Today the RBA announced that they will cut rates by a further 0.25%. This is great news for anyone with a mortgage on their home and for property investors. It is not-so-great news for retirees with retirement income derived from cash savings. The rate cut was primarily due inflation figures released recently which showed the country has experienced low inflation of 1.0%. There is also talk from economists that future rate cuts are likely.
I often get asked by people new to the property market about how they should structure their investment property loan. The answer is never simple since there are many things to consider including fixed vs variable rates, interest-only vs interest+principal, your cash-flow situation, your investment horizon and the likelihood of future rate rises.
Mark Sinclair is the principal planner at Sinclair Wealth Services