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How to cut your mortgage costs...now · The Money Puzzle

0:10
Speaker 1: Hello and welcome to the Australian's Money Pozzitle podcast. I'm
0:13
Speaker 1: James Kirkby. Welcome aboard everybody. I'm guessing it's a very
0:17
Speaker 1: good chance you have a mortgage at home or possibly
0:21
Speaker 1: a mortgage on an investment property. You know that one
0:23
Speaker 1: hundred thousand people refinanced their mortgages in the first quarter
0:29
Speaker 1: of this year. That's more than one hundred a day,
0:31
Speaker 1: and across rates are dropping, so it really is an opportunity,
0:34
Speaker 1: so to take up that opportunity. My guest today is
0:37
Speaker 1: Christian Stevens. He is a mortgage broker at the Flint Group.
0:41
Speaker 1: He is the winner of the Mortgage Broker of the
0:43
Speaker 1: Year three times. How are you Christian?
0:46
Speaker 2: Good? You heard me, James.
0:48
Speaker 1: Nice to have you on the show. They're big numbers.
0:51
Speaker 1: Do people refinance more when rates are dropping? Is that
0:54
Speaker 1: generally how it goes? Interesting questions? So it's a two
1:00
Speaker 1: answer there.
1:01
Speaker 3: Definitely, when rates are in a cutting cycle, you'll find
1:06
Speaker 3: lenders will pass.
1:08
Speaker 2: All or pour a portion of the loan on.
1:11
Speaker 3: What that means there's a bit of a discrepancy between
1:13
Speaker 3: what lenders are providing. We're definitely seeing that after the
1:16
Speaker 3: third rate cut that there's about a twenty twenty five
1:19
Speaker 3: basis point difference between lenders depending on your needs an objective.
1:23
Speaker 3: So there's been a probably forty percent increase in the
1:28
Speaker 3: amount of clients looking to refinance this time last year.
1:33
Speaker 3: I actually went through my entire backbook of clients and
1:35
Speaker 3: repriced all of them and found that ninety percent of
1:40
Speaker 3: them were already on probably the most competitive rate that
1:43
Speaker 3: they could get, with lenders aggressively repricing in the retention
1:47
Speaker 3: teams trying to keep those clients. Now, though definitely seeing
1:52
Speaker 3: an opportunity for clients to refinance, which probably goes off
1:55
Speaker 3: the back of what your comment was before. There's definitely
1:58
Speaker 3: an increase of clients financing, reaching out about refinancing, di consolidating,
2:02
Speaker 3: accessing equity.
2:04
Speaker 2: But yet there's a lot of moving in the market
2:05
Speaker 2: at the moment.
2:08
Speaker 1: You see people will see that rates are coming down,
2:10
Speaker 1: but they won't necessarily move immediately.
2:13
Speaker 4: But of course we've had two cuts.
2:14
Speaker 1: Now and there is it would seem at least one
2:17
Speaker 1: more to come. There's two sort of areas that want
2:20
Speaker 1: I told you about.
2:20
Speaker 4: One is trying to get.
2:21
Speaker 1: Your mortgage reduced from your existing financial institution without going
2:26
Speaker 1: through the whole thing of moving, and then the second
2:28
Speaker 1: part obviously is moving.
2:29
Speaker 4: But tell me, in terms of getting.
2:31
Speaker 1: A mortgage rate lowered by the bank you've been dealing
2:35
Speaker 1: with beyond the power cuts that are coming through that
2:39
Speaker 1: is that the links with the RBA is that feasible?
2:41
Speaker 1: Is that our banks, when you say they have it's
2:43
Speaker 1: nice to know, right, they have retention teams. To these
2:45
Speaker 1: retention teams, if I was to call them and say
2:47
Speaker 1: I'm just unhappy and they say, well, that's the rate,
2:50
Speaker 1: and I say, well, I'm just unhappy with it, and
2:51
Speaker 1: I feel like leaving, how would I improve that negotiation?
2:54
Speaker 1: That have probably haven't sounded very good there and I
2:56
Speaker 1: probably wouldn't sound good to the bank.
2:58
Speaker 4: You're the pro tell us what to do.
