Unlock financial success with insights from Douglas’ finance expert Alex Cook

In the ever-evolving world of finance, homeowners and investors face a multitude of choices. Local finance broker Alex Cook from Williams Cete & Co provides insight and valuable guidance for those aiming to refine their financial strategies.

Amidst the age-old debate of fixed versus variable rates, many borrowers currently ponder whether to opt for stability or flexibility in their mortgage arrangements.

Mr Cook pointed out that over the past 18 months, homeowners have grappled with the aftermath of the ‘fixed rate cliff’, witnessing over $300 billion in low fixed rates expiring.

“This has led to significant increases in loan repayments for those previously fixed at 2-3 percent,” Mr Cook continued. “However, amid 13 consecutive rate increases, the Reserve Bank of Australia (RBA) has opted to hold the official cash rate at 4.35 percent for another month.

“This stability brings relief to mortgage holders, with predictions of no further rate hikes and the prediction of no further rate increases later this year. 

“Consequently, individuals on variable interest rates stand to benefit from lower repayments, while prospective buyers or those considering refinancing may enjoy increased borrowing power.”

Refinancing opportunities

With interest rates holding steady, Mr Cook explained that banks are anticipated to jockey for business by offering lower rates, cash rebates, and fee waivers. 

He advises borrowers to capitalise on this competitive environment by exploring refinancing options. 

“It is recommended for borrowers to speak to their brokers or advisors and make sure they are still with the right bank or if there are better options elsewhere,” Mr Cook emphasised. 

“Even a marginal reduction in interest rates can yield substantial interest savings over the long term.

“Refinancing presents an opportunity for homeowners to leverage equity for various purposes.”

Investment prospects

Amidst high demand for rental properties in the region, Mr Cook highlighted that investors are presented with favourable opportunities.

He pointed out that we are seeing high rental yields coming from relatively cheap properties. “This can be an attractive prospect for buyers who don’t want a large mortgage or don’t have a large deposit but do want to get a foot in the property investment door,” he added.

Government schemes

Government initiatives seek to ease the path to homeownership by reducing deposit requirements and eliminating mortgage insurance costs. 

Mr Cook highlighted key schemes, including the doubling of the First Home Owners Grant to $30k, aiding new homeowners to enter the market swiftly. 

Additionally, the Family Home Guarantee enables single parents to purchase with a 2 percent deposit and the Regional Home Guarantee allows regional first-time buyers in North QLD to secure a home with just a 5 percent deposit.