As I am sure you aware by now, the RBA has cut interest rates by a further 0.25% to a new low of 0.75%. Whilst this is good news for borrowers, if you are one of the many millions of people who have their money tied up in savings accounts you should not be so happy!
Why is this?
Well when the RBA cuts interest rates, banks generally will lower rates paid on cash held in term deposit and savings accounts. This means that with interest rates being so low, savers like yourself are earning little to no interest on your hard earn savings. Currently at best, banks are offering 0.5-1.5% p.a on savings and Term Deposit accounts and often to achieve these rates you are forced to jump through many different hoops.
This is why I advise many of my clients to start looking for alternative opportunities, so they will gain more out of their hard-earned money.
A great option that many of my clients opt to take, is placing their money into one of the many first mortgages we arrange through MASU. Recently we have completed 3 first mortgages that have seen our clients receive very generous returns.
For example, we recently completed a first mortgage in Bellevue Hill in Sydney NSW at a valuation of $27 million, with a $14.8m loan at 10% over 6 months. One of our clients place $200,000 into the mortgage which saw him generate $10,000 in interest over the 6 months. By comparison if they had put that $200,000 into a savings account offering just 1.5%, they would have only seen a return of $1,500 over the same time period.
Whilst a $8,500 difference may not seem like a huge amount, over time as they keep investing the principle and interest earnings into more first mortgage this gains will compound and soon they will see tens of thousands of dollars in difference, hence why seeking alternative investment options during whilst rates are low is so important.
If this is of interest to you, please contact us to register your interest for future First Mortgages at email@example.com or reach us on +612 8297 6666.