Zippy Financial Zippy Financial

They say you should never judge a book by its cover, but the truth is, we are all influenced by the way something presents.

Whether it’s the cover of a book, the clothes someone wears or how a home is decorated, presentation is important. In fact when it comes time to sell your house, presentation is not just important, it’s crucial – as it feeds directly into the price you can expect to fetch.

In recent years a number of businesses have popped up to help people style their homes for sale, with anecdotal evidence that property styling can add tens of thousands of dollars to the ultimate sale price.

One of my very clever clients decided that she wanted to style her home in an effort to help property shoppers fall in love with it. The only problem? She was getting quotes of between $6,500 and $8,000 to stage the house for a period of 6-8 weeks. And of course, she wouldn’t get to keep any of the lovely items placed around her home!

If you have the budget to spend this money, it can be well worth the investment, as a beautifully staged home can attract more buyers and encourage more offers, ultimately pushing the price up.

But if you are a little creative and want to save some money, you could do what my client did. In the end, she decided to stage the home herself. She went shopping and bought a few key items – taking out the major expense of the sofa, which set her back $1,200, she spent around $1,500 in total on a range of different items of furniture and accessories.  

Property styling shopping list:

Coffee table$70
Dinner table$80
Dinner chairs$200
Paris pic$40
Doona cover$250
3x bed sheets$120
Pillows 2x$10
Stack tables$30
Balcony plants$100
Bathroom set$30
George Jensen bowl$35
Table runner$20
Bedside tables$300
Bedside lamps sets$75

The best part is, while she is going to take her new bedding and the sofa with her to her new home, she plans to re-sell everything else. Even if she only sells each item for 50% of what she paid, she will still reduce her out of pocket costs substantially.

Her total spend was $2,780. If she sells the bits and pieces she doesn’t need for around $600-800, her total outlay will be around $2,000.

The moral of the story: you don’t have to be out of pocket by thousands and thousands of dollars to stage your home!

Which areas of your home should you style?

If you’re working with a small budget, stick with the key areas that really “sell” your home: the kitchen, the bathrooms, any outdoor space, and the master bedroom. If you can get these spaces looking the best they possibly can, you’ll be more likely to have buyers seeing your property in its best possible light.

The benefits of staging your home are not only found in the fact that you can de-personalise the space and make it look like something out of a magazine, but you can also help potential buyers imagine themselves living in the space.

Brunch on the courtyard patio… The dining table set for six guests… comfy, bright cushions added to the outdoor furniture… a bathroom filled with candles and bath salts, ready for a relaxing break…

These are all small but effective ways you can style and stage your home so that a would-be buyer can really imagine the best ways to use and live in the space.

It all goes to show, with some creativity and a keen eye for a bargain, you can have your home looking fresh, clean and stylish – and ready for buyers to submit an offer!

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation or needs before making any decisions based on this information. 

New research shows that in many suburbs across Australia, it may actually be cheaper to buy your home and pay a mortgage, rather than renting.

The research, released by Aussie Home Loans in conjunction with CoreLogic, reveals that many Aussies would actually be better off making home loan repayments than paying a landlord.

In fact, more than half of the country would be financially better off if they owned their home!

The Buy vs Rent Report has analysed suburbs across Australia where mortgage repayments are cheaper than rental payments, and it found that over half (52.2 per cent) of Australian suburbs would be cheaper for homeowners than for renters.

The research is based on:

But even those who prefer a variable interest rate may be better off.

Based on a variable home loan rate of 3.65%, the report found that 1 in 3 households (or 32.9%) would find it cheaper to pay down a mortgage than pay rent on a house.

These results are hardly surprising, given the fact that mortgages are currently the cheapest they’ve ever been. Interest rates are now at lows we’ve never witnessed – I’ve certainly never seen mortgage interest rates this cheap, and I began working in the industry 30 years ago.

The really interesting part to me is that these interest rates are also quite conservative. Since the last RBA rate cut, it’s now possible for us to find you a fixed-rate home loan with an interest rate beginning with a 1.

Even for those of you who prefer the flexibility of a variable rate loan, there are many rates on the market that are far more competitive that 3.65%.

In any event, this research is good news for you, as it means your dreams and aspirations of buying your first or next home may be closer than you think.

How close are you to buying your home?

For those who are interested in buying a home, there are a few things you need to know.

First of all, the good news: the requirements for saving a deposit for first homebuyers is now far lower than it has been in the past.

