Did you know?
First home buyers can now save their deposit even faster after the First Home Super Saver Scheme savings threshold was increased from $30,000 to $50,000.
The scheme lets first home buyers salary-sacrifice pre-tax income into a dedicated account within their superannuation fund – up to $15,000 per year and now up to $50,000 in total.
There are two ways in which the First Home Super Saver Scheme benefits first home buyers.
First, the money they deposit into the scheme is taxed at 15% rather than the income tax rate, which is 19% for someone earning up to $45,000 and 32.5% for up to $120,000.
Second, when first home buyers eventually withdraw their money, they’re allowed to withdraw their original deposit plus about 4.7% interest, which is a higher rate of interest than they’d earn through a regular savings account. Withdrawals are generally taxed at the marginal tax rate minus 30 percentage points.
Be Aware!
The Reserve Bank has said it will increase the cash rate at some point. When that happens, banks will almost certainly raise their mortgage rates. So what can you do to prepare?
Here are five tips:
- Calculate by how much your repayments would increase if your home loan rose by anywhere from 0.25 percentage points to 1.50 percentage points in the years ahead
- Get ahead on your mortgage now, so less of your loan needs to be repaid if and when those rate rises occur
- Increase your saving rate, so you’re covered if your monthly repayments increase
- Contact your lender today to ask for a rate cut – if you threaten to switch to another lender, there’s a good chance your lender will agree to your request
- Think about refinancing from a variable-rate loan to a fixed-rate loan
Give me a call if you want to discuss how a rate rise might affect your individual situation.
Dream Catchers Lending is an MFAA-accredited member. We can assist with finding the right type of finance for you. Feel free to book an obligation-free virtual appointment or leave us your details.
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