The Lydian Financial Podcast

In this episode of Boothy's Bites, we're celebrating a major achievement as Lydian takes home the Best Independent Office Award at the SFG National Conference. We also break down the latest property market trends, explore updates from the RBA, and share exciting news about Lydian's growing broker team and partnerships across Australia. Listen on for insights, highlights, and what's next as we look ahead to a promising 2025! 𝐅𝐨𝐥𝐥𝐨𝐰 𝐮𝐬 Website: https://www.lydian.com.au Facebook: https://www.facebook.com/www.lydian.com.au Instagram: https://www.instagram.com/lydianfinancialservices/ LinkedIn: https://www.linkedin.com/company/lydian-financial-services 𝐁𝐨𝐨𝐤 𝐀 𝐂𝐚𝐥𝐥 𝐖𝐢𝐭𝐡 𝐎𝐮𝐫 𝐁𝐫𝐨𝐤𝐞𝐫𝐬 https://calendly.com/lydian-1/chris-booth?month=2022-07&date=2022-07-29

In this episode, Chris Booth shares insights into Australia's current financial landscape with Jackie Bowker. Join us as we explore inflation trends, the Reserve Bank's recent movements, and unique lending options for first-time homebuyers. Chris also discusses standout interest rates from top banks, opportunities for first-time buyers, and what's on the horizon for the property market. Plus, a special shout-out to our incredible team in Cebu, Philippines for their recent community contributions. Tune in for all the latest updates and advice to stay ahead in today's market! 𝐅𝐨𝐥𝐥𝐨𝐰 𝐮𝐬 Website: https://www.lydian.com.au Facebook: https://www.facebook.com/www.lydian.com.au Instagram: https://www.instagram.com/lydianfinancialservices/ LinkedIn: https://www.linkedin.com/company/lydian-financial-services 𝐁𝐨𝐨𝐤 𝐀 𝐂𝐚𝐥𝐥 𝐖𝐢𝐭𝐡 𝐎𝐮𝐫 𝐁𝐫𝐨𝐤𝐞𝐫𝐬 https://calendly.com/lydian-1/chris-booth?month=2022-07&date=2022-07-29

In this episode, Chris and Jackie discuss the latest economic trends, focusing on the RBA's efforts to manage inflation, energy prices, and GDP growth figures. They also cover exciting lending updates, including competitive rates from some banks, and even new fixed-rate options. Plus, take a peek at VBP's Client Conference in Cebu and see how Chris and Jackie's visit went! 𝐅𝐨𝐥𝐥𝐨𝐰 𝐮𝐬 Website: https://www.lydian.com.au Facebook: https://www.facebook.com/www.lydian.com.au Instagram: https://www.instagram.com/lydianfinancialservices/ LinkedIn: https://www.linkedin.com/company/lydian-financial-services 𝐁𝐨𝐨𝐤 𝐀 𝐂𝐚𝐥𝐥 𝐖𝐢𝐭𝐡 𝐎𝐮𝐫 𝐁𝐫𝐨𝐤𝐞𝐫𝐬 https://calendly.com/lydian-1/chris-booth?month=2022-07&date=2022-07-29

𝐅𝐨𝐥𝐥𝐨𝐰 𝐮𝐬 Website: https://www.lydian.com.au Facebook: https://www.facebook.com/www.lydian.com.au Instagram: https://www.instagram.com/lydianfinancialservices/ LinkedIn: https://www.linkedin.com/company/lydian-financial-services 𝐖𝐚𝐭𝐜𝐡 𝐨𝐧 𝐘𝐨𝐮𝐓𝐮𝐛𝐞: https://youtu.be/x2bfRTQ9HRY

Follow us:

• Website: https://www.lydian.com.au
• Facebook: https://www.facebook.com/www.lydian.com.au
• LinkedIn: https://www.linkedin.com/company/lydian-financial-services/?viewAsMember=true
• Instagram: https://www.instagram.com/lydianfinancialservices/
• Watch on YouTube: https://youtu.be/yCWe1hh4Yf4

00:00:00:00 - 00:00:06:31 [Jackie] Hi everyone, and welcome to Boothy's Bites, the monthly update with the man himself, Mr. Chris Booth. How are you today?

00:00:06:32 - 00:00:14:12 [Chris] Good, Jackie. Good. Really good. It's a bit of a wet and miserable May a bit of a mouthful trying to get it out.

00:00:14:16 - 00:00:17:22 [Jackie] You have to come out to Queensland. It's beautiful here. Sunny.

00:00:17:27 - 00:00:20:08 [Chris] Okay. That's an invite. Okay. I'm coming.

00:00:20:13 - 00:00:25:34 [Jackie] Everyone come up to Queensland. No, don't. Don't. You know, property prices, don't.

00:00:25:39 - 00:00:30:46 [Jackie] Well anyway, let's get straight into it. So I'd love to hear the latest news from the RBA.

00:00:30:46 - 00:00:47:55 [Chris] Okay, cool. Well, it's been one of those funny months really. And for me, I'm all about I don't like the media. I think now they just did it to sort of sell a newspaper, which I'm sure that's what they've got to do. Right. So I think what we've actually had is this sort of situation whereby that having a chance at a headline is big news, right?

00:00:48:00 - 00:01:06:27 [Chris] And the inflation data came through for the first quarter this year, and it was a bit of a blip. Yeah. So we've got extra cost associated with fuel. Some services I think schools have gone up. I mean everyone's feeling the pinch. So the trend of inflation sort of coming down in line with the RBA's plans was it was a bit sort of off in that report.

00:01:06:27 - 00:01:21:57 [Chris] So a lot of economists are coming out now. Go. No, no way, no way interest rates are going to go up. Well, you know, it was good to hear Michelle talk about, you know, her thoughts around it. I thought she was really sort of strong and firm and fair and saying look you know long term the trend is still going in the right direction.

00:01:22:08 - 00:01:37:13 [Chris] And we feel that is where inflation is going. You know, it's going to go back to, to the, the norm over the next one a year and a half. But there's still lots of work to be done, which is you know, I think that's that's a fair reflection. So you know, the good thing for me is, is that, you know, she was pretty, pretty strong in her message.

00:01:37:13 - 00:01:53:40 [Chris] It's still business as usual, you know, don't think we're going to see an interest rate increase or decrease very shortly. She wants to see that inflation it's still the same message. And what that means really for me is that the the biggest or most important piece of data we're seeing in the next few months is going to be the next quarter.

00:01:53:40 - 00:02:09:21 [Chris] CPI, which is in there. I think the data comes out at the end of July. So that ties in really with the August decision. And I think that will be, you know, a real pivotal sort of point for the RBA giving direction to markets about, you know, interest rates going up, down or sideways for the next period. So it was a good one.

00:02:09:21 - 00:02:14:30 [Chris] So that's my forecast. No change this month, no change next month. And then a big meeting in August.

00:02:14:34 - 00:02:19:39 [Jackie] And what about your predictions for the handing down of the budget on the 14th of May?

00:02:19:48 - 00:02:35:34 [Chris] Yeah it was Albanese government been quite open about, you know, trying to commit to the tax cuts which they made when they came into sort of power and beyond. So, you know, it seems as though those tax cuts are going to come into effect, which is going to give some cash back to, you know, mums and dads, borrowers and which is a good thing.

