Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Well, Cam obviously we've had some interest rate cuts recently,
which has been great.
Speaker 2 (00:04):
I mean, we're dancing in the street right, Oh, we
love it.
Speaker 1 (00:06):
Everyone's been talking about it, waiting for it, you know,
there's been so much chatter around it, and I think,
you know, there was some expectations around how that would
translate and what that would look like most definitely for
some people, and I think perhaps it hasn't quite worked
out the way that they were expecting in terms of
repayments and the change.
Speaker 2 (00:25):
Then don't we just feel a little bit let down too?
A little bit?
Speaker 1 (00:28):
And Bushy Martin is from No How Property Finance and
can talk to us a bit about this high.
Speaker 3 (00:33):
Bushy, Hey, how are you Cam real?
Speaker 1 (00:37):
Yeah, we're good. Now, Look, can you tell us a
little bit about this and firstly explaining the concept of
borrowing capacity and how that's linked to interest rates.
Speaker 3 (00:46):
Yeah, sure, guys. I want to give you a bit
of an RBA pub test version because it's a lot
of easier understand. So imagine you walk into your local
with a one hundred bucks in your product. You're planning
and buying a stake and washing it down with a
couple of Coldi's no dramas. That's your owncapacity. It's what
you can afford based on your income and what things cost.
But here's a twist. Every pub is like a different bank,
charging different prices for the same steak in the beer.
(01:09):
So you can get more with some bank pubs less
with others. Now, if the part actually drops its prices,
suddenly it can afford more same hundred bucks more in
your belly. Same with interest rates. When the RBA cuts
the cash rate, yourll onary payments should drop and they
should boost how much you can borrow. But it all
depends on how much the cut your actual bank passes
(01:29):
on and when they do it, adding how much they
think you spend, because some assume you're living up on
lobster and champagne, even if you're stretching a dollar on
veging my toast. So even if the RBA cuts the
price of beer, you might still walk out thirsty.
Speaker 2 (01:43):
Yeah, that's such a good it's amazing.
Speaker 4 (01:46):
And you know, we know this, and we've spoken about
this before, and you know the banks, and we love
the banks, of course, So when the interest rates are cut,
it takes some time for those banks to pass that on.
They go up like that it changes in a second, doesn't.
Speaker 3 (02:03):
It one out of per center? That's funny how they're
happy to pass on extra cosmics very very slow from
their budget.
Speaker 1 (02:11):
Oh absolutely, yes, and so talk about tell us about
the rate reductions and why they aren't helping us with
borrowing capacity and kind of how those expectations that people
have haven't quite been met.
Speaker 4 (02:24):
Yeah.
Speaker 3 (02:24):
Well, yeah, as you've already said, there's a lot of
buyers and refinances are really sprashing their heads on this
because on the surface of rycock should mean a bit
of a pay rise. You'd expected to a fall more right,
But instead of opening doors, it's like winning a free
meal only be told that you still have to pay
for the drinks. And now there's a cover charge for Countley.
So here's what's really going on. Yes, rates have dropped,
that many banks have suddenly tightened the screws on everything
(02:46):
else behind the scenes. So firstly, I've increased what they
think you spend using a thing called hand or the
housing expenditure measure. So even if you're a threepy legend,
they assume you're smashing AVO on uber eight five nights
a week. We've still got the three percent servicing buffet
from the COVID days. Now, that's like training with ankle weights.
Even though the storm has passing the coach, we've got
(03:07):
to take them off. But here's where it really gets cheeky,
because even if you find a place you love, banks
in our low boiling property valuations, especially for ninety to
ninety five percent loans, so they get nervous and they stay. Actually,
we reckon this property is worthless, so we're going to
reduce the risk. So even if you agreed on a
fair price, you might suddenly need an extra twenty to
eighty grand or you're out. Now. For investors, they thought
(03:29):
lower rates would also boost their boring, But lower interest
rates means less tax deductions, so negative gearing benefit shrink
and their borrying power goes down as well. So, yeah,
the RBA is definitely loosing the tap of the banks
are clamping the hoe. So until the system adjusts there's
a bit more competition, those rates won't hit your wallet
like you'd expect.
