We’ve been saying for a long time (and now the RBA is finally agreeing with us), it doesn’t look like interest rates will be increasing any time soon.

So now we move into a new phase, where the banks are pre-emptively offering really low fixed rate products (around 3.65 to 3.99% depending on the loan term) which appears to be a good deaL… but are they really?

What happens when you come off the fixed loan period?

Low fixed rates are, generally speaking, an incentive to get customers to switch banks or loan products which at face value is fine however many people forget to consider a critical metric – the comparison rate. This is the average real rate that you’ll be paying after you come off the fixed rate (including fees), honeymoon period, etc, which is normally much higher than what you should be paying on a well discounted variable rate.

As former bank execs we know what you may not - which is that one of the banks most profitable 'products' is fixed rates whilst an added benefit is that it creates a sales opportunity to gain market share and lock customers down rendering them (largely) unable to switch banks.  The bank sales pitch for low rate fixed typically focus on helping customers / families to budget, keep costs down, and control their costs in an every changing world, etc.

The downside to locking in a fixed rate loan

If you lock in a fixed rate you’re generally paying a premium to do so; signing up for a loan with a higher comparison rate. The comparison rate which is the rate you pay after the fixed interest period, is far less competitive than it should be.  If you want to break your loan early (for any reason), then most banks charge a break fee that can be in the thousands of dollars and is very difficult to calculate. Whereas if you leave your loan on variable rates, this allows you to keep your options open and be in a position where you can seek the most competitive rates, anytime you like.

Whether fixed or variable rates are right for you depends on your life circumstances and financial situation.  If you’d like all of the options explained to you from someone who is impartial to a bank, contact us on
1300 76 40 30.

#homeloan #mortgage #fixedrate #rba #finance #mortgagebroker #realestate #property #experts #advice #strategy #lending #bankinginsider #thatcherfinance


Yesterday the ABC ran a story on CBA and mortgage broker commissions:


This is why the banks have a low trust score….
CBA’s CEO yesterday sold the story that if they were the first bank (of the big 4) to reduce brokers commissions they were worried about losing market share. What they didn’t say is that they’re working with the other big banks to deliberately reduce broker commissions, knowing that they are eliminating competition that will leave customers once again at the mercy of the major banks to negotiate their own loans.


Morgan Stanley research recently found that Westpac would report the largest profit increase if trail was removed (2.2 per cent), followed by Commonwealth Bank and ANZ (1.9 per cent) and NAB (1.3 per cent).

Brokers do come at a cost to banks however they’re significantly less than the cost of operating branches and come with the added benefit of loan applications being submitted by mortgage broking professionals that have higher levels of banking experience and year on year training and adhere to a higher level of compliance in many cases.

Morgan Stanley also found that broker upfront commission payments make up approximately 4.6 per cent of CBA’s overall costs, Westpac’s at 4 per cent, ANZ’s at 3.1 per cent and NAB’s at

 2.5 per cent. A tiny amount given that 55%! of all mortgages are now generated by brokers.

Any suggestions that reduced broker commissions will be returned to customers is laughable. The banks' agenda is as simple as it is obvious, say sorry for all the past sins, seek to reduce

 competition without brokers, and then double mortgage margins over the next five years resulting in a massive windfall to the major banks and their CEOs.

The fact is that all our clients get better advice, lower cost loan packages, and save thousands in the process without costing them one dollar. Because today we are paid a fully disclosed commission by all banks, which is the same amount so there is no conflict to recommend one bank over another, and we've never had one customer object. Yet this isn't the story the bank CEOs are selling the royal commission and the media.

If the banks are successful in reducing trailing commissions this could reduce the number of brokers in the industry and or wipe it out entirely leaving customers without any independent advice or choice of products.

Trusting the banks that they will reduce margins and improve service to customers because customer aren't using brokers and are going direct to them is like being time warped back into 1975 and hearing a CEO from a cigarette company telling kids that smoking is good for you and we all know how that ended...

Should you consider refinancing?


Loan repayments are THE single biggest expense for most families yet ironically most people feel like it's too hard to fix. The truth is, it isn’t!  That’s where we come in.

Your home loan repayments are no different to your utilities bill… if you don’t review your mortgage or investment loan every 12-24 months or so, it’s likely that there are better product options in the market that better suit your current lifestyle.  