00:02:35:34 - 00:02:50:11 [Chris] Right? It's always interesting when you've got, you know, this give back of cash, which is, you know, the fiscal policy or the, you know, the budget, which is kind of it's a bit of a bit of friction against the monetary policy because they're trying to stop people spending and creating inflation, but the government giving a bit of money back.

00:02:50:11 - 00:03:05:11 [Chris] So we're kind of not working together as well as they could, which is cool to be honest. I think the budget will be quite. I think it will let you know headlines for sure. These tax cuts are already expected and sort of locked in for July, but the tax cuts aren't massive, so it's really not going to inject a whole heap of money into the system.

00:03:05:11 - 00:03:11:49 [Chris] So again you know we've got some headlines around the budget. Yeah we're going to expect some cuts. But I think it would just be a little bit less noisy post you know.

00:03:11:58 - 00:03:15:41 [Jackie] Yeah. Yeah. Nice. And so what are the banks up to with their interest rates?

00:03:15:50 - 00:03:33:41 [Chris] Well that's the interesting one right. So that's more fun. So these dirty banks, all they're talking about these days is giving money back to shareholders. Okay. Now for me, when I was a young boy, you know, banks were there to offer a social service and a value to the, you know, their deposit holders and their borrowers, you know.

00:03:33:41 - 00:03:56:49 [Chris] Right. And they've lost that connect with, I think, the social side of things. Secondly mortgage brokers naughty naughty because we're giving so much good service to our clients. More clients are using a mortgage broker than ever before. I think we said last month it was over 70%, which is really cool. And what the banks are saying is, hey, hey brokers, if you guys want to use brokers, well, that's taking money from, you know, us making $20 billion worth of profit this year as a bank.

00:03:56:51 - 00:04:13:35 [Chris] That's not fair. Well, what I say to the banks is if they get their act together, stop providing better advice, have a bit more of a social conscience, and more clients will come and engage them directly, rather than coming through a trusted partnership with a broker. So they're complaining about their net interest margin in their profits, which I think is great.

00:04:13:35 - 00:04:28:55 [Chris] So but the good thing about their profits, they're going down. More money is being spent paying the brokers for the great work that they do for their clients. So the engagement with the broker is way better. So, you know, firstly, I just want to thank the banks for supporting the broker business and paying us the money that we deserve.

00:04:29:00 - 00:04:47:24 [Chris] And secondly, thanks for the clients for supporting the mortgage brokers. And yeah, using our advice and services. So yeah, bit of a naughty one for the banks. What that means for interest rates though is the banks are trying to claw back a little bit of the interest costs associated with some of these loans. So they're attracting new to bank money with cheap discounted rates.

00:04:47:29 - 00:04:58:59 [Chris] But then once you're in the system they sort of increase those interest rates slightly to claw back a bit of margin. So yeah. So watch those games. So what I would say is don't trust the banks. Come see your broker.

00:04:59:04 - 00:05:09:04 [Jackie] Yeah. We could make that into a song.

00:05:09:09 - 00:05:13:35 [Chris] And so do you want any favorite lenders at the moment for borrowers we've got.

00:05:13:35 - 00:05:33:28 [Chris] Yeah. So really nicely this week we've been introduced to Bendigo Bank. So Bendigo Bank they've had Adelaide Bank for many many years. And from a broker perspective we've been sort of limited to the Adelaide Bank platform and lending, which has not been bad. Right. But certainly it's now great to have Bendigo Bank as a sort of a national business on our panel, and they've got some really good rates.

00:05:33:28 - 00:05:53:36 [Chris] They've got a really strong community banking service, well supported with branch networks, good technology and infrastructure, and their interest rates are extremely competitive and their products are fantastic as well. So we met with the lady corporates the day she's launched the Bendigo service and Bank bank to us, which is which is really exciting. That's good for our clients as well.

00:05:53:36 - 00:06:10:35 [Chris] And we've already got some applications for clients going there who were looking to save some money. I think, you know, right now the every client that we're speaking to is really conscious about the interest rate, because obviously that dictates, you know, the cost of the loan product. Now if you're a strong borrower. I mean, like got good income and a low loan to value ratio.

00:06:10:35 - 00:06:27:43 [Chris] So your loan, you know, let's say it's $1 million and you've got like $500,000 loan against $1 million home. That's 50% loan to value ratio. That's a low risk for the banks. So they're being attracted by extremely low interest rates. And we're seeing that, you know, with many of the lenders now having this tiered pricing system to discount those rates.

00:06:27:48 - 00:06:51:14 [Chris] So there's a massive promotion on, you know, trying to check these good quality clients to to banks. But not everyone sort of meets and hits those benchmarks and hurdles to get into those lenders. So a bit of education from us is, is around the change of the credit policies that the banks are using to assess loans. So, you know, from a borrower perspective, you know, when we first talk, we're always talking about, you know, best rates.

00:06:51:28 - 00:07:06:45 [Chris] But then what we're doing then is overlaying, you know, what the most appropriate lender is in terms of their personal situation, which takes a little bit more conversation. So sometimes you don't get the best rate. But we're going to try find the best rate for you with the most appropriate lender. I think that's sort of what we're working with right now.

00:07:06:59 - 00:07:32:31 [Chris] And in fact, in my mortgage broking history, I don't think we've ever had to reach out to so many different lenders to provide these solutions for clients as we do today. You know, we have a panel of over 60 residential lenders. In the old days, we probably stick with, you know, maybe you top five. But right now, you know, I know our operations team are probably working with you know, 20 or 30 different lenders at any one time, which is, you know, a lot of paperwork, a lot of different systems and a lot of different ways to do things.

00:07:32:31 - 00:07:34:17 [Chris] So, yeah, it's pretty interesting right now.

00:07:34:17 - 00:07:43:59 [Jackie] Yeah, yeah. Shout out to our ops team. They're amazing. Exactly. And lastly, what are some trends you're seeing at the moment with refinancing and first home buyers.

00:07:44:04 - 00:08:08:07 [Chris] So there's two things I think again you know going back to that cost of living and things. We're doing a lot of work around cash flow budgeting. So especially interest only maturities and fixed rate maturities. So we've still got lots of clients coming off those 2% interest rates from 2 or 3 years ago, which is, you know, trying to have those conversations with clients where their interest rates now are over 4% more than they were before, and then resetting that budget again, that's a real challenge.

00:08:08:07 - 00:08:27:55 [Chris] So that's a bit of work we're doing. The second part is working with investors to make sure that their interest only repayments are being made in line with, you know, that negative gearing benefits. So they get to sort of manage cash flow better. And that's an interesting one because a lot of clients, when they're actually applying for these interest only extensions, they may not sort of qualify back with their original lender.

00:08:27:55 - 00:08:49:28 [Chris] So again, we're looking to work with their original lender to re extend interest only. But often because interest rates have changed so significantly, we might have to look at alternative lenders who are more supportive of investors than the existing lenders. So that's you know, again it's an education process and things. And then lastly we have a massive amount of young people and young families trying to buy their first home.

00:08:49:28 - 00:09:08:24 [Chris] I mean, our pre-approval legit is is huge. And again, I'm not not seeing this in a long, long time. And that pent up demand is really, you know, first home buyers and upside first home buyers. Crazily. It's like, you know, 40 year old young families as well. You know, that first home buyers looking to buy their, you know, one $1.5 million, $2 million property, well, they're still first time buyers.