While many banks and lenders would prefer to see a 20% deposit, in the major capital cities at least, this is something of an unrealistic target.

The median property price in Sydney has been hovering around the $1m mark in recent years, which means a 20% deposit is worth around $200,000 – a figure that is far outside the average Aussie’s ability to save.

Enter the First Home Loan Deposit Scheme (FHLDS) – a program run by the government, which allows first-time buyers to buy a home with just a 5% deposit, without having to pay lenders mortgage insurance.

As long as you can provide evidence of at least 5% in genuine savings, many banks and lenders will consider your loan application.

Now, what does genuine savings mean? It could be comprised of:

If saving a 5% deposit isn’t quite achievable – or if you’re not a first-home buyer, so you can’t access the FHLDS – you may be able to buy a home if you’re parents are willing to offer a family guarantee. This essentially means they’re giving the bank some security over their own property, to help you get a loan for your property.

There are a number of other grants, schemes and incentives to help buyers get into the property market, including the First Home Owners Grant (FHOG); Home Builder, which provides owner-occupiers with a grant of $25,000 to build a new home or substantially renovate an existing one; the First home super saver scheme, designed to help you save more money for your deposit; and there are also a number of first-home buyer discounts and concessions off your stamp duty.

These grants and schemes offer the chance to save tens of thousands of dollars off the purchase price of your home – and with interest rates this low, make the prospect of home ownership the most affordable it’s been in years.

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation or needs before making any decisions based on this information. 

Since the Royal Commission into financial services ended, there’s been a change in the way that banks and lenders review your home loan applications.

The details of these changes are complicated – I’ll give you a simplified update in a moment. However, the end result has been brokers like me spending hours upon hours, reading through bank statements to make sure your UberEats, online shopping and AfterPay expenses are all accounted for in your “estimated expenses” list in your loan application.

You see, after the Royal Commission, laws were introduced that were designed to protect you. The government wanted to ensure that borrowers don’t end up biting off more than they can chew financially.

After all, the Royal Commission had revealed story after story of everyday Australians being ripped off or financially disadvantaged, due to banks’ and lenders’ lending money very freely.

When the government realised that many people were getting mortgages and debts that they couldn’t afford, the decision was made to make it harder – much harder – for people to get a loan. They did this by introducing strict and onerous rules and regulations around how a loan application is processed.

As you can imagine, with such a massive shift in the way that banks and lenders assessed loan applications, these changes have resulted in a number of people who would have previously been approved for finance, finding themselves unable to get a home loan.

So – what impact did restrictive lending laws have on property markets?

With fewer people able to borrow money and less access to finance, most people can’t move forward with a property purchase, so these restrictive lending laws did take some of the competition out of the property market.

Major capital city markets in Sydney and Melbourne were already starting to simmer down after a boom period of strong growth.

When these restrictive lending laws were introduced – together with other regulations, designed to make loans more expensive and hard to access for landlords – property markets slowed down.

In fact, we saw very minimal price growth (or even price falls) in many markets.

Wait – but these restrictive laws are set to change again?

That’s right! One thing these laws didn’t factor in was a forthcoming global pandemic. In an effort to keep the economy ticking over – because property transactions generate a huge amount of taxes and economy activity – the Federal Treasurer Josh Frydenberg has announced that in March 2021, these laws will be wound back.

The goals is to make it easier for consumers to get a loan, once revised laws are passed.

If you’re considering buying a property – what does this mean?

If you have been locked out of the market and unable to access finance, this means you should have an easier time gaining loan approval.

For borrowers who are already able to access finance, this means you should consider acting sooner rather than later!

This is because in March next year, there’s going to be a big increase in the number of people who can afford to buy property.

When demand for property surges, and supply doesn’t meet the demand, then prices go up. So if you wait until next year to take action when you’re ready to buy now, you could find yourself competing against many more people.

I’m not a property expert, but I am an expert when it comes to finance. Whether you’re ready to start property shopping now or you think you’re still 12 months away, feel free to get in touch as my team and I can help you get “home loan ready”.

This is really important, because all of the banks and lenders have wildly different policies at the moment. I can have a borrower in front of me who would easily be approved by Bank A, but who would be rejected by Bank B – simply because their appetite for risk and their policies are different.

