Big 4 extends freeze on foreclosures until 2022
A major bank has announced that it is extending the freeze on foreclosures it first announced in November 2020, until...
“There’s more to calculating how much you can afford than just looking at current interest rates,” director Claire Noone said.
The warning coincides with a report by the Reserve Bank of Australia which said the low interest rate environment was prompting people to take more risks with their investment strategies.
“While increased financial risk-taking is an expected outcome of lower interest rates, it is important that households understand, and appropriately account for, the financial risks they take,” the Reserve Bank’s Financial Stability Review 2013 said.
Dr Noone urged property buyers to consider what they could afford in the long-term.
“Carefully assess your financial situation and desired standard of living, including any likely future changes, such as starting a family and interest rate rises,” she said.
Buyers should also factor in costs such as conveyancing fees, loan establishment fees, stamp duty, GST and building inspection fees, she said.
“Using online tools such as loan simulators and getting independent financial advice could help avoid any nasty surprises,” she said.