00:09:08:34 - 00:09:26:26 [Chris] It just happens to be they're buying at 40 and it's a $2 million property. Right. Which is pretty crazy. But nonetheless it's a really tough market for those clients. So the conversations we're having a twofold number one, you know, what is your affordability and borrowing capacity. And also what are the lenders doing with regards, you know affordability as well.

00:09:26:31 - 00:09:47:42 [Chris] And yeah that means some clients are just, you know, really want to borrow the maximum that they can. And it just means that we're no longer working with like you know, the main bankers because there's more flexibility with some of these second lenders. You've got more favorable terms to borrow. Like and I'm talking about clients now who have bonuses, commissions, overtimes, all of that sort of alternate income outside of base income as well.

00:09:47:42 - 00:10:07:07 [Chris] So so again, you know, we're doing a lot of work with these first home borrowers educating, talking about, you know, their borrowing capacity, obviously always looking for best rates. But it is a real hot property market right now in that sort of 1 to $1.5 million price point. And also, you know, we start to see people coming back into the market from an investment perspective now.

00:10:07:12 - 00:10:13:57 [Chris] And their price point is in that sort of high sort of, you know, up to $1 million, you know. So again, that space is pretty crazy.

00:10:14:02 - 00:10:16:40 [Chris] Yeah. My gosh, I have to wait and see what happens.

00:10:16:40 - 00:10:21:06 [Chris] Yeah, I think so. Yeah. But yeah. So working with your first home buyers, which is, which is been fun.

00:10:21:10 - 00:10:29:31 [Jackie] Yeah. Well that is everything I have for these guys on this. Ruby has anything else to add himself?

00:10:29:36 - 00:10:42:59 [Chris] I just want to have a big shout out. And you just mentioned it before, Jackie. You know I'm broke when we've got some wonderful mortgage, right? Because there's no doubt about it. And they the ones that get the accolades, you know, the Google reviews and the shout outs and things like that, which is really cool because they deserve it.

00:10:42:59 - 00:11:00:00 [Chris] Right? Often the people that are called out in our business is our operations team, and we've got a wonderful team. It's a growing team. They're based over in the Philippines, powered up by our business partners virtual, also a vital business partners. They've just changed their name too. So for me a big shout out today has to go to the operations team.

00:11:00:00 - 00:11:21:24 [Chris] They're working so hard. Like I said before they have to know all of these credit policies, paper processes, procedures, pricing forms for our clients to, you know, launch these applications. And they do a lot of work for the brokers. So the Friday shout out and through these bites, my addition goes to the powerhouse that's leading operations and our marketing team as well, whom.

00:11:21:28 - 00:11:23:10 [Jackie] We go, team!

00:11:23:15 - 00:11:26:55 [Chris] Over and out. There you go. Drop the mic.

00:11:27:00 - 00:11:31:16 [Jackie] Well Boothy, thank you so much for your time, your knowledge, your expertise. And we'll see you next.

00:11:31:28 - 00:11:43:00 [Chris] Jackie, just before we go, but do you have a finance song we can share? I think it would it would add value to business, but if you could do it, do you.

00:11:43:04 - 00:11:45:01 [Jackie] Do you really want me to sing it?

00:11:45:15 - 00:11:47:51 [Chris] They will. It will pick up my followers.

00:11:47:56 - 00:12:05:48 [Jackie] Okay, okay. I just need to give a bit of a backstory, though I did not create this song. It has gone viral on TikTok, and I posted on my Instagram that it's been stuck in my head for the past week, so I'm going to sing it for you all.

00:12:15:49 - 00:12:17:58 [Chris] See you, Jackie!

00:12:18:03 - 00:12:24:53 [Jackie] Thanks, Boothy! Bye.

Follow us:

• Website: https://www.lydian.com.au
• Facebook: https://www.facebook.com/www.lydian.com.au
• LinkedIn: https://www.linkedin.com/company/lydian-financial-services/?viewAsMember=true
• Instagram: https://www.instagram.com/lydianfinancialservices/
• Watch on YouTube: https://youtu.be/HVjMkIQJIpk

00:00:00:00 - 00:00:08:51 [Jackie] Hi everyone, and welcome to Boothy's Bites for April. Of course, we can't do this without the man himself, so. Hi Boothy, how are you? How was your Easter break?

00:00:08:56 - 00:00:29:00 [Chris] Oh, I just told you that. I said it wasn't very good. Jackie and I have been talking about the emotional connection to technology. And sadly, on the Thursday before the Easter break, Jackie, my computer wouldn't want to start. obviously we've been I've been pushing her too hard and that was it. So she packed up for me. So no shops open on Friday.

00:00:29:04 - 00:00:47:51 [Chris] Having said that, I did manage to go sailing on Saturday and Sunday, which was wonderful. I probably stressed out a little bit about going shopping on the Monday, but I managed to buy myself a new little baby on the Monday. So I'm back in operations right now. But yeah, ready to roll. And tell us about your technology mishap as well, because there's a story there too.

00:00:48:00 - 00:01:05:18 [Jackie] So before we started filming this, I was telling me about, my phone. I smashed the screen last night, and then I went to use it for something to work this morning. And I completely forgot. But then when I actually went to use it, I could read through the cracks too. So we were saying, that's the meaning of life, right?

00:01:05:29 - 00:01:07:25 [Jackie] You got to read through the cracks.

00:01:07:30 - 00:01:21:32 [Chris] You just got to keep going forwards. Forge ahead, read through the cracks. Nothing's perfect. Right? So anyway, But yeah, having said that, welcome to...is this a March or April? I think we're kind of wrapping up March, but we're definitely in April now. So autumn's here.

00:01:21:41 - 00:01:32:16 [Jackie] Yeah. Sure is. Anyway, on with the show. So I would love to hear your thoughts on why you think it's better to go to a lending advisor rather than a bank for advice.

00:01:32:16 - 00:02:08:09 [Chris] Yeah. So, I mean, the statistics came out last week from the MFAA, which is our mortgage broking association, and 71.8% of home loans and investment home loan. I've been written by mortgage brokers. I think it's in the last quarter, which is a huge, huge number. Right. And I do feel, you know, that the I suppose, the justification of of people reaching out to a lending adviser or a mortgage broker instead of going direct to bank is, you know, this advice that people get from speaking to a professional who's been in industry for a long, long time, been doing this, this, you know, providing this service to clients and also with these relationships in part...

00:02:08:09 - 00:02:26:00 [Chris] ...has, you know, is part of that wealth creation journey with that client as well. So, you know, for me, when we're talking about why use a lending adviser or a mortgage broker, it's a not go direct to the bank. Well, really what you're doing is you're separating the, you know, the product, which is the bank and the advice piece.

00:02:26:00 - 00:02:49:21 [Chris] Now, obviously we need the banks to fulfill, you know, the lending and provide the debt to purchase a property or do what we're doing. But the advice component there is is far more important. You know, the, you know, the way to structure your debt, the extra sort of products and services which are attached to a loan, and how to utilize those features and benefits of a loan are very important as well.

00:02:49:21 - 00:03:07:48 [Chris] Also, you know, mapping out what a long term plan around debt and properties as well. Obviously, you know, buying a property, you've got this immediate need for some cash, but, you know, one of the long term plans outside of that and speaking to a professional is who can give you that counsel, guidance and advice in accordance with your sort of, you know, your whole deal team as well.

