Interest rates?

[wazza1234]

In Drayton maybe... The last time I looked decent houses in "the womb" were well over the $300K mark!

Ummmm....do a search on realestate.com.au for houses in toowoomba for between 200 and 250k....20 pages...there has to be something desant. And besides, if house prices are over 300k then that makes my point even stronger.

[gizmo]

Not knowing anything about negitive gearing but a Hospital Engineer around here told me he bought a house in Toowoomba for his (3) kids to live in while doing Uni & I think they pay minimal rent & he has to make up the difference, but because he makes a loss on his investment?
He gets a tax break which compensates for the money he has to put in, so in the end he still comes out in front somehow?

Don't know about that side of it, but he assured me it works & with (3) kids@Uni to support plus a rental of sorts & him & his wife in there own house to still pay off & he's not completely broke it must do....

Means & ways of doing stuff I guess, maybe need good accountant & a chem lab under the house......

[varden]

Seyney wrote: If you look at your rates you will notice it has estimated property worth.

Yup it was kinda a retorical question, Tanya pays more for her rates cos Logan CC is brisbane CC's bitch and the extra that Tanya pays is pretty much so Logan City council has some money after they pay brisbane for everything.

It still sucks for Tan tho.

I'm paying $350 a quarter...and no f*#king body corp taking my money telling me what i can and can't do. Thats the councils right

So your bedroom gets pretty hot in the afternoon hey Tanya? Got an access panel to your ceiling space?? If you do, fill your ceiling with insulation batts, you could get really carried away and put it in your walls too, but that will mean tearing down the gyproc and redoing it once insulation is installed....With just the ceiling done you won't NEED and airconditioner and lets face it they are an on going consumer cost, where as insualtion is a one off cost. In fact the batts to do your bedroom would be much less than the cost of one lousy window mount 700wt airconditioner.

I did my houses entire ceiling save for one room 3 years ago and it cost me $260 for 13 bags, i fell short by 3 bags and haven't been bothered to do the last room and its an oven in there compared to the rest of the house....no aircon here yet, but my soft missus needs to sleep for 12 hours during the summer days while shes on night shift so I'll have to get one eventually.

wazza 1234 wrote: In Toowoomba if I were to buy a house I would be looking at around $250k for something desant. Say I had a loan for 250k over a period of 25 years it would cost me around $370 a week in repayments at the current interest rates. Now I rent a house thats worth around 250-300k and I pay $210/week, I dont have to worry about rates, excess water, maintainence etc. I pay rent and thats it.

If I was to continue renting for the 25 years the loan would be for had I bought but paid $100 per week into a high interest savings account (eg ING direct) at say 5% interest over the 25 years I would have saved about $240k, not had the stress of having to make home repayments and had loads of freedom to move house if I wanted to...and who said renting doesn't make sense.

Mate that is a seriously short sighted view you have.

Rents go UP over time while your mortgage will go down in relative terms over time, sure you could save $240k in your bank in 25 years but if you actually own property it will have AT LEAST doubled in value anyway by then and it would be ALL YOURS!!! Historically properties in metropolitan areas double in value every 12 years, but its not a linear cycle.

If you make minimum payments on your homeloan the cost of rent will sooner or later out strip what your paying all up for ownership of a property.

So you rent and you keep paying the increasing rent, but its cool cos your saving at 5% p/a, with inflation running at what 3% p/a your only making a real return of 2%p/a on your money so in 25 years time your $240 won't buy you jack, certainly not a house to retire in...so you keep paying rent on your pension till you die...better get used to the taste of pet food.

Four or five years ago an entry level home in my neighbourhood was about $150k and i could have rented one out for $180 p/w. The ownership cost of said home was about $250p/w. But that was cool i was tired of keeping landlords happy. Now i could expect to pay $300 p/w rent for the house i brought, covering my costs and making me money in just over 4 short years.

If i was still renting i would be KICKING myself.

Owning is a shit prospect compared to renting RIGHT NOW but generally paying rent is not a smart long term strategy.

The sooner you get into the property market at an ENTRY level the better off you'll be in years to come.

*end rant*

[esie]

Our rates are due as well $413.50 if I pay before the 8th May, $428.52 if I pay afterwards, for a house at Mt Gravatt.

Is that per quarter Esie?
Cheers,
Pete

Yup, quarterly.

[Colette]

oh and mina,

i hope you're applying a reference rate to your loan so that your repayments increase gradually, or you're gonna get one hell of a shock when you come out of your fixed period.

How does that work Vince?

[Stereo]

oh and mina,

i hope you're applying a reference rate to your loan so that your repayments increase gradually, or you're gonna get one hell of a shock when you come out of your fixed period.

How does that work Vince?