This is why my advice is to speak to a broker for tailored advice, if you wish to refinance or you are thinking of buying a home. We may be able to help you get into a loan that saves you a small percentage on interest, or we may be able to find a lender willing to approve your loan when your bank says no. As a broker we always act in your best interests and best of all, our service is free! The banks pay our commission, not you – so you have nothing to lose, and everything to gain.

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation or needs before making any decisions based on this information. 

There are currently so many opportunities for renters to consider homeownership.

The governments various grants and the low interest-rate environment give renters the opportunity to enter the property market.

People are now making homeownership a higher priority and looking to buy to get out of the rental trap. This year has reinforced how important it is to have a place to call home.

Is homeownership your priority?

The pandemic has taught people that you don’t need to be as close to the city as you once thought – with work from home arrangements you may need to travel into the CBD less. It really makes places like the areas on Central Coast or Bowral highly desirable, as you have space, nature, bushland, and also a tight-knit community that look after each other.

The pandemic has proved how flexible work environments can be and how we can be physically distant but still connected. That opens up the possibility of movement away from the city and I think people are going to make the most of that. We are certainly seeing a lot of people wanting to get out of Sydney. We are also seeing a lot of people wanting to get out of apartments as they want more space working from home.

One thing is for sure the housing market is certainly busy.

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation or needs before making any decisions based on this information. 

Everyone wants to pay less on their mortgage and refinancing is one strategy that can help lower your interest rates, but is it worth it? We take a look at how you can get the most out of refinancing.

Why refinance?

Generally, people refinance to negotiate a better deal on their home loan and pay it off sooner. Depending on your situation, you should be able to save money by taking advantage of lower rates or new products that were not available when you first negotiated your home loan.

To put this into perspective, let’s say you took out a $300,000 loan at 7.5% over 30 years with monthly repayments of $2,098. If you refinance to a new loan at 4% you could save $239,543 ($665 per month) over the life of the loan by making the minimum repayments of $1,432 per month.

Once you have refinanced, if you continue making the same minimum repayments as your previous loan ($2,098 per month) you will potentially save $346,912 and pay off your mortgage 165 months early.

Make it work for you

Take advantage of your refinance loan by:

When should you consider refinancing?

Life brings change and your mortgage needs to keep up – maybe now you have a partner, a young family, a new job that pays more or have become empty nesters with extra cash on your hands. If the terms of your current loan do not allow you to pay more (or less) on your principal amount, it could be worth considering refinancing into a more flexible arrangement.

Refinancing or loan switching can save money but you might incur costs such as exit and establishment fees, government charges and administrative or legal expenses. These costs need to be weighed against the benefits to determine if you will save in the long run.

Before you make any decisions, be clear on your reasons for refinancing. It is also a good idea to speak to an experienced mortgage broker or financial expert to ensure you are making the right move for your financial situation.

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information.

Louisa J Sanghera is a credit representative (437236) of BLSSA Pty Ltd AC 117651760 (Australian Credit Licence No. 391237). 

Your home loan is probably the biggest investment you will make in your life, and a debt that most people would like to pay off as quickly as possible. But how achievable is that?

Here we look at some ways to pay off your mortgage sooner… 

Re-evaluate your mortgage

How long has it been since you last had a good look at the details of your mortgage? Do you know where you are in terms of the progress you are making on paying it off, and importantly, is it still the best mortgage product that suits your needs?

With a long-term commitment like a mortgage, it is tempting to set and forget, and to just make repayments as they are due. But this can be a costly mistake. It is vital to regularly re-evaluate your mortgage and refinance where necessary. New products are always becoming available, rates change ad so can your circumstances. 

By regularly re-evaluating your mortgage, you could make real savings, pay off the debt sooner or release equity to invest elsewhere. 

Make more frequent payments

Time is money and you may not think you can afford to increase the amount of repayments you make to your mortgage, but it is a very worthwhile strategy which could see you clear your loan faster, with the added benefit of having to pay less interest overall. 

If you presently pay your mortgage monthly, consider changing to fortnightly or weekly repayments (if your mortgage product allows). For example, if your monthly mortgage payment is $3,000, half this pay to $1,500 each fortnight and by the end of the year you will have paid off $39,000 rather than $36,000.

Don’t just pay the minimum

A minimum repayment is just that – a minimum! Many loans allow you to pay more than the minimum, whether it be ad hoc payments or regular overpayments. Check with your lender as to the terms of your particular product to see how much you can overpay. 