00:03:07:48 - 00:03:28:24 [Chris] You know, working with an accountant, working with a financial planner, working with the solicitor as well, having that sort of that advice team, I think really is invaluable. So 71.8% is a statistic which I'm pretty proud of, you know. So well done mortgage brokers lending advisers out there for that number. But you know, I think we we genuinely do a lot a lot more than just provide a product and loan.

00:03:28:24 - 00:03:30:30 [Chris] So, you know, kudos to the industry for where we're at.

00:03:30:30 - 00:03:36:15 [Jackie] Yeah! Go, us, go! Woo!

00:03:36:19 - 00:03:40:15 [Jackie] And so what's the latest from the reserve Bank of Australia?

00:03:40:15 - 00:04:00:36 [Chris] So I think, you know, it's been a bit sort of boring as it were, just over the last few months. We've really had that focus on inflation for quite a while. And it's interesting I spoke I sent a message this morning, you know, from December 2022 we've come down from 8.4% inflation, which was crazy to that sort of exit out of Covid, down to this soaring firm 3.4% today.

00:04:00:41 - 00:04:19:58 [Chris] And really it's taken us this long to to reopen many of the sort of the chains of service across the nation, across the globe to get this inflation down. There's still some bottlenecks around, you know, and things with these products and services. Hence, you know, a bit frustrating that hasn't got back down below the 3% band right now.

00:04:20:02 - 00:04:38:26 [Chris] But certainly momentum is in our favor. So this inflation side of things is really kind of a wait and see. Hence sort of the boring rhetoric from the reserve Bank right now, but 3.4% with the momentum with us, I do believe that we will be in within this two and 3 to 3% band that the RBA needs to be in in the next sort of quarter.

00:04:38:31 - 00:05:02:27 [Chris] And what that means then, is really that the RBA then has a luxury to start thinking about other things which are affecting the economy. And the biggest impact to our economy now is certainly this slowdown in growth. So, you know, when we slowing growth, the way to sort of improve that slightly is to potentially reduce interest rates. Hence, some of the forecast for interest rates is that, you know, we'll see a cash rate cut over the next sort of six months as well.

00:05:02:27 - 00:05:22:24 [Chris] So again, it's a wait and see. I mean, interestingly, the interbank markets have changed their interest rates. So they're trading at lower interest rates. So the one year government treasury bond is down at sort of 4%, 4.05%, which is actually already captured in that sort of rate cut potentially over the next six months as well. So you know, so the RBA is a little bit boring.

00:05:22:24 - 00:05:37:19 [Chris] But I think now we we need to focus on what the other impacting factors on economy are and growth in particular. And I think that will give us a new sort of new indications around, you know, what the RBA does next with interest rates. Yeah. So so the long winded explanation.

00:05:37:26 - 00:05:43:12 [Jackie] No, I love it. Hopefully we are at that turning point. But sitting at a lot to that indicator. that's what it's like right now.

00:05:43:44 - 00:05:49:49 [Jackie] About to turn. And so what are some of the your favorite interest rates at the moment.

00:05:50:02 - 00:06:07:31 [Chris] Yeah. So well so good news on that. So we're actually providing a mortgage monitor service for clients. So we've got a lot of clients in our world who potentially aren't looking to refinance, don't really want to change banks happy with their lender. Okay. What I would say is when's the last time your bank called you to offer you a better interest rate?

00:06:07:35 - 00:06:35:06 [Chris] Our mortgage monitor service offers this. So what we're saying to many of our clients is, let's go back and check in with your existing lender and find out where the benchmark of a better rate should be for you with that lender, and then assess whether it's a good or a bad rate there. Before we looked at to sort of refinance, but some of our competitive rates right now move Bank in particular, have got an incredibly low variable principal and interest rate at 5.94% for owner occupiers, which is super, super cheap.

00:06:35:13 - 00:06:54:36 [Chris] We're doing a bit of work with Adelaide and Bendigo Bank, and they've got some really good interest rates and offers right now as well. And interestingly fixed rates. So Move Bank have got a 5.79% with offset that and three year fixed their two. So again we've got some products which are priced a lot lower than potentially where your rate is today.

00:06:54:36 - 00:07:10:30 [Chris] So again it's appropriate now to to sort of check in and get a health check on your interest rates. Five for a better rate at your existing lender. For investors I think cash flow budget is important. So resetting interest only repayments on your investment debt helping us, that's a good thing to do right now. An interest rate was there.

00:07:10:31 - 00:07:33:00 [Chris] Bank of Queensland have got a really cool three year fixed rate at 6.09. Now I know forecast interest rates often go lower, but if you want cashflow certainty on interest only 6.09 might be a good way to give you that sort of peace of mind for the next couple of years. Outside of that, though, that we've got a AMP variable interest only at 6.49%, which is a really, really competitive interest only rate there as well.

00:07:33:00 - 00:07:42:10 [Chris] So a few good options for clients. But I think first and foremost, check in, register for your mortgage monitor. Your lending advisor will review your rates and and give you the advice next.

00:07:42:24 - 00:07:48:07 [Jackie] Sounds good. And so I saw that you had, you know, bank in for a chat recently. What do they have on offer?

00:07:48:16 - 00:08:10:25 [Chris] You know, part of the mortgage broking role is that we do have access to other types of lending businesses. Okay. And also often, you know, we get the opportunity to support small business, larger business, self-employed clients as well. So I know we mainly talk about home loans and investment home loans on here. But the specialization or the skill set of our brokers certainly extends to these services too.

00:08:10:30 - 00:08:36:23 [Chris] Now, when a business is borrowing money for small businesses, typically most lenders like to have like property being a home or commercial property security for that debt. Uniquely Judo, which is, you know, it's sort of a new-ish bank. They've been around 3 or 4 years and and growing exponentially. They're a great bank. Their service proposition is to basically provide a credit solution around the going concern or the cash flow of that business.

00:08:36:23 - 00:08:52:42 [Chris] So what that means is that if you don't have equity in property or the primary asset is this business, the business can actually borrow money, utilize in the, you know, the value of the business, and not secure it against bricks and mortar, which is great. You still got to demonstrate servicing. You know, you still got to go through that credit conversation with it.

00:08:52:51 - 00:09:11:00 [Chris] And because you the bank is taking on a higher risk as well. There is a premium interest rate for these types of loans. But nonetheless, for people who are running businesses out there who are looking to, you know, acquire other businesses, they maybe want to do some shareholder lending, you know, get other key staff members involved in equity in the business.

00:09:11:00 - 00:09:36:33 [Chris] Alternatively, need cash to keep the business afloat through, you know, growing pains and things like that. Well, then judo got a really, really compelling offer to support businesses as a standalone lending against the business. And, you know, the interest rates, even though they're a little bit higher, are still very reasonable. You know, you talking sort of sub round about sort of that nine, 10%, which is still cheapest money for a business loan anyway.

00:09:36:37 - 00:09:50:35 [Chris] ...and also a couple of my good friends are over at Judo as well. So they're helping lots of clients right now. We've got an accountancy business in there, a law firm in their real estate business in that we've got a guy who runs a pub and clubs up in the, in the Northern Territory in there as well.

