Fairway HomeLoans

Delegate
There’s no reason why everyone in the house shouldn’t help out. Decide in advance whose job it is to wrap presents or set the table. If everyone knows what their task is, there will be fewer arguments. If you’re hosting Christmas dinner, ask guests to bring the starter and/or a salad or dessert, so you only have to tackle the main course. If you just can’t cope with cooking, organise to eat out.

Run away
Not spending the day with parents or relatives can be interpreted as not loving them enough, but if you really want to escape, don’t feel guilty: reassure them that you’ll see them before you go and when you get back. If you are separated from family and friends through work or distance, helping out in a shelter for the homeless or delivering meals for the elderly can be very rewarding when everything seems so commercial.

Lower your expectations
Don’t try to make Christmas perfect — it won’t be. Decide that you’ll be happy if you have a nice day with good food and a few laughs. If things end up better than you expected, that’s a bonus. Keep it simple — you don’t need to have a huge tree, design your own greeting cards, and bake your own mince pies. Settle for a big bunch of flowers, some scented candles and a sentimental favorite like Nat King Cole on the CD player.

Don’t Try to Please Everyone
If you’re hosting The Big Dinner, don’t expect to do it the way your mother or any other previous generation did it. That means if you grew up eating goose but always hated it, you can have a turkey, or ham, or whatever you want. It means if your father-in-law expects to have homemade Christmas pudding, you can tell them to either try the pumpkin pie or ask your mother-in-law to bring pudding. At my first Christmas dinner at my home, I put out Christmas crackers since I’d always seen them as a child and wanted my children to have them. My mother asked why I was using them, we’re not British, after all (even though I am actually one-eighth British, thank you very much). Do as you wish to make this memorable for your family, but be ready for sly (or not-so-sly) comments.

Drink in moderation
There is no doubt that many bottles will be opened this festive season. Whatever your taste is moderation is the big key. Before you arrive at your destination, eat a small meal of something healthy, as you may have to wait hours before eating. Between each drink make sure to hydrate by drinking a glass of water, and give your liver a chance by limiting yourself to one drink per hour.

Eating in moderation
With the holiday eating season upon us, there’s rich food wherever we turn, and the biggest fear is turning the scale a little further. Take control of what you eat this summer and deny the will to over eat
There are a few things that you can do to avoid the 1 maybe 5 extra kilos. Start by eating a healthy breakfast, not only will you feel better and have more energy all day, you won’t be inclined to overeat later on.
Once the dips and entrees start arriving , be sure to nibble on the fruit plates first, and remember not to fill your entire plate, there’s more food coming. The main course is where you should be choosing a smaller plate, and chew chew chew. Tasting the food before swallowing, not only helps digestion but also leaves us feeling more satisfied.

Have a safe and Merry Christmas and we hope to see you in the near future.

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From all the staff at Fairway HomeLoans we would like to wish you a very Merry Christmas, and a safe New Year. We look forward to talking to you in 2009.

Fairway HomeLoans office hours for this Christmas period will be as follows

Closed 20th December
Open 5th January 2009

Thank you for your continued support and for a terrific 2008.

Merry Christmas and a Happy New Year.

This is one example of the Banks Questions in regards to breaking a fixed loan

Paying out some or the entire loan earlier than the contracted term:
• You may have to pay an early termination fee or break cost and a fixed rate break administration fee if you pay out some or the entire loan earlier than the end of the agreed fixed period

How does the early termination fee work?
• The early termination fee covers the difference between the Bank’s funding rate (borrowing swap rate) for the agreed fixed term at the time your loan was disbursed and the rate that the bank is guaranteed to earn over the period remaining of the original fixed term (investing swap rate), at the time your loan is repaid in full.
How is it calculated?
• The fee is not calculated on the rate you pay under the contract. The early termination fee can change substantially on a daily basis due to constant changes in money market interest rates. If you pay out the loan early and the rate that the bank is guaranteed to earn is higher than the original funding rate, you may receive a benefit.
• The following approximate calculation can be made to determine the likely cost/benefit of terminating a fixed interest rate home loan, either in part or in full, earlier than the scheduled expiry date of the fixed rate period.
The following is a real example only and will vary day to day:
• The Bank lent a customer $470,000 at 7.8% for a term of three years from 10 February 2000 to 10 February 2003.
• To fund the loan the Bank borrowed these funds on the money market at 7.18%.
• The Bank would therefore have made a profit/margin of 0.62% over the period of the fixed
term.
• When the customer repaid the loan on 20 August 2001, the money market interest rate was 5.17%.
• The Bank therefore would have faced an interest loss of 2.01% on the balance of the loan over the remaining term (i.e., we still have to pay 7.18% but to re-lend to the money market we will only receive a margin over 5.17%).
• In this instance, the actual monetary loss amounted to $15,318.57, (to calculate roughly: $470,000 x 16 months x 2.01% = $15,110. The real calculation however uses days).
• However, we do receive a lump sum of $470,000 which we can reinvest so the penalty is adjusted to a present value (in this instance $14,674.20)
• A fixed rate break administration fee will also apply.
* The swap rates referred to in the examples (determined by “the Lender” based on prevailing market swap rates) are the rates used by “the Lender” to estimate the cost of providing the loan - not the rates at which loans are fixed.
EARLY TERMINATION FEE
The following approximate calculation can be made to determine the likely cost/benefit of terminating a fixed interest rate home loan, either in part or in full, earlier than the scheduled expiry date of the fixed rate period.
(A - B) x C x D = early termination fee cost / benefit to borrower