3:03
Speaker 3: There's a bit of a process, James. So each bank
3:06
Speaker 3: has a def a different way that they will try
3:10
Speaker 3: and retain clients. Some will offer your best rate immediately upfront.
3:14
Speaker 3: Some you've got to go through a bit of a
3:15
Speaker 3: journey to get that rate. So your broker, given that
3:19
Speaker 3: you know eighty percent of loans are written through brokers,
3:21
Speaker 3: most of your listeners would probably have got their loan
3:24
Speaker 3: through a broken So what they should do is reach
3:25
Speaker 3: out to the ask them to reprice their loan. And
3:28
Speaker 3: there's a bit of a process there. So what they
3:30
Speaker 3: will do is get your existing statement, look at your
3:33
Speaker 3: loan to e ratios has the value with the property
3:35
Speaker 3: as opposed to how much debt you have, and go
3:38
Speaker 3: back to the bank and do a pricing. That pricing
3:40
Speaker 3: would normally, you know, come back relatively competitive.
3:43
Speaker 2: They've got an option to escalate that pricing again. But
3:46
Speaker 2: where you're going to see the biggest value is if
3:48
Speaker 2: you do a bit of comparison.
3:49
Speaker 3: So if that broker go say if you're with you know,
3:52
Speaker 3: aim Z, the broker will go and see what NAB
3:56
Speaker 3: and CBA and Quarry and Westpac are offering, and then
4:00
Speaker 3: go back to that lender and say, hey, I know
4:03
Speaker 3: that you offered us five point seven, but all the
4:06
Speaker 3: other banks are offering five point six? Can we please
4:08
Speaker 3: match that? And that's where you can normally get that
4:10
Speaker 3: little bit extra. What I was saying before is retention
4:13
Speaker 3: teams are aggressively trying to keep clients. If you ask
4:17
Speaker 3: me the same question years ago, and they couldn't really
4:19
Speaker 3: care too much because there was so much business going around.
4:21
Speaker 3: But these days the retention teams are actually quite competitive.
4:26
Speaker 3: We're not seeing huge discrepancy between new tubank clients and
4:30
Speaker 3: existing clients. Yes, there's always a bit of a difference
4:32
Speaker 3: there called multi tax. You're always going to get a
4:34
Speaker 3: better deal going to a new bank, but at the
4:37
Speaker 3: same time, a relatively sharp rate with the lender you've
4:42
Speaker 3: currently got, as long as you're broker is proactive and
4:44
Speaker 3: getting on the front foot down and repricing that moment.
4:47
Speaker 1: What I read was when people of the one hundred
4:49
Speaker 1: or so a day that refinanced one hundred thousand that
4:52
Speaker 1: did so in the first quarter of the year, they
4:55
Speaker 1: saved on average something close they said zero point eight percent.
4:59
Speaker 1: So coming up on one and so people went in
5:00
Speaker 1: the door, they may have had a rated six, and
5:03
Speaker 1: they came out the door with the rate of five
5:04
Speaker 1: points something. Is that that people should be looking for.
5:07
Speaker 1: Is that a feasible target to take it down by
5:10
Speaker 1: one of its six, it's five, its five, it's four.
5:13
Speaker 2: That's quite a lot.
5:16
Speaker 3: I think if you're getting more than point two or
5:19
Speaker 3: point three off your loan, it's feasible because there's about.
5:21
Speaker 2: Eight hundred dollars to one thousand dollars depending on lender in.
5:24
Speaker 3: Exit costs and new costs associated with changing banks, and
5:27
Speaker 3: also obviously time an effort. But anything less than that,
5:32
Speaker 3: it doesn't really make a lot of sense to refinance any.
5:34
Speaker 2: More than that, then, yes, definitely you can save.
5:37
Speaker 3: I think Money magazine brought out a refinanced table or
5:41
Speaker 3: a thousand clients that they that they looked into, and
5:43
Speaker 3: I think the average saving was I think between seven
5:46
Speaker 3: and nine thousand dollars for owly occupied or refinances annually
5:49
Speaker 3: per property. So there's definitely some good deals to be
5:52
Speaker 3: had now, which is why we're seeing such a big
5:55
Speaker 3: increasing clients look good to refinance.
5:58
Speaker 4: Right.