00:09:50:40 - 00:10:08:51 [Chris] Right now, what else have we got? oh. And he's got a, motel as well. And I've got one more, but I forgot. Oh, financial planning. We're doing financial planning acquisitions as well. Lots of our clients or partners are actually buying books or or the businesses to merge into big, bigger businesses. And, you know, I've got a great policy around financial planning space as well.

00:10:08:51 - 00:10:13:23 [Chris] So anyway, that's my little wrap for Judo. Go, Judo.

00:10:13:28 - 00:10:18:29 [Jackie] Go, Judo! And so what about your wrap on property? I love your property updates.

00:10:18:34 - 00:10:40:23 [Chris] Well it's it's a bit difficult. So I mean the auction rates on the weekend where, you know, the clearance rates were huge. I think it was like 80% clearance rates in Sydney. And the property market is really hot, hot, hot. So we have one of the, you know, the biggest amount of pre-approval and largest number of clients I've had since we started reading in our book, you know, looking, looking and actively looking to buy property.

00:10:40:28 - 00:11:03:05 [Chris] And I'm sure it's quite frustrating, going to open homes, going to auctions and, and sort of not getting your paddle up. So, you know, I feel that right now there is certainly a bit of an undersupply property in the marketplace right now. We've talked about those pockets of property as well, so that, you know, we've got a lot of first home buyers trying to get into that sort of sub $1 million property value as well, making it extremely, extremely hot.

00:11:03:05 - 00:11:17:43 [Chris] So yeah, it's a bit of a challenge for many. But pleasingly, on the weekend I think we had 4 or 5 good clients exchanged on new homes, which is wonderful. So, you know, we'll be looking forward to winter for those guys moving in, getting some pictures on Lydian HQ about them, you know, with clay keys and new homes.

00:11:17:56 - 00:11:24:54 [Chris] So I suppose the message really is, you know, keep trying. Although it might be frustrating, opportunities do pop up. And it's a numbers game isn't it?

00:11:24:54 - 00:11:30:16 [Jackie] Yes, definitely. And speaking about Lydian HQ, what's the update there?

00:11:30:27 - 00:11:50:33 [Chris] Well, we have a new person joined us and he's a basically a friend of a friend. So there's a partnership that we've got called Salefunder. And those guys were fed through one of their staff members, brothers, who is aspirationally looking to become a mortgage broker. So Remon Gallo joined us last month and he's a lovely young chap. He started out in his mortgage broking journey.

00:11:50:47 - 00:12:13:49 [Chris] He's putting up with Christian in the office here and, you know, learning everything about lending, which is great. So we've kind of got this little A-Team going on, which is cool. And you know, Remon's a lovely guy. He comes with a psychology background. So different sort of lens on things. And hopefully he's not judging me right now. But he's a pretty studious guy too, a good team player and a really nice fit for our Sydney office as well.

00:12:13:49 - 00:12:16:26 [Chris] So, you know, welcome to Remon. Yeah. Good bloke. All around.

00:12:16:33 - 00:12:24:07 [Jackie] Yeah. Awesome. And so are we hiring in any cities at the moment or are we close to the brokers. What's the update there?

00:12:24:12 - 00:12:44:43 [Chris] That's a really good question. You've been watching some of the posts okay. Well, so geographically Lydian... so we've got a partnership with H&R Block which is quite huge, right? And those guys amazingly you've got 400 offices seven 2000 texture. It's a crazy, crazy number. And we are supporting this mortgage monitor service with H&R block in this coming tax season.

00:12:44:43 - 00:13:05:54 [Chris] With this sort of impending event, we are looking to bolster up the team some of the slots. We've got to manage a district which would be 20 offices. Yeah, maybe 150 staff in that sort of little district. That would be Perth. We're looking for people over in WA. So anyone over there is looking to yeah I suppose have a boost to their, you know their numbers.

00:13:05:54 - 00:13:23:47 [Chris] We'll then reach out to Lydian and and we can certainly have a chat and connect and, and talk about those districts that we've got. There are openings Newcastle just north of Sydney. So we've got a great team up in Newcastle. Jim's the district manager up there and we're looking to have a person to pop around those Newcastle offices as well and support that.

00:13:23:58 - 00:13:48:21 [Chris] Tasmania. I don't know if anyone was looking for a move down to to Tassie as well, and certainly, there's a little spot down there. So if you can drive between Launceston and Hobart and support Carol and her team, they're looking for people there as well. And then lastly, Canberra. So our capital city viewers, if you're there and you're a mortgage broker in Canberra, will then certainly there's an opportunity to speak to to to speak to us there and have a little patch as well.

00:13:48:32 - 00:13:56:54 [Chris] So selective spots right now in line with the districts that we're currently supporting more remotely than, than others. But anyway yeah reach out.

00:13:57:07 - 00:14:12:37 [Jackie] Yeah. Awesome. And if you do reach out after watching this video, let us know if we get well that's everything. Thank you so much, Boothy. Always so much fun jumping on these updates with you. So we'll see you next month. May! The May update.

00:14:12:48 - 00:14:20:13 [Chris] Yeah okay. We'll keep reading between the cracks okay. And yeah. Enjoy your...enjoy your April. Thanks again Jackie, I love it. Ciao, ciao!

00:14:20:22 - 00:14:27:18 [Jackie] Thanks, Boothy Bye!

Follow us:

• Website: https://www.lydian.com.au
• Facebook: https://www.facebook.com/www.lydian.com.au
• LinkedIn: https://www.linkedin.com/company/lydian-financial-services/?viewAsMember=true
• Instagram: https://www.instagram.com/lydianfinancialservices/
• Watch on YouTube: https://youtu.be/E2xtHWdfMWQ

00:00:00:00 - 00:00:07:27 [Jackie] Hi, everyone, and welcome to Boothy's Bites with the man himself, Mr. Chris Booth. How are you, Boothy, on this Monday morning?

00:00:07:31 - 00:00:09:02 [Chris] Hey, Jackie, are you doing all right? Happy March.

00:00:09:03 - 00:00:31:18 [Jackie] Happy March. My goodness. The March installment of Boothy's Bites. Yikes! Anyway, let's jump straight into it. So usually we open with an update on interest rates, but I want to do that second. And first of all, I'd love for you to talk us through the Lydian Partnership Program and how it's mutually beneficial between both the partners and the brokers.

00:00:31:21 - 00:00:53:42 [Chris] Yeah. And this conversation and sort of commentary sort of really brought about by the week that was last week where CBA had come into market with a really, really good product. Okay. So no doubt about it, they've got this digital loan called Unloan, which is a very good product. It has very cheap rates. It isn't for everyone. It's quite a niche space where all of the information is kind of validated digitally for you.

00:00:53:42 - 00:01:10:53 [Chris] So it's one of these sort of these new sort of digital loans. But one of the big things for me was last week we actually had a great meeting with BankVic. So this is a new lender to Lydian's panel, and it got me thinking about why we do what we do. What's the, you know, what's the value proposition of working with Lydian.

00:01:11:02 - 00:01:37:17 [Chris] And yeah, my commentary is around so really... BankVic are a really beautiful bank. You know, it's community focused. They're very much looking after their members who are people in working for like the police, fire, nurses, ambulance and also looking after teachers as well. So anyone sort of in social services. They've got lending products dedicated to those types of clients, which is great.

