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Australian interest rates are currently at <a href="https://tradingeconomics.com/australia/interest-rate">historically low levels</a>. This fact, along with the <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2020-04-14/imf-forecasts-big-coronavirus-growth-hit/12147818">economic uncertainty created by the coronavirus pandemic</a>, has left many wondering whether or not now is a good time to take out (or switch to) a fixed rate home loan. Fixed rate home loans are where your loan repayments will be charged at the same interest rate, usually for periods between 1 to 5 years.

There are both pros and cons of taking out a fixed rate home loan. 

Pros:

1. Your interest rate won’t go up if market rates increase 

This means that you’ll be charged less interest than a person with a variable rate home loan, giving you the opportunity to become <a href="https://www.urban.com.au/guides/how-to-secure-a-mortgage-free-lifestyle-sooner">mortgage-free sooner.</a> 

2. It can give you repayment certainty

Your repayments won’t change if market interest rates increase. A fixed rate loan can, therefore, be a good idea if your <a href="https://www.urban.com.au/news/resetting-your-finances-during-covid-19-a-financial-coachs-guide">financial circumstances are likely to change</a>. For example, if you’re planning on starting a family or your job may be at risk due to the economic fallout of the coronavirus.

Cons:

1. Higher fees

A fixed rate home loan usually has higher fees than a variable-rate home loan.

2. Break fees

If you want to end your fixed rate home loan before the term expires, there will usually be ‘break fees’ involved. For example, a reason why you might want to end your fixed rate home loan is if you want to sell your home. Variable-rate loans, on the other hand, don’t have break fees.

3. Loan features and flexibility

Some fixed rate home loans limit your ability to make to do things such as:

<ul>
<li>making extra repayments</li>
	<li>
<a href="https://www.urban.com.au/news/the-difference-between-offset-and-redraw-mortgage-loans-that-are-right-for-you">redrawing money</a> on your home loan if you need to.</li>
</ul>
       However, variable-rate loans usually have more flexible features such as these.

Before you take out a fixed rate home loan, you should do all of the following:

1. Thoroughly research the market 

There are a huge number of home loan products and loan providers available in the Australian home loan market. If you don’t have time to research the market, you can use the services of a <a href="https://moneysmart.gov.au/home-loans/using-a-mortgage-broker">licensed mortgage broker</a>. 

In addition, if you are switching from a variable-rate home loan to a fixed-rate, it’s important that the benefits outweigh any costs. If you are unsure about this, you should obtain independent financial advice.

2. Understand the comparison interest rate

Lenders usually advertise two interest rates on their loan products: a nominal rate and a <a href="https://moneysmart.gov.au/glossary/comparison-rate">comparison rate</a>. The nominal rate is usually lower, but it doesn’t include the cost of loan fees and charges. The comparison rate, on the other hand, is higher but it does include the cost of most loan fees and charges. 

Always use the comparison rate when comparing loan products. Lenders in Australia are <a href="https://asic.gov.au/regulatory-resources/credit/credit-general-conduct-obligations/national-credit-code/">legally required to provide you with the comparison rate</a> before you take out a loan.

3. Negotiate loan fees and features

The Australian home loan market is highly competitive and lenders are always keen for new home loan business from applicants with good <a href="https://moneysmart.gov.au/managing-debt/credit-scores-and-credit-reports">credit ratings</a>. If you have a good credit history, you may be able to negotiate home loan fees and charges with lenders. 

There’s an old saying that ‘you don’t get what you deserve, you get what you negotiate’. If you don’t believe you have good negotiating skills, a mortgage broker can negotiate on your behalf.

 
It’s important to understand that paying off a home loan is a long-term financial commitment. Interest rates inevitably change over time and interest is the major cost associated with home loans. Even a small increase in interest rates can make a massive difference to the amount you’ll pay over the duration of a home loan. Hence, It is crucial that you consider the pros and cons of fixed rate home loans as well as their suitability for your current and future financial circumstances.