I think vince means that if your fixed rate is say.... 6% and when you come out it might be 7.5% it would be a massive shock.... because your repayments will suddenly shoot up.... but I am a mortgage dummie....

Why dont you get Aussie John homeloans to come and see you... its a free service and they can tell you if you should be doing something better.... We spoke to one of their agents the other day and she was really fabulous.... (I can give you her details if you like...)

[diesel]

a reference rate is hard to explain.
say your standard rate 6.5% and you apply a reference rate of 7%,
each year your repayments will increase by .5%. but your interest rate will stay the same.

You would do this for two reasons, 1 with a lot of fixed loans you can't pay too much more than the scheduled repaymenyts, but if your repayments increase due to the reference rate, you can pay it off quicker but still have the advantage of having a low fixed rate (recently many fixed rates were actually lower than variable rates).
the second reason is if rates spike in the 3 years that you've fixed your rate, whether you choose to go variable or into another fixed period, repayments are gonna be a lot higher and it can be hard to deal with the change.

i hope that makes sense.
it's not very popular anymore cos most loans give you the flexibility to pay more if you want without penalty.
and a reference rate can be applied to a variable rate as well. but a reference rate never changes.

[diesel]

gizmo,
if the income earned by an asset (rent) is less than the cost of that asset (interest) then this is negative gearing. positive gearing is the reverse. any cost incurred in owning an asset that is negatively geared (interest) can be claimed as a tax deduction. i.e. if you pay $15000 in interst, you earn $40,000 from your normal job and you earn $10,000 in rent, your taxable income would be $35,000. Thats $5,000 tax free dollars you get to play with. (but only $1,500 of that is yours that would usually go to the tax man.

Now here's were it gets really good.
Me and you decide to buy a house each, but i buy the one you want and you buy the one i want. I rent your house for $100 per week and you rent mine forr $100 per week. the income we earn is only gonna be $5,000 (in round figures) each for the year but the interest expense will be roughly $15,000 for the year, hence maximising the difference in expense and revenue of the asset, leaving us paying tax on $10,000 less than we would on our normal income of say $40,000. so we only pay $9000 in tax instead of $12,000. That's 3 grand back in our pockets!

[mrmina]

excellent explaination vince.

does anybody know when the national budget is on. Or when they will announce the CPI

[Smitty]

my 2 loans are fixed...and my overdraft is linked to one of those
and they are fixed until 2008...so atm i am pretty happy

and Vince
sum good explanation stuff there..de-mystifying some of this crap

[javaman]

The disadvantage of buying is that i pay rates, $400 a quarter, body corporate $470 a quarter, and then mortgage on top of that

When i got kicked out I had two choices buy or rent, and i figured that buying would be more sensible and i could do what i want with the place.
So wrong, i could only afford a unit and the body corp virtually let me do nothing (i can't even a/c upstairs )

I like the unit, have crappy neighbors, and have lots of bills..

I would have been easily able to afford to rent a house for what the unit costs me

That was initially what I thought before I realise that:

1. Rent cost will go up, while repayment on the house will go down

2. If I have cash on the bank it will become a ZX10R instead of investment

3. Owning a house is simply nice hell I can even paint the whole house kwaka green if I wanted to, spill oil on the driveway, rev the viper pipe etc.

p.s. that's a damn expensive body corp. but I think you got a swimming pool ?

[SenNey]

City of Casey: Rates for our house $932 a year.

Oh plus bins, 2 of which i don't use yet still have to pay for. And no you can't say i don't want them.

[diesel]

and Vince
sum good explanation stuff there..de-mystifying some of this crap

i'm here to help.

and u'd wanna hope i picked something up over the past 2 years of banker stardom.

[ZX10R King]

4.5 years ago, I bought a 1 bedroom unit for $80000...Mortgage was $64000.....

Unit now valued between $170000 -$185000....Unfortunately due to an expensive ex g/f, my mortgage now is $137000..Partially my fault, but my ex was stoopid and greedy, ......

[Felix]

4.5 years ago, I bought a 1 bedroom unit f...Mortgage was $64000.........Unfortunately due to an expensive ex g/f, my mortgage now is $137000.

I see that a lot...it is so easy to just keep buying stuff and throwing it into the home loan...and to a fairly large degree the banks encourage and facilitate it. Once you've paid off your loan, they aren't making any more money out of you, so they discourage it, and make it "easy" for you to add a new car, etc. All they are really doing is managing their risk more productively for themselves.

We have some friends in pretty much the same situation - but worse. Absolutely everything in their house is under finance of some kind. They buy stuff on interest free from Hardly Normal, then when it comes due, and they don't have any money, they wack it into the mortgage...

Oh, well, they're happy enough...