00:01:37:21 - 00:01:58:18 [Chris] And yeah, look, I suppose what that means for me is that when when you actually get to sort of speak to a mortgage broker, obviously the product that we're delivering at the end of the you know, the advice process is really important. But the things that we do before that are even more important, right? Having sort of one single product to refer to is not best interest for the client.

00:01:58:22 - 00:02:19:42 [Chris] So, you know, what where Lydian is really coming from is that when you do introduce a client to us, you know, we obviously going to do that sort of that needs and objectives and that discovery session finding out about that client and if their profession is such, which it suits that particular lender, well, then we've got over 60 different lenders which actually sort of match up that social and financial profile to those different lenders.

00:02:19:49 - 00:02:35:07 [Chris] Secondly, as well, you know, when we want to press that button and send a client to a lender, we want to have a high probability that we're going to get approved, right? There's no point in actually sending that client to a bank and going, sorry, the client. Okay. And then the client goes, well, you know, really what happened?

00:02:35:15 - 00:02:50:56 [Chris] And that's not what you get in our world, okay? So you know, the work we do before we actually send and... sorry, make a recommendation for a lender and then send the details of a client to a lender. It's huge. You know, we collect a lot of information. We go through like a really detailed due diligence process.

00:02:50:56 - 00:03:12:22 [Chris] We check serviceability, we do valuation reports on property. We validate, you know, the types of income that a person derives. We look at the credit report and look at the behavior of credit before. And really we deep dive into those documents that we get. And that for me, is really a massive point of difference. Yes, we can refer through to on loan.

00:03:12:27 - 00:03:32:36 [Chris] And if it fits, they'll get where you're going. Your client's going to be happy and going to get a great product. But they basically haven't been advised through the journey or the process. And I think a lot of a lot of clients these days need that hand-holding, that education, that personal touch. And I can guarantee you CBA won't be actually speaking to the client through Unloan because it's a digital loan.

00:03:32:51 - 00:04:00:47 [Chris] You might be a cyber boss. I don't know, is that correct word or anything or a bot speaking to the client saying, you know, computer doesn't know or computer says no (laughs). So yeah, so kind of wrapping it up a little bit, you know, is a really sort of reflective moment for me in the CBA, trying to shake the market up by having this product, which is available to accountants, lawyers, real estate agents to spot and refer their client details through.

00:04:00:52 - 00:04:25:57 [Chris] There's no pre-qualification before you refer for the loan. And yeah, CBA will pay commission for that referral. But as far as where everything comes in is one, you're going to speak to a very, very good broker. Number two, you're going to get all of the quality of the advice that the client is expecting, because when we referred from a professional, you know, we want to uphold the quality of the advice that they actually give to their clients.

00:04:26:11 - 00:04:44:06 [Chris] We want to do the same and we do do the same. We have an advice process to go through. We make it very clear why we recommending that product, whether it be for price, whether it be for credit policy, whether it be for other nuances within the lender as well. We make it very clear to both the client and the partner what commissions we get paid from each different lender as well.

00:04:44:20 - 00:05:02:18 [Chris] So it's a really transparent conversation. And really I just want to say like stick it to CBA. It's a great product, but you've just got to look at it the wrong way. You know, if you want that product to have value in all lending market, well then you should be broking that through the broking channel as normal. I'm more than happy to, you know, to talk to CBA.

00:05:02:18 - 00:05:20:15 [Chris] If anyone watches Boothy's Bites this month and talk how that week how we could do that you know but anyway, so my messages is Lydian is about giving advice. We're actually about helping clients and we want to make sure that the outcome that we get for the clients is kind of locked in upfront. So that's my preaching moment.

00:05:20:15 - 00:05:23:26 [Chris] Hopefully I didn't take up too much time.

00:05:23:31 - 00:05:35:18 [Jackie] I love it. I know which channel I go in Lydian every day. But then again, maybe I'm paid to say that (laughs). So moving on to interest rates right now, what is the update there?

00:05:35:27 - 00:05:57:38 [Chris] Well, we've had a month which was really quite, you know, low key, to be honest. Again, we've talking about inflation. Inflation is coming down, which is great. The there is a bit of sort of you know, the commentary is really is now turned and we're really waiting for sort of next indications. But certainly growth in the economy has really stalled both domestically and internationally in sort of similar marketplaces to Australia.

00:05:57:43 - 00:06:22:53 [Chris] And what that means basically is as growth falls, the central banks of those nationalities will actually have to consider, you know, what they do to stimulate growth. Now, in Australia, the only lever we have over here is to decrease interest rates. And I do believe that growth cycle that we've, you know, we've got right now has sort of petered out at the end of a lot of the income streams that the economy gets from exporting, especially to China.

00:06:22:54 - 00:06:41:09 [Chris] You know, they've obviously done quite poorly lately and there's a bit of trouble there and we've killed off the consumer you know with the high interest rate increases over the last sort of two years as well. And in Australia we get impacted by high interest rates or interest rate movements at the RBA because we don't have those 30 year terms like they do overseas and things.

00:06:41:09 - 00:07:01:10 [Chris] So, you know, we have killed off the consumer a little bit and I think the only sort of viable pocket of the economy which we can probably incentivize a little bit to get out and spend and feel a bit more comfortable about things in the economy is that consumer. So, my gut feeling is that by June we'll get some rhetoric from RBA to say interest rates, you know, we're planning to put them down. Also in July...

00:07:01:10 - 00:07:16:55 [Chris] We've got the tax breaks from the from the government as well, which is a bit of a bonus to it. So I think we're on a plateau for a few months. The next meeting with RBA is I think is on the 18th and 19th, which is next week. So that's the first week. Yeah, let's change the cycle a little bit.

00:07:16:55 - 00:07:23:52 [Chris] So you know, just kind of watch this space. But I think normal interest rates for the, for the time being. So yeah, I think we've got a bit of stability in the market. Yeah.

00:07:23:58 - 00:07:27:05 [Jackie] Okay. So hold steady and see what happens.

00:07:27:16 - 00:07:28:39 [Chris] Hold fast. Yeah.

00:07:28:44 - 00:07:39:27 [Jackie] Something like that (laughs). What about that home loans? What are your favorite home lending interest offers on the table at the moment?

00:07:39:32 - 00:07:57:46 [Chris] Yeah so again, we do have a lot of lenders. So a lot of our business goes to the major banks. Now, there's no doubt about it. But there's a lot of second tier or sort of second lenders out there who we do support. And that's mainly around that pricing and community service that they get. Move banks, a lovely bank and they've got some great rates right now.

00:07:57:46 - 00:08:21:28 [Chris] So move bank they've got a principal interest variable 5.94%. They've actually got a three year fixed principal and interest owner occupied at 5.79%. So really cheap interest rates compared to others. And secondly, good service proposition. You know, there are nice bank, nice community bank as well. So you certainly get the service there and then some investor home loans if you're looking to pay principal and interest.

00:08:21:30 - 00:08:45:07 [Chris] Heritage Bank: they've got 6.24 P&I variable which is a pretty cheap rate and then AMP are actually quite active in that market right now. So maybe a bit of a high higher dollar figure for your loan. They've got some attractive rates I believe like 6.49 is their carded rate and that's interest-only variable. And also I think if it's over $1,000,000, we can get some specials down to the 6.39, but sort of reach out to us.