5:58
Speaker 1: Okay, but before we talk about when you're prepared to
6:01
Speaker 1: move banks, one other thing I want to ask you
6:03
Speaker 1: is when you guys go in to renegotiate with the
6:05
Speaker 1: bank and you know the language of the banks, which
6:07
Speaker 1: I think is what's so important that most investors just
6:10
Speaker 1: don't have either. Otherwise you can shave my costs of
6:14
Speaker 1: my mortgage down Apart from the negotiation on the rate itself.
6:18
Speaker 2: Well not really.
6:19
Speaker 3: Some banks might waive at your fees and stuff like that,
6:23
Speaker 3: but normally in those negotiations are made upfront. Outside of
6:29
Speaker 3: that I think a better question we see a lot
6:32
Speaker 3: of investors coming to us, is you know, interestrated to
6:35
Speaker 3: bioproduct definding a lender that suits their needs and objectives.
6:38
Speaker 2: Especially when you comes to investment debt.
6:40
Speaker 3: How how a bank will assess your existing debt versus
6:45
Speaker 3: new debt will determine how much you can borrow. A
6:47
Speaker 3: lot of second tier lenders assess existing debt at a
6:50
Speaker 3: much lower assessment rate, which means you can borrow a
6:53
Speaker 3: lot more. So we're definitely saying, look, I guess j
6:57
Speaker 3: if you ask me what my lender stack look like
7:01
Speaker 3: when I started breaking ten years ago to now.
7:03
Speaker 2: It's much more diversified.
7:05
Speaker 3: Let people aren't, as you know, don't care as much
7:08
Speaker 3: around going to just the big banks. We're seeing a
7:10
Speaker 3: huge increase in second tier and non bank lending options
7:15
Speaker 3: that loyal.
7:16
Speaker 4: They are all guaranteed bank. If it's a if it's a.
7:18
Speaker 3: Yeah, yeah, they're all safe, they're all the same, they're
7:21
Speaker 3: all with the same banking and what they're obviously you
7:23
Speaker 3: know a bit of convenience about having a bigger bank
7:26
Speaker 3: and whatnot. But a person I can't remember last time
7:28
Speaker 3: I went to the branch. Maybe I lost my debit card,
7:30
Speaker 3: but it's not as common these days, which is why
7:33
Speaker 3: you're seeing all these brands closing and everyone moving online.
7:35
Speaker 1: And the investors or the mortgage shoulders form mortgage sholders,
7:40
Speaker 1: they too are much more winning.
7:41
Speaker 4: Are they to rule outside the Big four?
7:44
Speaker 3: Definitely, because I think when you're an investor, the opportunity
7:47
Speaker 3: cost loss is far bigger than an interest rate change.
7:49
Speaker 3: And what I mean by that is, if you're able
7:51
Speaker 3: to get to the market sooner, ride that wave up
7:53
Speaker 3: from a capital growth perspective, and you're paying an extra
7:56
Speaker 3: twenty basis points, it's a drop in the ocean compared
7:59
Speaker 3: to the amount of money you'd made on on knowing
8:00
Speaker 3: that property. So I think investors especially are much more
8:04
Speaker 3: open to the structure of a loan and the strategy
8:08
Speaker 3: longed as opposed to the interest rate. Obviously, you want
8:10
Speaker 3: the laws interest rate, but that is always a byproduct
8:13
Speaker 3: defining a lender that since your needs and objectives, rather
8:15
Speaker 3: than finding a lender that is offering a hook rate
8:18
Speaker 3: or a honeymoon rate or something attractive upfront, but maybe
8:21
Speaker 3: in the back end, their assessment rates are much higher
8:23
Speaker 3: or their policies are much stricter, meaning you can't borrow
8:25
Speaker 3: anywhere near what you'd like.
8:27
Speaker 4: Oh, yes, I see. Now tell me. So let's say,
8:30
Speaker 4: am I in a more powerful position?
8:31
Speaker 1: Then when I go into the bank and I say
8:34
Speaker 1: I'm what I'm immediately saying, I want to I'm looking around,
8:37
Speaker 1: I'm prepared to leave you bank banker to go somewhere ast.
8:41
Speaker 1: Am I immediately in a more powerful position? Then if
8:43
Speaker 1: I'm serious about that?