Example
A Borrowing swap rates (Original cost of funds) * 6.50% pa
B Investing swap rates (Rate at early termination date) *4.50% pa
C Remaining fixed period of loan 2 years
D Current loan principal $100,000
E Original fixed period of loan 5 years
(6.50%p.a. – 4.50% p.a.) x 2 x $100,000 = $4,000 early termination fee cost to borrower

English rates have fallen to their lowest level since 1939 as the Bank of England battles recession.

With a reduction of 100 basis points the official cash rate now sits at just two per cent.

The BoE said business surveys suggested the country’s downturn had gathered pace and commented that consumer spending, business investment and residential investment had all continued to stall.

The British central bank already slashed the cash rate by 150 basis points last month, and has now made reductions totalling 375 basis points since December last year.

Retail spending improved surprisingly in October, ABS data released yesterday revealed.

According to the figures, retail spending rose by 0.7 per cent seasonally adjusted in October compared to September to total $18.4 billion.

The slight improvement was likely the result of September and October’s combined 125 basis point interest rate cut and the substantial decrease in petrol prices.

The result has pushed annual retail spending growth to 2.2 per cent.

The Reserve Bank of Australia (RBA) has cut official interest rates by 100 basis points to the lowest level in six and a half years, amid signs of a significant moderation in domestic demand.

The central bank on Tuesday lowered the cash rate to 4.25 per cent, from 5.25 per cent, for the first time since May 7, 2002.

It is the fourth month in a row the RBA has cut interest rates in a bid to head off the impact of slower world economic growth on an already soft Australian economy.

The reduction was more than financial market economists had been expected. Most were looking for a 75 basis point reduction.

However, debt futures markets were more optimistic and had factored in a 100 basis point cut.

RBA governor Glenn Stevens said the bank’s board had judged that a further significant fall in the cash rate was warranted this month to create a more expansionary setting for the economy.

“As a result of today’s decision, the cash rate will be at its previous cyclical low point,” he said in a statement.

“Given trends in money market yields, most lending rates should fall significantly and will also reach below-average levels.”

Commonwealth Bank of Australia Ltd (CBA) and Westpac Banking Corp and National Australia Bank Ltd moved quickly to cut their variable home loan rates within minutes of the RBA move.

CBA and NAB each lowered their standard variable rates by 100 basis points.

Westpac cut its rate by 80 basis points.

MORE klm

“There has now been a major easing in monetary policy over the past few months,” Mr Stevens said.

“Together with the spending measures announced by the government, and a large fall in the Australian dollar exchange rate, significant policy stimulus will be supporting demand over the year ahead.

“The board will continue to monitor developments and make adjustments as needed to promote sustainable growth consistent with achieving the two to three per cent inflation target over time.”

Mr Steven said Australia’s inflation rate was likely to start to fall soon.

“Global disinflationary forces will assist in this regard, though the depreciation of the exchange rate means that the decline of inflation to the target could take longer than would otherwise have been the case,” he added.

Mr Stevens said the Australian economy had been more resilient than the economies of other countries, some of which had already fallen into recession.

But recent domestic economic data show a significant moderation in domestic demand is occurring.

“With confidence affected by the financial turbulence and a decline in the terms of trade now under way, more cautious behaviour by both households and businesses is likely to see private demand remain subdued in the near term,” Mr Stevens said.

“With that outlook, and with capacity pressures now easing, it is likely that inflation in Australia will soon start to fall.”

Mr Stevens also noted recent falls in global commodity prices and that financial market sentiment remained fragile.

Macquarie Group interest rate strategist Rory Robertson said the RBA had, with its latest cut, reversed some six years of monetary policy tightening in just four board meetings.

“The RBA has reversed some six years worth of monetary tightening - from 7.25 per cent - in just four board meetings over just three months,” he said.

Economists believe rates still have a way to fall, with some looking for a cash rate of 3.25 per cent next year.
(AAP klm)

Last month’s one per cent rate cut and the government’s tripling of the First Home Owners Grant in mid-October has hit the mark as new house sales leaped 6.7 per cent in October.

Victoria and Queensland saw the biggest impact where new house sales jumped more than 20 per cent in October.

The result saw an increase in new home sales among Australia’s largest builders and developers for the first time since June.

Activity in the multi-unit sector failed to spark, with sales down by more than 8 per cent, indicating that investors remain on the sidelines.

HIA’s New Home Sales Report showed a 4.5 per cent increase in total sales volumes in October 2008.

Detached house sales increased by 6.7 per cent and were responsible for the aggregate lift in sales. Multi-units sales dropped by 8.6 per cent in October and have now only risen in three out of the last ten months.

HIA Chief Economist, Harley Dale, hoped that an improvement in new home sales in October could mark the beginning of a stabilisation, however he warned “it will be a long road back”.