Your loyalty to your lender could be costing you thousands of dollars each year. Refinancing could achieve a lower interest rate which can make for significant savings over the long term. For example, if you have an average $500,000 size home loan on an average variable rate of 4.30% p.a, you’re paying $2,466 a month on your home loan. If you refinanced that average home loan to a rate of 3.70% p.a, your monthly repayments would drop down to $2,294. That’s a saving of $172 per month. Over the course of 30 years, you’d save $46,500.

Here’s why we recommend reviewing your loans every 12-24 months:


You could achieve a lower interest rate than what you’re currently paying which over the course of a number of years, could make up the deposit on an investment property or fund a renovation.


Refinancing can give you access to equity that you can use to invest in other assets such as a new home, investment property, etc.  One of the key advantages to this is that you can purchase an item with the same interest rate as your home loan, rather than the higher interest rates charged on personal loans, car finance or credit cards.


Loans go through product developments just like any other product or new technology so there may be new features that can help you reduce your interest repayments such as additional repayments, portability and, offset accounts.


When you refinance with a broker you may benefit from waived application or establishment fees, ongoing fees, valuation fees and monthly fees.


There may be benefits to consolidating your debt by rolling your existing debts into a single, more manageable loan with a competitive interest rate.  This can result in reduced fees and interest repayments.  Our aim is to save you money wherever we can during the loan process.


Depending on your life stage, your requirements can vary widely when it comes to lending.  Our aim is to achieve a level of flexibility to give you the freedom to do what you want to do in life.

For life transforming advice, call us today on 1300 76 40 30.

Affording school fees

For some Australians the answer to how they're going to fund school fees is through scholarships!  Whilst this IS a great idea for a small percentage of the population, the rest of us need to plan how we’re going to fund our children’s education.

When we’re talking to our clients about how their finances are structured and their life goals – new home, new investment property, renovation, private education and a great lifestyle, the conversation inevitably turns to the affordability of school fees.

The cost of private school fees range between $150,000 to $350,000 per child based on the school that you decide to send your children to and how long then will attend. Some students will start in prep whereas many parents will aim to start their children in Year 5 or 7. Either way, it is a significant life expense and although we know the day is coming, many people do not plan adequately for it nor have a solution for how to finance it.   

Previously the head of the education sector for NAB and Westpac, Barry Thatcher who is now a director at Thatcher Finance, has it on good authority that the majority of schools increase their school fees on average by 5% per annum.  Therefore its essential to have a good funding structure in place when the costs of education are only set to increase.

Barry explains that, “Saving your money in a savings account or term deposit simply won’t cut it.  it’s not enough to cover rising school fees, increasing at almost twice the term deposit rate”.

Just the same, when you do receive that whopping invoice from the private school of your choice (trust us, we know all about it!), it makes good sense to understand the finance options available to you, whilst leveraging the lowest interest rates possible.

As parents it’s always a balancing act, between paying for school fees and still affording the extracurricular activities and holidays that go a long way to making happy memories with our kids (especially during those years where they’re still happy to spend quality time with us!). For advice on the better way to structure your finances and review your existing home and investment loans which may well save you money, please contact us.  Our services are complimentary to you and we will help you structure your finances so that you can manage the school fees and maintain your ideal lifestyle too.

Why is it getting harder to secure finance?

No one ever talks about the challenges of securing the finance for your new home, renovation or property investment.  With the value of land continually on the rise, we mostly hear the good news stories… I bought a house and doubled or tripled my money over a number of years….

No-one talks about the problems they had applying for a loan, the number of banks they had to approach before their loan application was approved, how the whole process was painful or that the loan they accepted was more expensive than what they really wanted to accept but were backed into a corner with timing. If this has been you in the past, you’re not alone.

The truth is that it’s not just you, and that dealing with banks is just getting harder and harder. Bank TV advertisements depicting helpful, knowledgeable, and concerned Branch managers acting in your best interests can be a far cry from the reality.

There has been a huge amount of mortgage growth in recent years, and banks are looking to restrict your access to finance.  To control and limit this growth, the banks have used regulator announcements as an opportunity to increase interest rates (margins) ‘out of cycle with the RBA’ on most home and investment loans.  They’ve also made their assessment criteria more rigorous, making it much harder for people to get into the market. Regardless of whether you are a home buyer or wanting to buy an investment property for the first or second time the process of securing finance is becoming more challenging.