 
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vivian_48447

Precautions You Should Take Before You Sign up For a Fixed Rate Home Loan

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A place to call home – very much an attainable proposition according to young Australians 
Young Australians still dream of owning their own home and are actively taking steps towards achieving that goal in 2020, according to new consumer research commissioned by global developer, Lendlease. 
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The national survey of 1,005 Australians aged 18-40 years revealed eight in ten dream of owning their own home, with almost half (47 per cent) believing they will be in their own home within the next five years. Overwhelmingly the Australian dream of home ownership is alive and well, with 79 percent optimistic they will own a home in the future. 
Conducted by McCrindle on behalf of Lendlease, the research also found one in six young Australians believe they will be able to buy a home before the end of 2021, and another third are confident they will buy before the end of 2025. 
There was a marked sense of optimism about the coming 12 months, with a quarter of young Australians (25%) believing 2020 is the right time to buy a home. Three in ten (30 per cent) are also more confident they will be able to buy a home in the next 12 months compared to the past 12 months. The survey also found a majority of young Australians (58 percent) would strongly steer towards buying and building a new home, over an existing home (42 percent). 
The motivations for home ownership, according to the survey participants, are having a place to call their own (69 percent), having their independence (52 per cent), a place to raise a family (50 per cent), and the security home ownership provides (49 per cent). 
Saving for a deposit was identified as one of the most challenging obstacles (55 percent) to overcome on the path to home ownership. More than half (54 per cent) surveyed who are yet to purchase their first home are currently saving for their deposit, with one in five “saving hard”. According to the research, the top five ways young Australians are saving for a home deposit are: 
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1. Cutting back on small expenses (e.g. cafes, eating out, etc.) (45 percent) 2. Saving money with their partner (41 per cent) 3. Opening a specific savings account (36 per cent) 4. Sacrificing a luxury expense (e.g. holiday, new car etc.) (35 per cent) 
5. Starting a side hustle (24 per cent) 
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Interestingly, the media-popularised “OK Boomer” sentiment was strong among the survey participants, with 79 per cent believing the challenge of buying a home today is more difficult for their generation than it was for their parents. 
Many young Australians have seriously/somewhat considered purchasing on the fringes of a city (50 per cent), in a major non-capital city (48 per cent), or a regional area (46 per cent), and have brainstormed creative ways to make their home-ownership dream a reality. Gen Z appeared to be more sustainably minded, with 25 per cent more likely to choose their location allowing them to live more sustainably. 
Lendlease’s consumer research comes in response to the federal government’s First Home Loan Deposit Scheme, which was launched in partnership with the National Housing Finance and Investment Corporation on 1 January to support eligible first home buyers purchase a home sooner. Supporting up to 10,000 loans each financial year, the initiative will provide a guarantee that allows eligible first home buyers to purchase a home up to a value determined per state.
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There are 10 Lendlease communities across New South Wales, Victoria, Queensland and Western Australia that are supporting burgeoning interest in the First Home Loan Deposit Scheme by offering additional incentives beyond the federal government’s 10,000-person cap. 
Lendlease’s bonuses range from stamp duty on land being covered at Calderwood Valley and Bingara Gorge; $10,000 off selected lots at Alkimos Beach, Alkimos Vista, Aurora, Atherstone, Elliott Springs and Harpley; to a $10,000 housewarming gift for properties purchased at Springfield. 
 Matt Wallace, managing director of communities says, “Our new consumer research reveals that 2020 is the year for first home buyers to get into the housing market. Not only are interest rates still near record lows, but first home buyers are able to take better control of their finances with a range of industry initiatives designed to help them out.
"We understand the many challenges facing first home buyers and are ready to help them get their foot on the property ladder. Through several of our communities across Australia we’re offering compelling incentives to fast-track the home-buying process.”
Claire Madden, social trends researcher, demographer &amp; generational expert notes, “Despite Gen Y and Z growing up with the rhetoric of rising housing and living costs, they are showing an optimism and resilience in holding onto the great Australian dream of home ownership.
"Over four in five in our younger generations have the desire to own a home, and almost two in five are extremely or very optimistic that it will become a reality.
"Whilst saving for the deposit is seen by many as the biggest obstacle, these tech-savvy, agile and entrepreneurial generations are switched on to new opportunities and are likely to embrace the home-ownership deposit schemes and find a way to see the dream realised." 
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j.ballantyne1990-6AQqhLzZaK