Speaker 1 (03:47):
Yeah, all these little things that go on in the
background that people just would.
Speaker 2 (03:50):
Not know about.
Speaker 1 (03:51):
You know, Bushy, what's the number one thing you would
say to people in this situation?
Speaker 3 (03:56):
Yeah, really simply, it's something I've said for a long time,
and that is I don't take one Noh's gospel.
Speaker 2 (04:01):
Guys.
Speaker 3 (04:02):
A knock back from one bank doesn't mean you're dreams dead.
You're just standing at the long gate. And it's a
bit like going to a baker to out and only
going to sell your banana bread. Well, there's forty different
bank bakeries and two thousand different loan solutions out there,
so make sure that you're working with someone who understands
(04:23):
the ins and outs of all the options that are
out there. Because there's an over fifty five percent variation
across the banks in terms of how much you can
borrow basically exactly the same financial position. So you know,
it's really important to get with a matchmaker. Really, it
takes advantage of that, and there even some specialist loan
solutions out there that will let you borrow up at
(04:44):
ninety eight percent no mortgage insurance, guys. So, so first
time buyers, if you're talking to someone who knows the
ins and outs where the opportunities are, you're going to
be okay. So don't throw it on luck. Get a
really savvy mortgage breaker on your team who understands tips
and the and the traps, and you're always gonna put
yourself in a position.
Speaker 1 (05:04):
Beautiful and don't just settle for the banana brand. Exactly, Bushy,
that was so good. The way you explained all that
was excellent. Thank you so much for doing that, and
thanks for joining us.
Speaker 3 (05:18):
Always a pleasure. I love your show, guys.
Speaker 1 (05:19):
Thank you Bushy Martin from No How Property Finance and
now you can see and hear more from Bushy Marton
on the Property Hub YouTube channel or bushymartin dot com,
dot U Forward Slash podcasts
Well, Cam obviously we've had some interest rate cuts recently,
which has been great.
Speaker 2 (00:04):
I mean, we're dancing in the street right, Oh, we
love it.
Speaker 1 (00:06):
Everyone's been talking about it, waiting for it, you know,
there's been so much chatter around it, and I think,
you know, there was some expectations around how that would
translate and what that would look like most definitely for
some people, and I think perhaps it hasn't quite worked
out the way that they were expecting in terms of
repayments and the change.
Speaker 2 (00:25):
Then don't we just feel a little bit let down too?
A little bit?
Speaker 1 (00:28):
And Bushy Martin is from No How Property Finance and
can talk to us a bit about this high.
Speaker 3 (00:33):
Bushy, Hey, how are you Cam real?
Speaker 1 (00:37):
Yeah, we're good. Now, Look, can you tell us a
little bit about this and firstly explaining the concept of
borrowing capacity and how that's linked to interest rates.
Speaker 3 (00:46):
Yeah, sure, guys. I want to give you a bit
of an RBA pub test version because it's a lot
of easier understand. So imagine you walk into your local
with a one hundred bucks in your product. You're planning
and buying a stake and washing it down with a
couple of Coldi's no dramas. That's your owncapacity. It's what
you can afford based on your income and what things cost.
But here's a twist. Every pub is like a different bank,
charging different prices for the same steak in the beer.
(01:09):
So you can get more with some bank pubs less
with others. Now, if the part actually drops its prices,
suddenly it can afford more same hundred bucks more in
your belly. Same with interest rates. When the RBA cuts
the cash rate, yourll onary payments should drop and they
should boost how much you can borrow. But it all
depends on how much the cut your actual bank passes
(01:29):
on and when they do it, adding how much they
think you spend, because some assume you're living up on
lobster and champagne, even if you're stretching a dollar on
veging my toast. So even if the RBA cuts the
price of beer, you might still walk out thirsty.
Speaker 2 (01:43):
Yeah, that's such a good it's amazing.
