Craig

Thanks, Craig.

Take care.

Well, the thing is, if you wait too long to apply for a loan when interest rates have had their full, you know, rising cycle, you know, so currently you should be able to get a variable rate around 2.5, a discounted variable rate around about 2.5, 2.75%.

Now, I think the mortgage rates, not the cash rate, but the mortgage rates will probably end up around 4.5%, something like that.

So, if you wait until that happens, you could actually be...

priced out of the market in terms of your borrowing capacity.

So some modelling I've seen done by some great brokers suggests that for every 1% rise in interest rates, it's going to reduce your borrowing capacity by up to 10%.

And that could just put your property dreams even further out of reach.

So I think the current run of interest rates will level out, I reckon, at some point in the next 12 months.

And then there'll be a turn in consumer sentiment again.

At the moment, there's negative consumer sentiment.

You're seeing buyers just sitting on their hands, doing nothing, vendors saying, I'm not selling.

But the trick to being a smart investor, Craig, or a smart buyer is to get ahead of the pack and run at a different speed to the herd.

It can be really hard to be what I call a counter-cyclical buyer, but the long-term rewards are really significant.

So for me, rising interest rates presents an amazing opportunity.

It doesn't deter me from achieving my long-term goals of building up a portfolio.

What I do is I look at the numbers and I build in the cost of the higher debt at a higher figure compared to what I'm paying now, build in that buffer and make sure that what I'm buying today represents good value both now and in the future.

And I simply do the calculations and work out I can afford the repayments and I'm loving it because I'm able to negotiate great prices at the moment.

And welcome to another episode of the Real Estate Podcast available on iHeartRadio and also Spotify and Apple Podcasts or wherever you get your podcasts from.

It's another weekend, yes, right around Australia on this Saturday morning for June the 18th for 2022.