Even small increases can make a real difference. Simply by rounding up a number or adding an extra $100 to your payments will reduce your mortgage. If you don’t think this is affordable to you, start thinking outside of the box – consider putting bonuses, tax returns and gifts into your mortgage and you will soon be on your way to clearing your mortgage faster. 

Maintain repayment levels when interest rates fall

Even if your lender reduces your repayments when fees or interest rates decrease, ask them to keep your repayments at the same level as before and you will pay down more of the principle with each payment that you make. 

Get offset

If your mortgage allows for it, use an offset account – this is an account which is linked to your mortgage, and the amount of money in the offset account is deducted from your outstanding loan balance when the interest is calculated. For example, if your mortgage is $600,000 and your offset account has $20,000 in it, you will only pay interest on the remaining balance of $580,000.

An offset account saves interest whilst still giving you access to your savings and for property investors, it means they can maintain the tax deductibility of the mortgage. 

Shop around for a better deal

Your mortgage needs to suit your personal circumstances and the loan you chose previously might not be suitable any longer. If your circumstances have changed or are about to change, consider whether or not your current mortgage is still the best product for you by discussing your needs with your mortgage broker who will be able to find you the right product and negotiate rates with lenders on your behalf. 

But remember, you may be liable to pay break costs or other fees to your current lender if you decide to make changes to your loan, so this needs to be carefully explored when evaluating the benefits of making any changes. 

Your mortgage broker will be able to provide details of any potential costs to make sure you have the right loan to get that balance down sooner. 

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. 

Louisa J Sanghera is a credit representative (437236) of BLSSA Pty Ltd AC 117651760 (Australian Credit Licence Np. 391237). 

Recently, I sat across from a client who had a casual $2 million sitting in his bank account. That’s right – two million dollars, just languishing in an ordinary bank account, not achieving very much. 

He wasn’t investing in the stock market. He wasn’t contributing extra to his super. And the only property he owned was the home he and his family were living in. 

Can you imagine? He had $2 million just sitting in the bank; that is known as dead money. With interest rates in the toilet and so many better options out there he could be using to grow his wealth, this seemed like such a wasted opportunity to me.

He may as well have had it stuffed underneath his mattress!

Of course, I knew that I had to get him in front of a great financial planner, pronto. 

This is something that comes up quite a lot for me as a finance broker. I’m not qualified or certified to give money advice, so in these situations, I always refer my clients to a reputable financial planner. 

As a broker, all my clients require adequate TPD and income protection insurance, and most of them have no idea how to get it, what products are available or why they even need it in the first place. 

So, virtually every borrower I meet needs the aide of a financial planner to navigate this. Not to mention those clients whose expenses are holding back their borrowing power, or those who have no clue how to best structure their finances to take advantage of tax breaks and other incentives. 

If I can refer these clients to a planner I know and trust to take care of these needs, not only does that planner benefit from a new client, but I’m also able to offer a greater variety of products to the client and possibly write them a larger loan. 

It’s a win for the client, who moves towards a better financial position as a result of the advice, and a win for the financial advisor, who builds new business… which is why it blows my mind that more financial planners and brokers don’t collaborate. The benefits for all parties involved can be huge!

Accordingly, for planners, taking on new clients means loads of information gathering as you get to grips with the state of their finances and their short and long-term goals. In the process, of course, you will tally up their current debt and how this will factor in your planning. 

This is the ideal opportunity to hand over to a broker, who can help with refinancing said debt at a more attractive rate, or recommending a product with inclusions that will better fit their goals. When they arrive back at your office with more manageable monthly debt repayments and the spare cash that’s been freed up through refinancing, they’ll be better able to implement your suggestions and the financial planner can take care of their insurance needs. 

In my mind, a savvy planner is one who looks for debt first, as this is an area where substantial savings can be made without any real changes to the clients’ lifestyle or goals. Clients are more willing and able to commit to these painless adjustments than they might be to a strict budget, and if they’re happier, they’ll refer more friends, family and colleagues to the professionals who have helped them.

The cross-collaboration opportunities don’t stop there. In our increasingly online environment, working together allows financial planners and brokers to boost our social media engagement, grow our LinkedIn presence, and get more visits on our websites – all of which can lead towards more enquiries, more referrals, and more clients.

It’s essentially free advertising. For instance, I might share and promote a great blog written by a planner colleague of mine, and in turn, he’ll do the same with my most recent article. We’ll comment on each other’s updates and congratulate each other on accolades and awards, like my recent Broker of the Year and Customer Service of the Year wins at the Momentum Media Australia Business Awards. All of this serves to build our reputations and credibility in the eyes of potential and existing clients.

