Boothy Bites Episode 9 - 2023 wrap-up | Offers to look out for | Lydian HQ this year

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00:00:00:00 - 00:00:08:33
[Jackie] Hi everyone, and welcome to the last Boothy’s Bites for 2023. Boothy, can you believe it? We actually made it. We got here.

00:00:08:38 - 00:00:15:20
[Chris] Yay, Christmas! Where's my Lydian Christmas hat? Ho, ho, ho!

00:00:15:25 - 00:00:21:18
[Jackie] We're both wearing green, so we’re very festive. We are ready for Christmas.

00:00:21:18 - 00:00:22:39
[Chris] That is exactly right.

00:00:22:44 - 00:00:26:55
[Jackie] So as always, let's kick off with the RBA news.

00:00:27:00 - 00:00:43:37
[Chris] Yes. So really, I suppose, you know, it's just nice. We've got a bit of a breather and also the commentary now is a little bit... Yeah, look, we're still watching inflation, which is obviously important. That's on everyone's mind. But you know, the expectation for next year, I think we've spoken about this a fair bit is that inflation is going to come off okay.

00:00:43:37 - 00:01:11:31
[Chris] So, you know, that seems to be on track. We've got the next meeting, which is going to be February now. So obviously January we get a breather, too, which is wonderful. And in fact, the interest rates across the bond markets really, really decrease quite quickly. And what I mean by that is that when the bank goes and funds its balance sheets with bonds, interbank bonds, the funding costs are a lot less now today for like two years, three years out to ten years than they were pretty much a month and a half ago.

00:01:11:31 - 00:01:29:34
[Chris] So what that means is hopefully the fixed rates will start falling a little bit as well from the banks, which we will be interesting to see. So the forecast for interest rates and that sentiment now is that interest rates will start to reduce. The economists are talking about 2024 interest rate declines at the end of the year, which is good. Inflation...

00:01:29:34 - 00:01:48:57
[Chris] ...that hot topic is sort of cooling, which is great. And, you know, hopefully we can just take a bit of a break now and just get into this new norm for the next six months with where interest rates are. So yeah. Woo! It’s a big year. Where are we now? 4.35 cash rate and we were 3.1 at the start of the year.

00:01:48:57 - 00:01:54:25
[Chris] So you know, there's a big dip in the pockets for a lot of borrowers which is tough to manage. Yeah.

00:01:54:27 - 00:02:06:40
[Jackie] Yeah. And I must say don't let this get to your head, but pretty much every prediction you made this year in Boothy’s Bites has been correct. So it looks like you know your stuff, Boothy!

00:02:06:45 - 00:02:12:16
[Chris] Maybe recorded after the fact. I don't know. Maybe we can. (laughs)

00:02:12:21 - 00:02:23:20
[Jackie] Don’t tell everyone our secret! (Laughs) So now you all know our secret. So what's happening in the world of banking and specifically with APRA.

00:02:23:34 - 00:02:55:39
[Chris] Yeah. So I mean that was an interesting comment from APRA last week. So APRA, if we sort of talk about where they police the industry, they look after the banks. So any deposit taking institution, ADIs, the APRA legislation or I suppose policy dictates what the banks can and can't do and they came out last week and reaffirmed their servicing buffer, which is actually the banks now have to maintain a 3% interest rate above the actual rate for servicing.

00:02:55:44 - 00:03:15:57
[Chris] So for many borrowers going to a bank right now the servicing buffer is up at sort of nine, nine and a half percent, which is obviously very, very high. And that sort of APRA legislation is quite different from what ASIC is. So ASIC, they look after mortgage brokers, you know, from an advice perspective, but also they look after lenders which are a securitized lenders.

00:03:15:57 - 00:03:37:21
[Chris] So they're not actually they don't have deposit taking money to actually lend out. They go into the wholesale market, borrow money, and then they lend it out. So they're under a little bit of a different sort of policing and policy, and that's allowing them to use, I suppose, a few more niche ways to assess affordability. So that's why we've kind of got that, you know, I suppose a bit of disparity in the credit policy right now.