Home ownership dream still alive for young Australians: Lendlease

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GUEST OBSERVATION
As regional Australian towns face the prospect of <a href="https://www.smh.com.au/national/nsw/plan-c-is-a-problem-a-town-without-ground-water-nears-day-zero-20191022-p53334" target="_blank">running out of water</a>, it’s time to ask why Australia does not make better use of recycled wastewater.
The technology to reliably and safely make clean, drinkable water from all sources, including sewage, has existed for <a href="https://www.applied.org.au/wp-content/uploads/2019/04/drinking-water-through-recycling-full-report.pdf" target="_blank">at least a decade</a>. Further, <a href="https://www.pc.gov.au/inquiries/completed/water-reform/national-water-initiative-agreement-2004.pdf" target="_blank">government policy</a> has for a long time allowed for recycled water to ensure supply.
The greatest barrier to the widespread use of recycled wastewater is community acceptance. Research from around the world found the best way to overcome reluctance is to embrace education and rigorously ensure the highest quality water treatment.
<a href="https://images.theconversation.com/files/298470/original/file-20191024-31434-187ua6o.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/298470/original/file-20191024-31434-187ua6o.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
In 2006 Toowoomba voted against introducing recycled water, despite extensive drought gripping the area. <a class="source" href="https://www.flickr.com/photos/allanhenderson/2351100815/in/photolist-nQkp38-4zL1mX-aDPpEZ-aDPpLV-fEdSCh-hvcdT7-nQiamA-o7ESdb-fEdQK7-NyMorG-o7Mtex-hvcFhN-nMBXnf-29iZvnt-uobZDu-uEkpLu" target="_blank">Allan Henderson/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/" target="_blank">CC BY</a>
Why not use stormwater?
Many people are happy to use recycled stormwater, while being reluctant to cook, drink or wash with recycled household wastewater. But there are technical, cost and supply issues with relying on stormwater to meet our country’s water needs. Stormwater has to be cleaned before it is used, the supply can be irregular as it is reliant upon rain, and it has to be stored somewhere for use.
On the other hand, household wastewater (which is what goes into the sewerage system from sinks, toilets, washing machines and so on) is a more consistent supply, with <a href="https://blogs.ei.columbia.edu/2011/04/04/from-wastewater-to-drinking-water/" target="_blank">80% or more</a> of household water leaving as wastewater.
Furthermore, wastewater goes to treatment plants already, so there is a system of pipes to transport it and places which already treat it, including advanced treatment plants that can treat the water to be clean enough for a range of purposes. There are strong economic, environmental and practical arguments for investing more effort in reusing wastewater to meet our water supply needs.
This water can be used for households, industry, business and agriculture, greening public spaces, fighting fires, and topping up rivers or groundwater.
The water cycle
Technically, all water is recyled; indeed we are drinking the <a href="https://www.xplorationstation.com/" target="_blank">same water as the dinosaurs</a>. Put very simply, water evaporates, forms clouds and falls as rain, and is either absorbed into the earth and captured underground or filtered through rock and goes back again into oceans and rivers.
When we capture and reuse water, we are not making more water, but speeding up the water cycle so we can reuse it more quickly.
<a href="https://images.theconversation.com/files/298473/original/file-20191024-31471-1tnktt1.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/298473/original/file-20191024-31471-1tnktt1.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Not pictured: the many, many animals and people every drop of water has passed through over millennia. Wikimedia Commons, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/" target="_blank">CC BY-SA</a>
We do already <a href="http://www.awa.asn.au/AWA_MBRR/Publications/Fact_Sheets/Water_Recycling_Fact_Sheet/AWA_MBRR/Publications/Fact_Sheets/Water_Recycling_Fact_Sheet.aspx?hkey=54c6e74b-0985-4d34-8422-fc3f7523aa1d" target="_blank">reuse wastewater</a> in Australia, with many parts of regional Australia cleaning wastewater and releasing it into rivers. That water is then extracted for use by places downstream.
Despite this, there have been significant community objections to building new infrastructure to reuse wastewater for household use. In 2006, at the height of the Millennium drought, Toowoomba <a href="https://www.bbc.com/future/article/20160105-why-we-will-all-one-day-drink-recycled-wastewater" target="_blank">rejected the idea</a> entirely.
However, since then a scheme has been <a href="https://www.watercorporation.com.au/water-supply/our-water-sources/recycled-water" target="_blank">successfully established</a> in Perth. We must examine these issues again in light of the current drought, which sees a number of Australian regional centres facing the prospect of <a href="https://meltwaternews.com/ext/mediac/213698325.pdf" target="_blank">running out of water</a>.
Lessons from overseas
<a href="https://images.theconversation.com/files/298467/original/file-20191024-31453-10p3sbb.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/298467/original/file-20191024-31453-10p3sbb.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Singapore has had enormous success in reusing wastewater for all kinds of purposes. EPA/HOW HWEE YOUNG
Despite initial reluctance, many places around the world have successfully introduced extensive wastewater recycling. Places such as Singapore, Essex, California, New Mexico, and Virginia widely use it.
Recent research from the <a href="https://www.wsaa.asn.au/publications" target="_blank">Water Services Association of Australia</a>, working with other research bodies, found several key lessons.
Firstly, the language we use is important. Phrases like “<a href="https://www.afr.com/companies/toilettotap-back-on-the-agenda-as-nsw-looks-again-at-recycled-water-20180919-h15kqh" target="_blank">toilet to tap</a>” are unhelpful as they don’t emphasise the extensive treatment processes involved.
The social media and news outlets can play a significant role here. In Orange County, California, wastewater was introduced through a slow process of building acceptance. Influential individuals were enlisted to explain and advocate for its uses.
Secondly, communities need time and knowledge, particularly about safety and risks. Regulators play an important role in reassuring communities. In San Diego, a demonstration plant gave many people the opportunity to see the treatment process, drink the water and participate in education.
We need to go beyond information to deep consultation and education, understanding where people are starting from and acknowledging that people from different cultures and backgrounds may have different attitudes.
El Paso successfully introduced wastewater through strong engagement with the media and significant investment in community education, including explaining the water cycle.
Finally, quality of the water needs to be great and it needs to come from a trustworthy source. The more it happens, and people know that, the more likely they are to feel reassured.
It’s clear the public expect governments to plan and act to secure our future water supply. But we can’t just impose possibly distasteful solutions – instead, the whole community needs to be part of the conversation.<img src="https://counter.theconversation.com/content/125798/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Roberta Ryan, Professor, UTS Institute for Public Policy and Governance and UTS Centre for Local Government, University of Technology Sydney.
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/80-of-household-water-goes-to-waste-we-need-to-get-it-back-125798" target="_blank">original article</a>.
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80% of household water goes to waste, we need change: Roberta Ryan