8:45
Speaker 2: Look, I think there's ways of being serious.
8:47
Speaker 3: If if the broker has done their research and is
8:50
Speaker 3: going back to the bank with competitor analysis around what
8:53
Speaker 3: else is available to their clients, that tells me that
8:56
Speaker 3: they're serious and they're genuinely looking at other options.
8:59
Speaker 1: If you're just saying, look, that's not far from you
9:01
Speaker 1: can see, I'm a really bad negotiator.
9:03
Speaker 3: I need you, which is which is why I've got
9:05
Speaker 3: retention teams, right, So you know at some point you're
9:08
Speaker 3: going to end up in that retention team, and then
9:09
Speaker 3: that's their job to kind of retain you off the
9:12
Speaker 3: back of understanding how seriously while that you believe.
9:15
Speaker 4: What scares them, what makes them worry? Oh, this is
9:18
Speaker 4: going to go.
9:21
Speaker 3: I guess I know where this question is probably going
9:23
Speaker 3: is would you put a discharge in to kind of.
9:27
Speaker 2: Make them feel like you're going to leave.
9:29
Speaker 3: Definitely, putting a discharge in you're going to get a
9:31
Speaker 3: caught from someone at the bank.
9:33
Speaker 2: There are certainly.
9:35
Speaker 3: Lenders who would look at a discharge requests more seriously
9:38
Speaker 3: than others, but each bank has a very different process
9:41
Speaker 3: of how that they go through that discharge process.
9:44
Speaker 1: So one of our regular guests, Weams, believes they're very
9:47
Speaker 1: powerful that if you request a discharge authority get action.
9:50
Speaker 4: Is he on the money?
9:53
Speaker 3: Look, there's definitely lenders that would see that, but normally
9:57
Speaker 3: from the hundreds and hundreds of reprices we would do
9:59
Speaker 3: a week, rarely not able to get the same results
10:03
Speaker 3: as long as you structure it and present it properly. Today,
10:05
Speaker 3: if I didn't do the work up front right then yes,
10:07
Speaker 3: it would same results.
10:08
Speaker 2: But also there's a time cost.
10:10
Speaker 3: Their James in going and filling out his charge and
10:12
Speaker 3: going to that effort where you could just do it
10:13
Speaker 3: up front with your broker anyway.
10:15
Speaker 1: Okay, so this is a power of information, very interesting.
10:18
Speaker 1: All right, we'll come back in a moment, folks. I
10:20
Speaker 1: want Christian to tell us about the something of the
10:22
Speaker 1: myth shall we say, around the best rates, the advertised
10:26
Speaker 1: rate on the window is not always the cheapest. That's
10:28
Speaker 1: what'th thinking about. Back in a moment. Hello, Welcome back
10:41
Speaker 1: to The Australian's Money Puzzle podcast. I'm James Kirby talking
10:44
Speaker 1: to Christian Stevens the first time on the show. We
10:47
Speaker 1: do have been in communication. Of course, Christian I quite
10:50
Speaker 1: a bit in the work I do, but we haven't
10:52
Speaker 1: had him on the show before.
10:53
Speaker 4: Nice to have him on. He is a top mortgage.
10:56
Speaker 1: Broker and he is going to tell us in this
10:59
Speaker 1: segment about why the lowest advertise rate isn't always the cheapest.
11:04
Speaker 1: I would have thought I would go on to my
11:06
Speaker 1: comparison site, I would see the lowest raets and I
11:08
Speaker 1: would really hang onto that pretty tightly. Yeah, what am
11:11
Speaker 1: I missing?
11:11
Speaker 2: Interest rate?
11:12
Speaker 3: The byproduct of finding a lender suits your needs and objectives.
11:16
Speaker 3: Often if you go on like Comparisonite, like Finder or equivalent,
11:21
Speaker 3: definitely see some lenders there offering ridiculously low interest rates.
11:25
Speaker 3: But what you don't see is in the background there
11:28
Speaker 3: the way that they assess your debt.
11:30
Speaker 2: So often the lowest interest.
11:32
Speaker 3: Rates or those lenders non bank lenders that are offering
11:35
Speaker 3: rates that look almost too good to be true.
11:37
Speaker 2: Their policies are.
