An investment in knowledge pays the best interest.

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The RBA held rates this week at 1.5%.

So why are my loan repayments increasing?

There have been over 20 different rate rises by all the banks over a majority of loans just in the last 2 months.

How is that possible and why?

The reason is that APRA (which regulates the banks) on behalf of the RBA wants to make sure the “housing bubble” doesn’t burst.

So they have insisted the banks structure their lending products accordingly.

How?

  1. By increasing the rates on interest-only loans and also investment loans

  2. Changing the criteria for calculating serviceability for borrowers when making applications for any new lending.

  3. Narrowing the type of lending that they are prepared to consider.

How does this affect you?

  1. If you currently have any loans that are Interest only or deemed investment loans your rates will have gone up. Compare your last few statements. Banks should advise you on your statements when rates change.

  2. If you are looking at a new purchase do not assume that based on the income you declared last time, that it will afford you the same level of borrowing capacity.

  3. If your interest only loans are coming to an end be prepared to pay principle and interest, even on investment loans.

So now what? You have some options.

  1. Speak to your bank about switching to Principle and Interest loans for a lower rate.

  2. Have a look at fixed rates. The banks usually have a headline rate that may lower you current rates for a short time.

  3. Pour yourself a stiff drink before you see what rates your loans have risen to.

  4. Call your broker.

Have a great day

Five ways how not to follow your dreams

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If success were easy, we’d all be millionaires.

It’s one thing to have an idea for an enterprise, but making it happen is a very difficult thing and it demands extraordinary energy, self-belief and determination, the courage to risk family and home, and a 24/7 commitment that borders on the obsessive.

Understanding how people achieve their dreams.

When we think about the dreams we have, and the mark we want to leave in the universe, it is striking to see how big of an overlap there is between the dreams that we have and projects that never happen

So, here are five ways how not to follow your dreams.

One: Believe in overnight success.

Two: Believe someone else has all the answers and will make the decisions for you

Three: Decide to stop when growth is guaranteed. So when your life and business is going great, you have put together a great team, and you have growing revenue, and everything is set — time to stop.

Four: Believe the fault is someone else’s.

Five: That the only things that matter are the dreams themselves.