Speaker 4 (01:46):
And you know, we know this, and we've spoken about
this before, and you know the banks, and we love
the banks, of course, So when the interest rates are cut,
it takes some time for those banks to pass that on.
They go up like that it changes in a second, doesn't.
Speaker 3 (02:03):
It one out of per center? That's funny how they're
happy to pass on extra cosmics very very slow from
their budget.
Speaker 1 (02:11):
Oh absolutely, yes, and so talk about tell us about
the rate reductions and why they aren't helping us with
borrowing capacity and kind of how those expectations that people
have haven't quite been met.
Speaker 4 (02:24):
Yeah.
Speaker 3 (02:24):
Well, yeah, as you've already said, there's a lot of
buyers and refinances are really sprashing their heads on this
because on the surface of rycock should mean a bit
of a pay rise. You'd expected to a fall more right,
But instead of opening doors, it's like winning a free
meal only be told that you still have to pay
for the drinks. And now there's a cover charge for Countley.
So here's what's really going on. Yes, rates have dropped,
that many banks have suddenly tightened the screws on everything
(02:46):
else behind the scenes. So firstly, I've increased what they
think you spend using a thing called hand or the
housing expenditure measure. So even if you're a threepy legend,
they assume you're smashing AVO on uber eight five nights
a week. We've still got the three percent servicing buffet
from the COVID days. Now, that's like training with ankle weights.
Even though the storm has passing the coach, we've got
(03:07):
to take them off. But here's where it really gets cheeky,
because even if you find a place you love, banks
in our low boiling property valuations, especially for ninety to
ninety five percent loans, so they get nervous and they stay. Actually,
we reckon this property is worthless, so we're going to
reduce the risk. So even if you agreed on a
fair price, you might suddenly need an extra twenty to
eighty grand or you're out. Now. For investors, they thought
(03:29):
lower rates would also boost their boring, But lower interest
rates means less tax deductions, so negative gearing benefit shrink
and their borrying power goes down as well. So, yeah,
the RBA is definitely loosing the tap of the banks
are clamping the hoe. So until the system adjusts there's
a bit more competition, those rates won't hit your wallet
like you'd expect.
Speaker 1 (03:47):
Yeah, all these little things that go on in the
background that people just would.
Speaker 2 (03:50):
Not know about.
Speaker 1 (03:51):
You know, Bushy, what's the number one thing you would
say to people in this situation?
Speaker 3 (03:56):
Yeah, really simply, it's something I've said for a long time,
and that is I don't take one Noh's gospel.
Speaker 2 (04:01):
Guys.
Speaker 3 (04:02):
A knock back from one bank doesn't mean you're dreams dead.
You're just standing at the long gate. And it's a
bit like going to a baker to out and only
going to sell your banana bread. Well, there's forty different
bank bakeries and two thousand different loan solutions out there,
so make sure that you're working with someone who understands
(04:23):
the ins and outs of all the options that are
out there. Because there's an over fifty five percent variation
across the banks in terms of how much you can
borrow basically exactly the same financial position. So you know,
it's really important to get with a matchmaker. Really, it
takes advantage of that, and there even some specialist loan
solutions out there that will let you borrow up at
(04:44):
ninety eight percent no mortgage insurance, guys. So, so first
time buyers, if you're talking to someone who knows the
ins and outs where the opportunities are, you're going to
be okay. So don't throw it on luck. Get a
really savvy mortgage breaker on your team who understands tips
and the and the traps, and you're always gonna put
yourself in a position.
Speaker 1 (05:04):
Beautiful and don't just settle for the banana brand. Exactly, Bushy,
that was so good. The way you explained all that
was excellent. Thank you so much for doing that, and
thanks for joining us.
Speaker 3 (05:18):
Always a pleasure. I love your show, guys.
Speaker 1 (05:19):
Thank you Bushy Martin from No How Property Finance and
now you can see and hear more from Bushy Marton
on the Property Hub YouTube channel or bushymartin dot com,
dot U Forward Slash podcasts
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