11:38
Speaker 3: Very restrictive, so they only want very low, low intervalue
11:41
Speaker 3: ratio deals that are very which exactly is in a
11:46
Speaker 3: large portion of the population, right so, and also the
11:49
Speaker 3: other way they assess your debt will be a lot strictest,
11:51
Speaker 3: so nowhere near as much as you'd like. And there's
11:54
Speaker 3: definitely a segment of the market that would suit. But
11:57
Speaker 3: for most people, especially proper developers investor sorry, who are
12:00
Speaker 3: looking to grow a portfolio that is going to be restrictive.
12:04
Speaker 3: Do you actually being able to achieve that? And you
12:07
Speaker 3: can still get very sharp, very competitive interest rates by
12:10
Speaker 3: going to dozens and dozens of first, second, and thirty
12:14
Speaker 3: lenders that offer rates that are pretty sharp and still
12:17
Speaker 3: get you the result that you need on the back
12:18
Speaker 3: end as well.
12:19
Speaker 1: So we were talking in the first segment about that
12:21
Speaker 1: there might be ways beyond just the rate that you
12:25
Speaker 1: can get a better deal than the headline rate. And
12:27
Speaker 1: the headline rate, as you say, you've used the phrase
12:29
Speaker 1: more than once already on the show. They think that
12:31
Speaker 1: it's the byproduct as such, So tell me you say
12:36
Speaker 1: brokes can save investors money beyond the headline rates. Where
12:40
Speaker 1: are those areas that you can sive? That's what I'm
12:42
Speaker 1: interested in. Are there fees hidden costs?
12:46
Speaker 2: I think it's a bigger question, James. So when you
12:48
Speaker 2: want to think of a property investor, it's more around
12:51
Speaker 2: how do you structure a deal? How do you get
12:53
Speaker 2: me from A to B.
12:54
Speaker 3: As quick as possible, chieap as possible. And that definitely
12:58
Speaker 3: comes down to structuring debt. That comes down to interest
13:03
Speaker 3: only terms as opposed to principal interests, utilizing of office accounts.
13:08
Speaker 3: But it's more around how do you borrow efficiently?
13:12
Speaker 2: You know, there's ways, not gainer systems.
13:15
Speaker 3: Probably the wrong words to use, but lenders have different
13:19
Speaker 3: ways and they access assess sorry your existing debt versus
13:23
Speaker 3: your new debt. So say you know one of the
13:26
Speaker 3: bigger banks, they will assess your existing debt at three
13:28
Speaker 3: percent and your new debt at three percent. Some of
13:31
Speaker 3: the second and thirty lenders will assess your existing debt
13:35
Speaker 3: at one percent or one a half percent, which means
13:36
Speaker 3: you can borrow a lot more on the front. So
13:40
Speaker 3: under you're broker having deep understanding of how assessment rates work,
13:44
Speaker 3: what policies different lenders are providing, will allow you to
13:49
Speaker 3: grow a property portfolio a lot faster and more efficiently.
13:53
Speaker 3: And I think as a property investor, being able to
13:55
Speaker 3: capitalize quickly on opportunities is really important.
13:58
Speaker 1: So there's considerable veryation is there on these assessment rates
14:02
Speaker 1: and there yeah, because they only have to report to
14:04
Speaker 1: Apple their averages.
14:05
Speaker 5: Is that it same clients, same income, same deal, and
14:07
Speaker 5: we're talking about one hundred of thousands, is what millions
14:09
Speaker 5: of dollars difference in borrowing capacity depending on their levels,
14:11
Speaker 5: But definitely the two biggest movers of borrowing capacities your
14:17
Speaker 5: non based income, so the way that a bank will
14:19
Speaker 5: assess you know, over time or bonuses or shares, and
14:23
Speaker 5: your existence as well, so.
14:25
Speaker 2: You can get a massive discrepancy between.
14:27
Speaker 3: Lenders and a good broker enables you to capitalize us
14:31
Speaker 3: that on those opportunities and kind of show you how
14:33
Speaker 3: to work your way through all the different lender policy
14:35
Speaker 3: because if we're talking about one hundred lenders thousands of
14:38
Speaker 3: different policies, it's a mindfiit, right, there's a lot of
14:40
Speaker 3: information there.