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Combined capital city home values went up 9.8% in the 2014-15 financial year, with Sydney having the strongest capital growth followed by Melbourne.
The latest CoreLogic RP Data Home Value Index found combined capital city home values increased by 43.1% between December 2008 and June 2015.
CoreLogic RP Data researcher Cameron Kusher said since the end of 2008, value growth in Sydney and Melbourne has stood head and shoulders above all other cities.
<a href="/images/2015/07/23/rp.jpg" target="_blank">Click to enlarge</a>
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“Over the past three years we’ve seen further growth in home values on the back of a renewed interest rate cutting cycle," Mr Kusher said.
"Since the financial crisis we’ve seen residential unit construction surge to record high levels… despite more units being built, most buyers still show a preference for a detached house.
"As a result of this trend, Sydney and Melbourne are the strongest housing markets for capital growth and we expect this to continue over the coming financial year.” 
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po-LsXgBTHBmX

Capital city home values up 9.8% in FY15: CoreLogic RP Data

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The HIA New Home Sales Report, a survey of Australia’s largest volume builders, recorded the first decline for 2015 in May. 
“The four month winning streak came to a modest end in May 2015 with total seasonally adjusted new home sales falling by 2.3%,” said HIA chief economist, Dr Harley Dale. 
“The decline was driven by a 5.1% dip in detached house sales, reflecting weaker monthly demand in four out of the five states surveyed.” 
“This is a softer result at face value, but delving beneath the surface reveals an aggregate profile of healthy new home building conditions in 2015,” Harley Dale said. 
“The mature stage of the new home building cycle primarily reflects further momentum in the ‘multi-unit’ sector, together with persistence of healthy conditions in New South Wales and Victoria.
“New sales of multi-units increased by 7.6% during the month to yet a new record level, with sales volumes up by 26.7% over the three months to May."
In the month of May 2015 detached house sales increased by 3.3% in Queensland, but fell by 2.3% in NSW, 9.9&amp; in Victoria, 5.2% in South Australia, and 8.1% in Western Australia. In the May 2015 quarter, detached house sales increased in NSW (+5.2%) and Victoria (+6.2%). Sales fell over the three month period in SA (-8.1 per cent), Queensland (- 7.5%), and WA (-1.3%).
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