00:08:45:12 - 00:09:05:09 [Chris] And then lastly, we've got Bank of Queensland, they've got a 6.09 3-year fixed interest. Only. Would I recommend a fixed right now? Probably not. I'd have to have a deep conversation with the client, but if really you want cashflow certainty just to lock in those rates and have a bit of peace of mind for a few years, we can talk through what the merits and the benefits and things like that are for you as well.

00:09:05:09 - 00:09:09:49 [Chris] So yeah, as interest rates kind of coming down, we're starting to see some cheaper fixed rates in the markets.

00:09:09:54 - 00:09:15:07 [Jackie] Yep. Awesome. And what about the property updates? What have you got for us there?

00:09:15:12 - 00:09:49:13 [Chris] Well, I'm no property guru, okay, but it seems as though the property market is still pretty hot, hot, hot. You know, clearance rates are really, really strong. And certainly, there's a lot of demand. I mean, we've got lots of pre-approvals in place for clients, mainly on that sort of first home buyer or that first home sort of space, so a lot of demand with finance ready to go find that first home and really what that means in that price point sort of, you know, first time home buyers, you know, sort of the 600 to sort of $1.5 million, that's really heavily contested.

00:09:49:28 - 00:10:15:32 [Chris] The apartment market in Sydney is pretty hot. You know, I've seen some recent options which have been quite crazy for apartments locally. And secondly, that sort of, you know, the upgrade family home, you know, up to sort of two and a half million dollars. I know that sounds a lot of money, but, you know, if you're selling and buying with some equity in that and sort of borrowing that one, one and a half million dollars, which is still an affordable loan, that up to that sort of two and a half, $3 million home prices is certainly being hotly contested auction as well.

00:10:15:32 - 00:10:33:10 [Chris] So again, I think, you know, that it's quite a tight market, the higher value properties, I think that's a difficult one because a lot of people who borrow, they're largely reliant on like bonuses and alternate styles of income or, you know, probably not quite as confident today in the marketplace as there might have been a few years ago.

00:10:33:10 - 00:10:54:07 [Chris] So and then the other one we're seeing is people selling in sort of more of the regional areas. So, you know, Sydney being a hub, being a city, a lot of people through COVID went out or pre-COVID went out and bought, you know, sort of on the fringe suburbs or in the sort of regional suburbs which were connected to Sydney, but still kind of a one and a half, two-hour commute.

00:10:54:07 - 00:11:18:19 [Chris] And I think what people are having to do now is kind of reassess that lifestyle because the work-from-home availability is probably not as easy to manage. Secondly, there is demand for people to get back in the offices, whether it be like a couple of days a week and things. So you know, that call card back, back to more suburbia, closer to the CBD, we start to see a few sales of properties in those regional areas and people trying to buy back in the cities again.

00:11:18:19 - 00:11:21:15 [Chris] So that's my property snapshot.

00:11:21:19 - 00:11:27:54 [Jackie] Love it. And just to finish off, what's news at Lydian HQ, besides our new uniforms that we're wearing (laughs).

00:11:27:59 - 00:11:31:57 [Chris] Yes, it's White Monday (laughs).

00:11:34:24 - 00:11:58:09 [Chris] Yeah. So for us, really, you know, we've got a few new brokers in Lydian over the last six months and really what that is doing is kind of plugging in some of the pockets that we've got with regards our national partner being H&R BLOCK. So H&R BLOCK has got sort of 18 districts around the country, and we're trying to find appropriate mortgage brokers in those geographical locations to support the sort of rollout of services with those districts.

00:11:58:13 - 00:12:21:36 [Chris] We've been short of someone in the South Sydney region and we've been very fortunate to get Josh and he comes in basically great pedigree, good banker, good broker, and we welcome Josh to the team and we look, if anyone's out there, we do desperately need a Canberra broker, which would be good, a Newcastle broker which fits in on that sort of Newcastle North patch there and anyone watching from Perth as well...

00:12:21:36 - 00:12:29:47 [Chris] ...we'd love to have a broker geographically located in the Perth city as well. So a few opportunities there for brokers to join the Lydian group. But welcome Josh!

00:12:29:47 - 00:12:38:52 [Jackie] Yeah, welcome Josh! And get in contact if anyone is interested in joining the crew, the best crew ever.

00:12:38:52 - 00:12:40:37 [Chris] Too easy (laughs).

00:12:40:42 - 00:12:48:46 [Chris] Well Boothy, thank you so much for your time. Love chatting to you and we'll see you next month for another installment of Boothy's Bites!

00:12:48:46 - 00:12:51:54 [Chris] Thanks so much, Jackie! You have a great March and we'll see you soon.

Follow us:

• Website: https://www.lydian.com.au
• Facebook: https://www.facebook.com/www.lydian.com.au
• LinkedIn: https://www.linkedin.com/company/lydian-financial-services/?viewAsMember=true
• Instagram: https://www.instagram.com/lydianfinancialservices/
• Watch on YouTube: https://youtu.be/zTTKSo13kdM

00;00;00;00 - 00;00;05;09 [Jackie] Hi everyone, and welcome to Boothy's Bites for February. Hey, Boothy. How's things?

00;00;05;15 - 00;00;12;29 [Chris] Hey, Jackie. Yeah, happy February to everybody. And yeah, look, another episode. It seems to be flying by already. 2024, huh?

00;00;13;02 - 00;00;17;08 [Jackie] Well, we're not. We have Santa hats on again for December. (laughs)

00;00;17;10 - 00;00;29;11 [Chris] It's funny. I was looking at the Lydian beanies there, so, you know, if you if you are watching this, which probably no one will get your orders in to book a Lydian beanie, you know, because they'll be going really fast I'm sure.

00;00;29;13 - 00;00;40;12 [Jackie] They were flying out the door. So get them for your ski tips in winter. Anyways, on with Boothy's Bites: can you tell us what's the latest with interest rates?

00;00;40;18 - 00;00;59;18 [Chris] Yes. Well, we had the meeting yesterday, which was really good to say, really. I mean, look, every month we've been the last few months, we've been talking about the same thing. So it's kind of like "eugh, boring, boring". But the cool thing about it is all the things we've been talking about happening are happening, which is cool. So the inflation rate is coming down...

00;00;59;20 - 00;01;20;06 ...the RBA, they're still watching that number, but they seem to be comfortable with it right now. I do think that the commentary yesterday was a little bit sterner with a warning to say, look, the doors still open potentially if the inflation doesn't continue to go down to potentially increase interest rates again. But it was a really sort of passive comment, not a firm comment.

00;01;20;08 - 00;01;48;16 So yeah, it's kind of getting boring, boring, same sort of thing. But the really positive thing out of it is that no change in interest rates, again, I think really it's a wait and see to watch these numbers come down and you know, the interest rates in the marketplace have fallen quite considerably as well. So even though the RBA cash rate is at 4.35%, the government bond market, which is sort of a measure of future interest rates, has really fallen away.

00;01;48;16 - 00;02;12;03 So they're actually less than the cash rate right now. So we're seeing two year bonds at 3.8%, three year bonds at 3.7%, so that forecast for interest rates is fairly firmly to be lower, which is really cool for us all. And that has a flow on effect. Obviously for interest rates. As to the really cool thing, I think which has been sort of announced and sort of ratified over the last few weeks has been the tax breaks that we're all going to get.