14:41
Speaker 1: And you say about the non base income, it's interesting
14:44
Speaker 1: we've had over the year's lots of complaints from listeners
14:47
Speaker 1: about that. The older investors often who don't have a salary,
14:51
Speaker 1: can hit a real brick wall in trying to get mortgage,
14:54
Speaker 1: even if they're considerable wealth and income.
14:57
Speaker 3: Definitely not having if you're only income is coming from
15:00
Speaker 3: rental income. Yes, it's hard, right because the way the
15:03
Speaker 3: bank says that if that intenant you can't find a
15:05
Speaker 3: tenant or something happens, there's no real buffer there.
15:08
Speaker 2: So cliss I that it comes down to what's called
15:10
Speaker 2: an exit strategy James.
15:11
Speaker 3: So as long as they've got you know, a low
15:12
Speaker 3: loan to value ratio, a lot of money in a
15:14
Speaker 3: super maybe some diversification and other assets, and you can
15:17
Speaker 3: prove to the bank that look worst case scenario as
15:20
Speaker 3: a four back strategy. Here you can normally get around
15:23
Speaker 3: issues like that, but yeah, it definitely gets harder for
15:26
Speaker 3: professional investors who own the income is rental income because
15:29
Speaker 3: they don't have a fall back there, or they.
15:30
Speaker 1: Just have investment income. And how do you get just briefly, like,
15:33
Speaker 1: how do you get around that? The person says, well,
15:35
Speaker 1: you know, my forum says you must have a salary.
15:37
Speaker 1: You don't have a salary, and you say, yes, but
15:39
Speaker 1: I'm earning quite a big income per animate just isn't
15:43
Speaker 1: a suny is that?
15:44
Speaker 4: How do you get around that?
15:48
Speaker 2: I would do a couple of things.
15:49
Speaker 3: One is you look at your super balances and other
15:51
Speaker 3: assets to see what that will look like in terms
15:53
Speaker 3: of a.
15:53
Speaker 2: Timeframe of someone's life.
15:54
Speaker 3: If they're at sixty or fifty five years old, you know,
15:56
Speaker 3: what does their retirement agy will look like?
15:57
Speaker 2: And then when are they going to start drawing a pension?
15:59
Speaker 3: And what to sell down straight And they might have
16:01
Speaker 3: you know, one, two, three, four, five, ten investment properties.
16:04
Speaker 3: I would presume that retirement would mean that they'd sell
16:07
Speaker 3: a couple of those properties. So what you do is
16:09
Speaker 3: a good broker, is you put together a one page
16:12
Speaker 3: a strategy around what that exit, what that downsize is
16:15
Speaker 3: actually going to look like, and as long as it
16:17
Speaker 3: all makes sense. At the end of the day, banks
16:19
Speaker 3: buses and they're more than happy to learn money, but
16:22
Speaker 3: they also don't want to lend money to someone who
16:24
Speaker 3: they think there's going to be an issue.
16:26
Speaker 2: But you can normally get around them.
16:27
Speaker 1: So there will they will they will think, yeah, beyond
16:31
Speaker 1: the district.
16:32
Speaker 3: And there's also you know, there's also some lenders that
16:34
Speaker 3: look at you know, older clients more favorably.
16:37
Speaker 2: There's a year interest only loans and some unique niche
16:41
Speaker 2: products that have come to market recently.
16:43
Speaker 3: Because you look at the population, right, James, it's pretty aging,
16:47
Speaker 3: and you know there needs to be an understanding that
16:51
Speaker 3: there are going to be products that are going to
16:52
Speaker 3: suit different segments of the market and rational investors over there.
16:56
Speaker 3: To fifty five is definitely one of them.
17:00
Speaker 4: Right.
17:00
Speaker 1: Okay, just one last thing on that before we go
17:02
Speaker 1: to questions. Did you I am varying from what you
17:06
Speaker 1: say that the bank's actually the interest only was something
17:11
Speaker 1: that they were willing to give older investors over younger ones.
17:16
Speaker 2: It's not favorable in terms of age.
17:18
Speaker 3: What I'm saying is that there's definitely been an increase
17:21
Speaker 3: in interest only products coming to market for professional investors.
17:25
Speaker 2: Okay, there without a doubt.