The fundamental difference between working with Thatcher Finance and using a bank is that we work for you and not the banks. Our aim is to explain all of your options and educate you on what’s achievable so that you can make an informed decision about which bank and loan is right for you, versus the banks which only offer their own products to you.  They can’t offer you market wide choice and often lack the depth of experience to really educate you about your finance options.

Thatcher Finance will prepare a comprehensive finance application as opposed to the banks who make their decision based on the information that you provide.  Even if this information is inadequate, this is what their decisions are based on.  For some people this results in their application being declined with little or no feedback provided.

So here’s are our recommendations for putting your best foot forward. And don’t worry if this seems all too hard, because we are here to help you, if you need it;

Get organised! 

Have your tax file numbers, proof of income, banks statements and expense and or credit card statements in order.

Know your expenses

All your expenses are taken into account when applying for a loan, people are sometimes shocked and even a little embarrassed when they really understand how much they are spending. Don’t worry… you can use the process of applying for a loan to get your house in order which may include reducing and consolidating expensive credit cards or loans.

 Know your borrowing capacity

Never assume or risk that a loan will be approved by the bank. Instead find out well in advance of buying an asset if you can get the financed needed. Sounds simple, but this is a very common mistake people make which puts them at risk of losing their deposit.

Have Equity in your corner

If you have other assets such as property or a business, make sure that you have a current valuation so you know what your real position is before committing to a new acquisition. 

At Thatcher Finance we provide advice to you based on your personal situation and future plans. We explain the best way to structure your finances so that you have flexibility and have a plan in place to grow your property portfolio whether you are a first time home buyer or experienced investor. We are not aligned with any bank and our services are free to you.

Thatcher Finance is offering a Complimentary Property Valuation until October 30, 2017 for clients wanting to review their finances.  Call us on 1300 76 40 30 today. 

TO FIX OR NOT TO FIX? If you're wondering whether to fix your loan, here are the key points to consider

Our economy isn't shooting the lights out, so why would the Reserve Bank want to increase rates in the next two years? If anything, it's likely to be steady as she goes, with an outside chance of another rate drop. We attended a Big Four-Bank economics update two weeks ago, which advised the same sentiment. However, despite this advice the banking market are increasing fixed mortgage rates. Why?

One of the Banks most profitable 'products' is fixed rates, and they love to sell the story that they know best and that we should trust them. As a customer if you fix rates you are generally paying a premium to do so.  If you ever need to break your fixed rate loan early, most banks charge an unfriendly break fee, sometimes in the thousands of dollars. If you leave your loan on variable rates, this allows you to keep your options open and in a position where you can seek the most competitive rates, anytime you like.

Banks and financiers are currently trying to increase all borrowing rates with various 'out of cycle' rate increases. Why? Because ultimately Banks report to their shareholders and so to achieve continual revenue growth in a market where the general system growth isn't increasing, they need to increase margins from their existing products and customer base. In a constant cycle where Banks feel compelled to announce record profits each year, a false economy has been created and as a customer you may be paying for it.

Whether fixed or variable rates are right for you depends on your life circumstances and financial situation.  If you’d like all of the options explained to you, contact us for an appointment on 1300 76 40 30.

Finance Brokers are key to building your property portfolio

Most of our clients understand that sometimes the process of securing finance can be painful and time consuming, which is why they appreciate working with us!  As our clients quickly discover, when acquiring new properties, the benefits of working with a finance broker far outweigh approaching the banks directly and here's why:

We know our clients and we're your advocate

We work closely with our clients so we develop a deep knowledge about their lifestyle and business plans, acting on your behalf.  We see ourselves as your partner and take a holistic view so we offer better, bespoke solutions. 

Expert Advice

With more than 50 years collective industry experience across our three principals, you’re able to access independent advice across a range of banking and finance products that you might not otherwise consider.  There are many steps in the loan process and we’ll provide advice at each step along the way.


We never look at a finance application in isolation.  We’ll make sure that you have a strategy in place for the short, medium and long term, which will allow you the flexibility to grow your assets and wealth over time.

We'll do the legwork

We act on your behalf, effectively tendering out your finance requirements to achieve better outcomes than you might otherwise be able to achieve by going directly to a bank. The more competitive tension there is for your application, the better outcome we’re going to achieve for you.

Saves time and energy

Anyone that has researched finance options or applied for finance will tell you that it can be a tiresome and frustrating process, potentially costing you time and money.  We’ll manage the loan process for you making sure that you secure competitive rates and that the process takes place in a timely manner.

