Dr Sam Wylie

And if you're saving to buy a house, for instance, to buy an apartment or buy a house, then focus on those things.

Focus on interest rates, fixed rates, floating rates,

how inflation is affecting that, how much money you can borrow to invest, etc.

So filter out the stuff that's important for the short-term and medium-term goals that you've got.

Sure.

So first of all, let's start, Kate, with two types of interest rates.

So floating or variable interest rates.

Usually we call them variable interest rates, but sometimes floating.

So interest rates that go up and down versus interest rates that are fixed.

And you can get a mortgage of either kind.

You can get a mortgage where the interest that you pay is fixed for three years or five years, but it's more common, about 75% of mortgages in Australia are variable, floating interest rate.

And so let's just take an example.

Let's say that you want to get a mortgage for $500,000.

So you saved $100,000.

You're going to borrow $500,000.

That would mean that you would have

a loan to valuation ratio, which was 500 over 600.

Of the $600,000 apartment that you're going to buy,

The bank's bringing $500,000, you're bringing $100,000.

The loan, the $500,000, to the valuation, the $600,000, is the $500,000 over $600,000, which is about 85%.