17:27
Speaker 3: Right, So because you know you typically had the two,
17:29
Speaker 3: ye three, four, five year interest only facilities and then
17:32
Speaker 3: having to refinance five years, it doesn't make a lot
17:34
Speaker 3: of sense for.
17:37
Speaker 2: Isn't There's some products out there that have extended interest
17:40
Speaker 2: only terms for this exact scenario.
17:42
Speaker 1: So they're bringing in ones now that have decade long
17:44
Speaker 1: interest only and you know that before you start.
17:47
Speaker 4: Yeah, okay, very interesting. All right, look, well take a
17:49
Speaker 4: short break books.
17:50
Speaker 1: I think we really picked up a few pieces of
17:54
Speaker 1: very valuable information.
17:55
Speaker 4: There a couple of things that I might just recap.
17:57
Speaker 1: One of the negot we negotiate with your own bank,
18:01
Speaker 1: that is entirely feasible. As Christian says, keep you know,
18:05
Speaker 1: it's a matter of presenting accurate information to them of
18:08
Speaker 1: the comparisons outside. The discharge authority is always there, of
18:11
Speaker 1: course as a.
18:12
Speaker 4: Weapon as such.
18:13
Speaker 1: That is that you are you are seeking to leave
18:16
Speaker 1: the bank, and you will need a mortgage discharge authority,
18:18
Speaker 1: and that is something the attention teams. There are words
18:21
Speaker 1: they do not like to hear. Also interesting on the
18:24
Speaker 1: professional or at least the investment property side. For the
18:27
Speaker 1: property investor, there has always been a strong theory that
18:31
Speaker 1: why would you pay principal ever as an investor and
18:34
Speaker 1: you could be in interest only And the think about
18:37
Speaker 1: interest only is up to now Christian it was sort
18:39
Speaker 1: of in and out of fashion, it seems to me
18:41
Speaker 1: at the banks, depending on what was going on. But
18:44
Speaker 1: interesting to hear there is a structural long term interest
18:47
Speaker 1: only deals out there for the right investor. Okay, very good,
18:50
Speaker 1: gouts some great questions back in a moment. Hello, welcome
19:01
Speaker 1: back to The Australian's Money Puzzle podcast.
19:03
Speaker 4: I'm James Kirkby.
19:04
Speaker 1: I'm talking to Christian Stevens of the Flint Group. He
19:08
Speaker 1: is a mortgage broker.
19:09
Speaker 4: Kelly has a question you've mentioned.
19:11
Speaker 1: I kept this question for you, Christian. Kelly says you've
19:14
Speaker 1: mentioned more than once on the show. The most important
19:17
Speaker 1: words in getting a better deal on your mortgage something
19:20
Speaker 1: to do with the mortgage discharge. Can you explain it please, Yes,
19:24
Speaker 1: I can, Kelly. It probably goes back to a piece
19:27
Speaker 1: I wrote some times ago about the magic words, the
19:29
Speaker 1: magic words forgetting a mortgage, which were at the time. Christian,
19:33
Speaker 1: I am considering signing a discharge authority.
19:38
Speaker 4: So you you don't deny that it works. You're you
19:41
Speaker 4: just say, actually, you might even have to go that far,
19:43
Speaker 4: give work and do it.
19:44
Speaker 3: You can get the same outcom without doing that certain Yeah,
19:49
Speaker 3: it's an extreme response to what can definitely be done
19:51
Speaker 3: while you broke up without the need to go and
19:53
Speaker 3: go and do that. And the banks might want to say,
19:56
Speaker 3: you know, thousands of this charge requests going in because
19:58
Speaker 3: you can get the same result easily.
20:01
Speaker 1: Okay, yes, and you did actually cover that in the
20:03
Speaker 1: first segment. All right, now, Alex, I have seen many articles,
20:08
Speaker 1: says Alex, recently from less reputable publications, writing about a
20:12
Speaker 1: proposed spare bedroom tax. Could you talk about the proposal,
20:16
Speaker 1: the likelihood of it being implemented or is it just
20:19
Speaker 1: scare bongering? Okay, none of this is advice, is always information,
20:22
Speaker 1: and Alex, look, it's nothing to do with reputable or
20:26
Speaker 1: not being reputable.