And all the while, we are increasing our online visibility and driving more and more traffic, enquiries and commissions.

What do you think? Are you a planner who can see the value in collaborating with an experienced broker – or perhaps you’re a broker who never realised just how complementary the two professions are? If so, maybe it’s time to start hitting up your connections and see where it takes you both.

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation or needs before making any decisions based on this information. 

Louisa J Sanghera is a credit representative (437236) of BLSSA Pty Ltd AC 117651760 (Australian Credit Licence No. 391237). 

Do you know what Open Banking is, or how it’s set to impact you? Open Banking could be just about the biggest thing that’s happened in the Australian finance industry this century – so it’s probably a good idea that you have an understanding of exactly what it is, and what it means for you.

Regulatory changes, tech-driven innovation and evolving consumer preferences have all led to this new development, which will make the usually quite secretive and hard-to-navigate finance world much more accessible to the average person.

Essentially, Open Banking gives consumers unprecedented access to, and power over, their data.

In a nutshell, you’ll be able to share your selected banking data with accredited third parties (a process known as read access) and benefit from the new products, services and competition this change will generate.

But why is Open Banking important? How did it come about – and what will the end result be for borrowers?

The open data economy

Open Banking forms part of the Consumer Data Right (CDR), which was passed by the Federal parliament in August 2019 and covers the telecommunications, utilities and banking industries.

That’s a real mouthful, but what this legislation represents is a major step towards an open data economy in our increasingly interconnected, online world. The UK and the European Union are already enjoying the benefits of Open Banking systems, so it’s about time we caught up!

The ACCC has given the four major banks from the 1st of February 2020 to the 1st of July 2020 to implement the sharing of consumer data, and will review the rest of the rollout through the year. Other banks and lenders will be ringing in the changes from 2021.

Savings accounts, term deposits and credit cards will be among the first products to join the Open Banking ranks, followed by mortgages and personal loans, and eventually business and investment accounts, retirement savings accounts and trusts.

By 2022, we should have a fully-functioning Open Banking system, and the ACCC will move on to applying the CDR to other sectors such as utilities.

True transparency

Open Banking is a much more transparent system than we currently have. You will be able to instruct your bank to send your data to other banks, financial institutions and authorised organisations, so that signing up for a new mortgage, personal loan, credit card or bank account will be much simpler.

Instead of chasing up personal indentification documents or printing out page after page of transaction records, you will be able to direct your bank to send your data directly to the new institution on your behalf – a massive time-saver.

You will also find that the process of comparing products and services should become much easier. Working with an experienced and qualified mortgage broker remains the most effective way to get the best possible loan for your situation, as we are in the industry being updated on the latest market changes and credit card movements every day, which means we can direct you towards the loan product (and the lender) that best suits your needs.

However, Open Banking is a massive step in the right direction for a more robust and competitive banking industry overall, and I think we can all agree, that’s good news for borrowers.

The nitty gritty: Did you know?

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation or needs before making any decisions based on this information.

When you are looking for your first or next investment property, you are probably trying to approach each inspection through your potential tenant’s eyes. Will people want to live here? Will they pay a premium rent for these particular features and amenities? Will they love it so much that they will stay long-term, saving you the bother and expense of advertising for new tenants… And of course, how much of a return will the property pay?

These are all valid and important questions. But unless you plan on holding onto the property forever, eventually you will need to sell it. And it might surprise you to learn it will more than likely to be a homeowner, not an investor, who takes it off your hands.

Contrary to what media would have us believe, the real estate market is not dominated by investors. Most people out there actively in the market are actually buying homes to live in – investors do not have anything near a monopoly over the Australian property market.

In fact, owner occupiers drive the market, as they comprise 70 per cent of buyers. So, it makes sense to look for properties that appeal to these buyers – otherwise you are narrowing your pool of sellers and potentially sabotaging your capital growth.

Buyer’s agent Brady Yoshia says that considering owner occupier appeal is important when purchasing any property, be it to live in yourself or as an investment.

“From an investment perspective, to attract high-quality tenants the property needs to meet their desired lifestyle and accommodation needs,” Brady advises.

“Tenants are more discerning than ever, and if you wouldn’t like to live in the property due to its condition or location, other people will no doubt feel the same.”

Brady says that this applies to both tenant and future owner occupiers, and also suggests that it’s a good idea to consider how you would feel personally about living there, just in case you find yourself in the position where you need to move into the property down the track.

