans and other business.' 'And how much profit they think they can get on top of that. The cost and profit calculations of each institution are going to look a little different.' The Reserve Bank of Australia (RBA) announced on Tuesday, May 20 that it was cutting the official cash rate by 25 basis points to 3.85 per cent. It follows a fall in Australia's headline inflation rate to 2.4 per cent in the March quarter, while the all-important trimmed mean inflation rate – which removes volatile components such as electricity and fuel costs – came in at 2.9 per cent. Either rate falls within the RBA's inflation target rate of 2 to 3 per cent. How much will Aussies save? How much Aussies will save after the rate cut will depend on the size of their mortgages. Those with a $500,00 debt will save about $76 a month, while those with a $750,000 mortgage are tipped to be $114 better off and Aussies who borrowed $1m will save about $152 a month. Finder head of consumer research Graham Cooke said more than one in two homeowners didn't even know their own rate. 'Mortgage repayments have a huge effect on the monthly cash flow of Australian households, yet more than half are unaware how much they could be overpaying each month,' he said. 'With two rate cuts in three months, the average homeowner could be saving thousands.' He said the average borrower stood to save about $213 per month – $2553 annually – thanks to the interest rate cuts in February and May. Mr Cooke said loyalty to your lender could be expensive. 'Banks rarely reward complacency, so reviewing your mortgage once a year should be as routine as your tax return,' he said. When will a rate cut be passed through? Within 24 hours of the RBA announcing a rate cut, 30 lenders said they were passing on the full rate cut. This included all four major banks that within 30 minutes of the announcement informed customers that the rate cut would be passed on. NAB confirmed it would decrease its standard variable home loan interest rate by 0.25 per cent, effective from Friday, May 30, with the 10-day delay in line with previous changes to interest rates in the wake of a cash rate change. ANZ followed, saying it would also be dropping its variable rate by 0.25 per cent, effective on May 30. Commonwealth Bank of Australia has moved in line with the other majors and will also drop variable interest rates on home loans by 0.25 per cent. Westpac told customers it too would pass on the rate cut in full to mortgage holders and savers, albeit a touch slower. Westpac explained to NewsWire it is faster to move on savings rates compared with mortgages due to the complexity of the different products. Savings rates are applied universally to every customer, while mortgage holders have differing rates depending on their circumstances. It was the only one of the major banks to make an announcement on savings rates. From June 3, the bank will decrease its variable interest rates by 0.25 per cent for new and existing customers. Bendigo Bank says it will reduce the cash rate in line with the majors from June 6. Australia's fifth largest bank, Macquarie, passed on the rate cut on Friday.
Perth Now
24-05-2025
- Business
- Perth Now
Simple reason Aussies cop $76m mortgage hit
Australian mortgage holders will give the major banks $76m in additional payments due to the 10 days it takes for them to pass on a rate cut. New figures released by Finder shows the big four banks hold approximately $1.13 trillion in household debt, with a 25 basis point cut earning roughly $7.6m a day on the debt. This means, the 10-day delay on average it takes for the banks to pass on an interest-rate cut will cost households $76m. Finder home loan expert Richard Whitten said even with the 10-day delay, the major banks were so far passing on the rate cut, something they had not always historically done. 'Of course, the banks aren't setting rates to be generous. They're responding to their own funding costs,' he said. 'That is, their costs for borrowing money to fund customers' loans and other business.' 'And how much profit they think they can get on top of that. The cost and profit calculations of each institution are going to look a little different.' Australians will save $91 a month on an average mortgage rate after the rate cut. NewsWire / Nicholas Eagar Credit: NewsWire The Reserve Bank of Australia (RBA) announced on Tuesday, May 20 that it was cutting the official cash rate by 25 basis points to 3.85 per cent. It follows a fall in Australia's headline inflation rate to 2.4 per cent in the March quarter, while the all-important trimmed mean inflation rate – which removes volatile components such as electricity and fuel costs – came in at 2.9 per cent. Either rate falls within the RBA's inflation target rate of 2 to 3 per cent. How much will Aussies save? How much Aussies will save after the rate cut will depend on the size of their mortgages. Those with a $500,00 debt will save about $76 a month, while those with a $750,000 mortgage are tipped to be $114 better off and Aussies who borrowed $1m will save about $152 a month. Finder head of consumer research Graham Cooke said more than one in two homeowners didn't even know their own rate. Australia's Cash Rate 2022 'Mortgage repayments have a huge effect on the monthly cash flow of Australian households, yet more than half are unaware how much they could be overpaying each month,' he said. 'With two rate cuts in three months, the average homeowner could be saving thousands.' He said the average borrower stood to save about $213 per month – $2553 annually – thanks to the interest rate cuts in February and May. Mr Cooke said loyalty to your lender could be expensive. 'Banks rarely reward complacency, so reviewing your mortgage once a year should be as routine as your tax return,' he said. When will a rate cut be passed through? Within 24 hours of the RBA announcing a rate cut, 30 lenders said they were passing on the full rate cut. This included all four major banks that within 30 minutes of the announcement informed customers that the rate cut would be passed on. The major banks are passing on the interest rate cut. NewsWire Credit: NCA NewsWire NAB confirmed it would decrease its standard variable home loan interest rate by 0.25 per cent, effective from Friday, May 30, with the 10-day delay in line with previous changes to interest rates in the wake of a cash rate change. ANZ followed, saying it would also be dropping its variable rate by 0.25 per cent, effective on May 30. Commonwealth Bank of Australia has moved in line with the other majors and will also drop variable interest rates on home loans by 0.25 per cent. Westpac told customers it too would pass on the rate cut in full to mortgage holders and savers, albeit a touch slower. Westpac explained to NewsWire it is faster to move on savings rates compared with mortgages due to the complexity of the different products. Savings rates are applied universally to every customer, while mortgage holders have differing rates depending on their circumstances. It was the only one of the major banks to make an announcement on savings rates. From June 3, the bank will decrease its variable interest rates by 0.25 per cent for new and existing customers. Bendigo Bank says it will reduce the cash rate in line with the majors from June 6. Australia's fifth largest bank, Macquarie, passed on the rate cut on Friday.