00:03:37:21 - 00:03:55:40
[Chris] So affordability and the credit policy that we're seeing around affordability is quite a wide gap between institutions today. Some are very conservative, you know, using that really high interest rate we talked about before, you know, nine and a half percent. Some of the other lenders are able to use a bit more flexibility around like a 1% buffer and things like that.

00:03:55:40 - 00:04:12:46
[Chris] So it really is important right now if you're struggling to actually borrow, what you need is reach out to a mortgage broker. And we've got access to over 60 different lenders and the policies are quite different of how much you can actually borrow with those lenders. So getting that advice is really, really important. So that said, a top tip from me.

00:04:12:58 - 00:04:18:27
[Jackie] I love it. And so do you have an update regarding interest rates on offer at the moment?

00:04:18:34 - 00:04:40:45
[Chris] I do, yes. So again, we've kind of got the smaller banks which are really trying to hit the discounted rates hard. Yes. So to attract new borrowers. So we've got Auswide, I think they've got a 5.89 or 5.94% P&I variable. Correct me if I'm wrong. Just Jackie knows. So just check in to Just Jackie. We've got I think we've got Heritage as well.

00:04:40:49 - 00:05:03:48
[Chris] I forget what that rate is, but that's a sub 6% interest rate right now. So anything sort of below 6% is really, really competitive. Yeah, really attractive rates from an investor perspective, we've got Beyond Bank, we've got a 6.14% P.A. variable and again Auswide, they’re doing an interest only investment facility at 6.24%. So yeah, definitely worth shopping around.

00:05:04:01 - 00:05:29:22
[Chris] Also we've got a couple of majors who've got specials on at the moment in particular Adelaide Bank repricing really, really well. And so it's Adelaide Bendigo Bank now, sorry. And also we've got St George Bank really fighting hard for new business as well. And then lastly in the self-managed super fund space, I mean look, a lot of clients may well be looking to either borrowing self-managed super fund in 2024 to buy an investment property or alternatively have an investment property and super fund.

00:05:29:27 - 00:05:46:26
[Chris] There's a lot of competition and interest rates right now as well. So we have MEzy which has got a 6.99% variable rate, which is pretty hot. And also we've got some more competition in that space now. So Pepper, which is a big lender, have come into that market now and want to ramp up their sort of self-managed super fund lending as well.

00:05:46:26 - 00:06:01:04
[Chris] So, you know, watch this space. We'll see some competition in self-managed super funds next year. So again, it's important to do that review, get, you know, get a check in with your your mortgage broker, check yourself when the super fund interest rates, check your home loan rates and just make sure we're fighting for the best rates for you.

00:06:01:13 - 00:06:05:00
[Jackie] Absolutely. And so what's the update on the property front?

00:06:05:11 - 00:06:25:51
[Chris] Yeah, so I think again, it's kind of, you know, bigging up myself, I've kind of cooled it as it is, you know, the more expensive properties are struggling to sell a little bit and also if and when they are selling, the prices of those are falling slightly. So you know that sort of, you know, two and a half, 3 million dollar properties, they're sort of struggling to find like an audience in a market now...

00:06:25:51 - 00:06:42:54
[Chris] ...because affordability is a lot harder for that sort of volume of debt whereby that the first home buyers I mean, there's a lot of incentives out there. In fact, the Queensland Government a couple of weeks ago came out with another incentive and I think they're giving away $30,000 to a select number of first home borrowers for new properties.

00:06:42:59 - 00:07:02:13
[Chris] So that's huge. I mean, $30,000 goes to get you started for a new home or a new apartment. You know, it's worthwhile sort of checking some of these grants right now which is a compelling reason to switch from being a renter to being an own homer, you know, So, again, reach out for affordability. Reach out to your broker to find out what grants potentially are available for.