So, how do you identify such a property?

Brady says there are a number of features that owner occupiers will be on the lookout for, including:

If you are thinking of buying a very unusual property, perhaps because it is on the more affordable side or because it meets your unique requirements, then consider whether this will appeal to future buyers – or are you potentially selling yourself short?

Beyond these factors, Brady says it is important to know what is happening in the area, from a development and population growth perspective – for example, are there any significant infrastructure upgrades planned, which might affect access or liveability? You can also enquire with the local council to find out if there are any large-scale development applications in the pipeline.

When imagining your future buyers, consider all the possibilities – professional couples, young families and even retirees and downsizers. Shops and essential amenities like doctors, banks and Centrelink offices should all be relatively easy to get to, along with at least two options for commuters such as a main highway and a train station.

“Areas that have owner occupier appeal are usually within the catchment area for good schools,” adds Brady; you can find maps online that will show you where these boundaries lie.

Public transport and access to universities and commercial hubs and proximity to hospitals are also important, which areas such as the CBD, Parramatta, Chatswood and Macquarie Park in Sydney all being good examples of suburbs with both owner occupier and investor appeal. In Melbourne, houses near coveted schools such as Box Hill High and Balwyn High are always in demand, along with anything in the sunny bayside area.

But regardless of the specific city, keep in mind that it is owner occupiers that drive the market. If you want a property that has wide appeal now and in the future, then it pays to keep both renters and homeowners in mind when shopping for your next property investment.

This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation or needs before making any decisions based on this information.


When you are young, being the owner of your very own car is the ultimate dream, and it has been considered a rite of passage for many decades. But has that changed over recent years?

Having the freedom to go wherever you want, whenever you want, is one of the most important milestones of adulthood – at least to teenagers, who have spent their entire life until this point shepperded from point A to point B by loved ones. 

However, data from the recent Household, Income and Labour Dynamics in Australia (HILDA) survey shows us that between 2011 and 2016, the number of young Australians getting their driver’s license at the ages of 18 and 19 has actually decreased six per cent. 

A 2019 article, Millennial mindset exacerbates car sales slide, published in The Australian Financial Review, discusses this decline in car sales, attributing it to a “greater reluctance by young people to become car owners.” There could be a number of reasons behind this decline, including the cost and increasing regulation and requirements around getting licenced. Also, the uptick in ride sharing and online delivery services such as Uber and UberEats might mean that people don’t require cars as much as they used. 

Another potential reason? Young people may be putting their time, energy and money towards buying property instead. 

Why you should ditch your car for a house deposit instead

While a large number of Aussies still place huge importance on owning a car, more and more young people are also starting to realise the benefits of forgoing personal modes of transport, all in the name of home ownership. 

While real estate is generally always a sound investment, buying a car might not be. It’s common knowledge that once you purchase a car and drive it away, it immediately depreciates in value. This means that car is an asset – one that declines in value every day – rather than being an investment. 

The catch here is that the longer you have your car, the less it’s worth. This is due to that depreciation we mentioned, which is the result of regular wear and tear, as mileage racks up, and as more services and fixes are required. 

Another little-known fact is that your car loan repayments are doing you no favours with the bank either. While it can be helpful to your credit rating to be paying off a car (provided you are making your repayments on time), the more financial obligations you have each week, the less money a bank or lender is going to be willing to lend you.

For instance, it is estimated that every $5,000 in personal debt you have, reduces your borrowing power by up to $20,000. Having a $20,000 car loan could mean a bank is willing to lend you $80,000 less than it would if you didn’t have a car. 

If you are trying to pay off a car loan while simultaneously trying to put money aside to buy a home or an investment property, you might find yourself saving for quite some time. As anyone who owns or has owned a car before knows, you tend to constantly have one hand in your pocket. Car servicing, registration, petrol and general upkeep can all be quite costly. 

If you have read this and you are thinking with regret about the car parked in your garage or driveway, don’t despair. Instead, consider whether you could live without it? By selling your car, you will not only enjoy a cash windfall that could be used to help you purchase a property, you will also have less financial obligations every week in terms of repayments, petrol and servicing. 

Remember: the sooner you start working towards the dream of owning your own property, the sooner it will happen. If you would like to discuss your overall financial situation to see how soon you could buy a home or investment property, contact us today. 


This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation or needs before making any decisions based on this information.