We are always here to help

We proactively maintain regular contact with you to review progress over time and ensure your strategy is always current, relevant and on-track to meet your goals for the long term.

No cost to you

Our advice and services come at no cost to you so if you’re looking for a better finance solution, call us today on 1300 76 40 30

Fixed rates are good for banks, but maybe not for customers

Fixed rates are good for banks, but maybe not for customers

Great article from Duncan Hughes at the AFR which discusses why banks want to lock customers into with fixed rates. However, what the AFR’s story stops short of saying are the following key points all consumers should know. I will also disclose up front that I'm generally not a fan of fixed rates.

There are often better variable rates available with the right knowledge and negotiation.

Fixed rate loans are one of the banks most profitable products because the rate is generally higher than the variable rate.

Two to five years is a long time in anyone's life and a lot can change. New house, new job, change in relationships, etc. Many customers believe that they’re saving money when they lock in a fixed rate. However, they may be hit with very hefty break fees and penalties (in the thousands), when they need to break their loan during the fixed rate period as a result of one of these life changes. 

Avoiding risk and possible interest rate increases is the sales pitch, but really the main aim of fixed rates is to lock customers in so that they can’t switch!

Nearly all customers we see that have had fixed rates wish they hadn't because they’ve either paid a premium for the fixed rate, or they have incurred a break cost to get out of the fixed rate contract.

I recently attended a Bank economics session that predicted rates would continue to fall by possibly another 0.50% in the short term. Immediately afterwards they recommended customers attending should consider locking in rates now. Umm...?

The simple fact is that rarely do fixed rates present better value than what can be negotiated with variable rates, because any fixed rate you're offered has margin built in to hedge the banks future risk. The irony here is that customers wanting to avoid risk by using a fixed rate, may actually be placing themselves into a more risky position and open to higher costs later on.

Check out the AFR article here:

At Thatcher Finance we are specialist finance advisors and mortgage brokers for professionals, investors and businesses owners. Our sole focus is to educate our clients first and then work to get the optimum finance package for residential, investment or business lending.

So if you need good advice and an expert in your corner, don't wait any longer, it's most probably costing you money. 

Call us to today to arrange an appointment now on 1300 76 40 30.  It could be the best meeting you've had this year!

Top Five Tips for Business Success

We recently presented at a conference for Pharmacy Professionals and like many business owners, they wanted to know what they could do to improve and grow their business. 

We take the view that you need to look at your business holistically which means considering innovation, staff, risk, finances, and performance indicators.

Our top five tips for running a successful business and ultimately growing personal wealth are as follows:

1.  Innovation:  Challenge the status quo.  There are always new products and ways of approaching business and your own personal financial situation.  You may just find that new technology, finance and insurance arrangements are all areas where you can improve your business performance and mitigate risk.

2.  Establish your top three indicators:  Work out the top three pieces of information that you need to know off the top of your head that indicates how your business is going.  This may be sales figures, cash flow and staff costs for example.  If there’s a dramatic change to any of these, you can address it quickly.

3.  Keep your staff happy and motivated: It’s so important to have fun at work and it’s great for productivity too. Happy and motivated staff adds to the top and bottom line of your business and can help to solve little problems before they become big problems.

4.  Protect your business:  As a business owner you’re also exposed to certain risks.  A catastrophic event, a legal matter or health issue can put everything you’ve worked for, in jeopardy.  Make sure that you’re adequately protected which will give you peace of mind and allow you to concentrate on running a successful business!

5.  Review your finances. Debt can be a shackle to some and others a useful tool to increase wealth. Don’t wait for your bank to suggest how to use it as a proactive tool. You need to regularly review your debt and avoid entanglements so that you can make the most of business and personal opportunities.

Call us today to review and compare your finance and insurance arrangements on 1300 76 40 30.

What do the RBA cuts mean for you?

Is fixing rates good or bad? The RBA has just cut interest rates and many of the banks chief economists are forecasting future cuts to the cash rate. So why do banks want to lock their clients into fixed rate loans? 

Don't be locked in to fixed interest rate loans without seeking expert advice. This seemingly simple decision could potentially cost you thousands. As a brokerage with experienced staff and extensive industry knowledge gained from working at some of Australia’s leading banks, we offer our clients insightful advice and a range of effective options.

The banks are competing for new customers at the moment and offering good incentives to win your business. Don't procrastinate any longer!  Book an appointment with us ASAP to review and compare your finance arrangements on 1300 76 40 30.