00:07:02:24 - 00:07:17:33
[Chris] We've got the first home loan deposit scheme. We've got the first home bonus being that $10,000 or $30,000, we've got the stamp duty exemption as well. And yes, so there's lots of support for first borrowers. So Jackie when you're ready to buy a place, you know, the penthouse in Brissie, we're ready for you, okay?

00:07:17:43 - 00:07:32:51
[Jackie] I'm so close. I'm so close, Boothy! (Laughs) We’ll be celebrating that day. And so now to wrap up, besides Christmas catch-ups galore, what else is happening at Lydian HQ?

00:07:32:56 - 00:07:58:39
[Chris] It's been a really great year, to be honest. I mean, look, firstly, we've got some good people, Jackie, you included. So, you know, the team has grown, but we've got some of the key people like yourself. Jo Wynn, Rocksy, obviously, you know, we've kind of bootstrapped this thing together and we've done another year. So, you know, being three years old, I think we've kind of gone through the teenage years now and next year we're probably in that sort of, you know, coming out of university, being an adult and trying to figure our way.

00:07:58:39 - 00:08:20:11
[Chris] But, you know, on this journey, we've had some really you know, we've had some great brokers and got some great brokers in the team now. And I've really enjoyed sort of traveling around the country in the last couple of months. So, you know, Melbourne, Gold Coast to see Peachy (James Peach) as is just onboarded Melbourne. So we've got Joseph Lentini, we've got Deval Upadhyay, who's going fantastic down there, Pinakin Patel, we've got David Pfeiffer over in Adelaide now.

00:08:20:11 - 00:08:34:55
[Chris] He's going great. And we've got Talia Sykes who's recently joined us up in the Sunny Coast, but she's driving around in a camper van around Australia, but she's going great, servicing some of our partners now and she's a fresh new sort of female in the team. You know, obviously Brendan Jordan and Darren Bryant up in Brissie as well.

00:08:35:04 - 00:08:58:10
[Chris] We’ve talked about Peachy (James Peach) in the Gold Coast. We've got Jamie Gant over in WA, we've got David Steer, you know, he's solid and dependable. Tristan Cleggett is killing it. Angelo Pirrello, Umang Wani; we've got Christian Grima in the office here, and me... I’m going to apologize if I forgot anyone, but we've got a great team. It's been really good. The operations team in the Philippines, you know, Lydian operations, we've grown there as well.

00:08:58:10 - 00:09:17:07
[Chris] And those guys are, you know, they’re specialists now, which is I'm super, super proud of what they've been able to achieve in their sort of careers in such a short space of time. Yeah. So, you know, it's been a great finish to the year, really happy and in fact our lodgment last month were the biggest lodgements we've ever, ever done, you know. Don't want to boast about that because, you know, we want to improve on that.

00:09:17:07 - 00:09:34:51
[Chris] But it's great to see we're maturing and getting better. We're getting better at what we do. You know, clients are enjoying the service. We've got great brokers now and we just want to do more of this in 2024 as well. So a big thank you from me, Jackie, for your support. And Just Jackie and the partner videos and also helping me do Boothy’s Bites as well.

00:09:34:51 - 00:09:38:49
[Chris] But it's a team game, right? And a big kiss to Rocksy, too.

00:09:38:54 - 00:09:58:42
[Jackie] Thank you so much Boothy, and thank you for having me a part of it. If people watching this can't tell, Lydian is the absolute best and the team and the people and everything so thank you for building something so amazing. And Merry Christmas to you, Boothy! Happy New Year and Merry Christmas and happy New Year to everyone else.

00:09:58:42 - 00:10:05:04
[Jackie] So thank you so much for joining us. Thank you, Boothy! And I guess we’ll see everyone next year.

00:10:05:09 - 00:10:20:06
[Chris] Yeah, Merry Christmas everyone! And again, thank you to the partners. Without the partners as well, we couldn't do what we do as well. So Merry Christmas. Safe holidays for everyone. And we have a bigger and better, badder, meaner, fitter, and faster 2024. See you then. Go Lydian.

00:10:20:11 - 00:10:29:04
[Jackie] It sounds good. (Laughs). See ya!