20:27
Speaker 4: There is a cautality of all people.
20:30
Speaker 1: Cautality being the former Cologic group, and we often have
20:33
Speaker 1: Eliza Owens and Tim Lawless either both economists from that group,
20:37
Speaker 1: on the show, and they in their proposal to the
20:40
Speaker 1: Economic Summit, their submission had a spare bedroom taxes, an
20:44
Speaker 1: idea of basically a stick if you like to get
20:48
Speaker 1: people bring around their big family homes in the suburbs
20:51
Speaker 1: to downsize.
20:53
Speaker 4: As an idea. It all it got was all I saw.
20:56
Speaker 4: It got no support whatsoever. All I saw was critician
20:59
Speaker 4: and complained what do you think of a Christian? The No.
21:02
Speaker 2: Thirty first thing? I know Eliza and Tim well and
21:04
Speaker 2: have nothing but respect for him. But that is a
21:06
Speaker 2: that is almost impossible to police.
21:08
Speaker 3: Really, I think taxing people on having a spare bedroom
21:11
Speaker 3: when they're already paying rates and whatnot seems quite unfair. Interestingly,
21:16
Speaker 3: if I put some personal context to your question. This morning,
21:19
Speaker 3: almost morning to go for a walk with my wife,
21:22
Speaker 3: there are three properties on our walk that we go
21:24
Speaker 3: to that are empty, and they've been empty for several years.
21:29
Speaker 3: That's where I think there needs to be some action.
21:31
Speaker 3: If someone has an empty property, then you know you
21:34
Speaker 3: should be taxed high on the on that property. I
21:37
Speaker 3: think taxing people for the spare bedroom is absurd, but
21:40
Speaker 3: there should definitely be some more incentives to downsize. I
21:43
Speaker 3: think you can get threehundred thousand and or six one
21:45
Speaker 3: thousands of a couple, do you super tax free when you downsized.
21:49
Speaker 2: There's not enough incentive to downsize. That's the problem, right.
21:52
Speaker 3: And if you think of the population, thirty percent have
21:55
Speaker 3: a mortgage or thirty three percent, thirty percent rant, and
21:57
Speaker 3: thirty percent a debt free.
22:00
Speaker 2: We're going to see a huge.
22:01
Speaker 3: Transfer of wealth over the next five to ten years.
22:05
Speaker 3: There's not enough incentive to downsize, and I think there
22:08
Speaker 3: needs to be a lot more thought as to how
22:11
Speaker 3: to make that attractive for old restrains.
22:14
Speaker 2: So they want to do that. But IFITELY think tax
22:16
Speaker 2: on spare bedrooms is not the answer.
22:18
Speaker 4: No, I think it's going to get up.
22:19
Speaker 1: Shane Oliver, another regular guest on the show, Chief Economy
22:22
Speaker 1: the Day and P, said that the guiding principle of
22:26
Speaker 1: getting people to as you say, in incentivizing people to
22:30
Speaker 1: get out of their big houses, for perhaps there is
22:32
Speaker 1: spare bedrooms, our bedrooms that are not used much and downsize,
22:37
Speaker 1: is to suspend.
22:38
Speaker 4: One idea would be suspend stamp.
22:40
Speaker 1: Duty for downsizers in that area, or certainly incentives at
22:43
Speaker 1: least to get people.
22:44
Speaker 4: I don't think the stick will work.
22:46
Speaker 1: And what would you have, as you say, police, would
22:48
Speaker 1: you have someone sort of helicopter over the suburbs, you know,
22:52
Speaker 1: unmanageable and not particularly feasible. I think you're right all right,
22:56
Speaker 1: terrific and really good to have you on the show.
22:58
Speaker 1: Thank you very much, Christian on a very acute observations
23:02
Speaker 1: from someone who I had a guest if he was
23:05
Speaker 1: on the show, would be quite accurate and concise in
23:08
Speaker 1: his answers because he is a busy man. All right,
23:11
Speaker 1: Thank you very much, Christian of the Flinch group. We'll
23:13
Speaker 1: talk again for having me and keep the emails rolling.
23:17
Speaker 1: Folks the money puzzle at the Australian dot com dot au.
23:21
Speaker 4: Talk to you soon.