00;02;12;03 - 00;02;31;27 So as low and middle income earners, which I'm certainly not being self-employed, you know, I'm not high income earner, we all get a bit of a tax break in July, which will be really nice as well. So on one hand, we've got the RBA. Yeah, exactly. Get some money back in the pocket. Let's order our flat screen TVs from JB Hi-Fi or a pair of new Bose headphones or whatever it needs to be.

00;02;32;03 - 00;02;35;11 And get cracking. Yeah, get that money spent.

00;02;35;13 - 00;02;49;03 [Jackie] Sounds good. All these remarks about, you know, boring and repetitive messaging, it's almost like, you know what you're talking about Boothy, because you're calling it exactly as they're calling it. So who knew you were actually quite good at your job?

00;02;49;05 - 00;02;59;11 [Chris] You don't get the gray beard and the bald head. I can see the shiny bits on the top here. That's you know, that's my knowledge. You know, for 25 years I've been in the game. There you go.

00;02;59;14 - 00;03;01;03 [Jackie] Yeah, I'm not as knowledgeable as you.

00;03;01;03 - 00;03;04;07 [Chris] I get it wrong quite a lot but anyway still.

00;03;04;10 - 00;03;09;08 [Chris] So what can you tell us about some of the lenders and some of the moves they've been making at the moment?

00;03;09;12 - 00;03;29;06 [Chris] Yes. So again, so that's been really nice. We now seem to be able to get a quite level playing field of interest rates, which is really cool. The major banks being sort of your NAB, ANZ, CBA, St George Bank, Westpac, etc., they're all pricing it discretionary for discounts. The more you borrow, the lower the risk being loan to value ratio, the better they're pricing.

00;03;29;06 - 00;03;49;17 So we're talking sort of any deals over $1,000,000, they're offering some really good rates. So that's a bit more bespoke. But some of the I suppose the non-large banks; Heritage Bank have got a really cool rate at 5.99% variable for... that's an own home rates. Adelaide Bank again you know that's Adelaide Bendigo they're really supporting home borrowers.

00;03;49;17 - 00;04;10;10 They've got a 6.09% variable P and I as well. And you know, I'm not suggesting that it's a time to fix, but if people are sort of worried about cash flow and things like that and want to have a conversation about you know, maybe hedging their bets a bit, the fixed rates are now slightly less. So we do have a five year and a three year fixed at 5.99%, which some people might want to consider.

00;04;10;16 - 00;04;32;03 But also, I think, you know, if you're speaking to your mortgage broker now, maybe start to think about what would a would a fixed rate look like for you to be happy with? And over the next of 3 to six months, I do believe we'll start to see those drop a little bit lower as well. So, again, you know, that's the first time we've had rates in the under 6% fixed for many, many months, which might suit some people if they want some advice.

00;04;32;03 - 00;04;54;09 And then for our investors, you generally pay a bit more for the investor loans. But we've got Beyond Bank who've got a 6.14% variable which is a good one. Bank of Queensland, they've got a couple of fixed rates at 6.14% as well. So again, you know, if you want a cash flow and sort of hedge your bets and then interest only for that invested debt, we've got Bankwest, which is offering a great 6.44% as well.

00;04;54;09 - 00;05;09;00 So a few rates there and anyone investing in self-managed super funds, you know, reach out to this specialist product. But we've got a 7.09% P.A. variable there too. So some real sexy rates, if you can call them sexy. I don't know. Are they sexy?

00;05;09;02 - 00;05;12;13 [Jackie] Well, it is the month of Valentine's Day. I'll take it.

00;05;12;17 - 00;05;14;01 [Chris] The lovely rates. Lovely.

00;05;14;01 - 00;05;24;24 [Jackie] Right, lovely rates! Let's go with that. And so what are some positive scenarios that have played out recently for some of our Lydian clients?

00;05;24;24 - 00;05;43;12 [Chris] Yeah, good question. So again, you know, most of the time we're working with normal lenders, normal scenarios and working through, you know, trying to find the best rate. But sometimes even though we're trying to find the best rate, the credit policy of the lenders may not allow us to do what we want to do. So a couple of quick niches that we've, you know, kind of stumbled across, really.

00;05;43;19 - 00;06;06;11 Firstly, we had a husband and wife who their incomes were pretty strong, but we still couldn't demonstrate affordability at that sort of nine, nine and a half percent interest rate, which the banks needed us to. The client still wanted a really cheap rate and they've committed to buying an investment property which, you know, when, when they committed interest rates were a bit cheaper and probably be able to demonstrate affordability. In this new environment...

00;06;06;11 - 00;06;26;21 ...now, we were struggling to sort of get the investment debt in place to buy this property. Now, interestingly, the female applicant, she works at a large tech firm, so I'm talking like Google, Salesforce, you know, all of these sort of U.S. companies. And as part of her salary package, she got given share op- shares in a in a plan on a regular basis.

00;06;26;21 - 00;06;55;17 I think it was like quarterly or half yearly. Now, these shares had slowly started to what's called vest, and that means you're given the shares today, but you're not allowed to actually have those shares and access to those shares to sell, sorry, on the market until sort of 12 months, 18 months post when you got given them. But anyway, we found a lender who would actually utilize the shares which were vesting and the schedule of the shares which invested over the last couple of years to actually complement the other income stream that the female applicant was using as well to service the loan.

00;06;55;17 - 00;07;13;09 So the cool thing about that was we're able to actually 1.) state a main bank, 2.) use a really unique policy to get them placed and 3.) get them a really great interest rate to borrow the extra money they wanted. So that was a really, really good outcome for the client as well. And well done to the broker who sort of worked through that deal with the lender too.

00;07;13;16 - 00;07;19;15 [Jackie] Yeah, amazing. A win for everyone. And so what's the latest with Lydian HQ?

00;07;19;19 - 00;07;24;25 [Chris] I just I'll give you one more. Sorry, I forgot. They've got a new one if and the other one.

00;07;24;25 - 00;07;26;09 [Jackie] I was coming out of that. Out of that.

00;07;26;09 - 00;07;45;02 [Chris] Yeah. So the other one as well is self-employed lending. Okay. So if you're self-employed a lot of time the lenders will actually ask for your company financials as well. You know, your profit and loss and balance sheet as well. And there are now a couple of lenders who will just allow if the company's paying a wage to the directors.

00;07;45;07 - 00;08;05;17 Okay. So the company itself is just paying a wage on a monthly basis and we can see that payment going into an account. And also at the end of the year, we've got a notice of assessment to show what the taxable income of the individuals are, even though they're directors of the company. What the banks will do, they will actually not... they don't want to see the profit loss of a company.

00;08;05;17 - 00;08;22;10 They just are happy to see the notice of assessments and then assess the debt on that if it's affordable. So this particular company, it had a couple of a loss in one year but was still paying out income to the client and we were able to use notes of assessment to get the deal over the line again in a real niche little space...

00;08;22;10 - 00;08;31;25 ...and one lot that everyone knows. But yeah, a good result nonetheless. So that's that's why that was my second scenario. But anyway, cool! You were saying about Lydian HQ, yeah? What's happening?

00;08;32;00 - 00;08;33;12 [Jackie] Yeah, what's the latest?

00;08;33;18 - 00;08;53;19 [Chris] So this, I mean this year we could have... so we've got this national partnership with H&R Block, which is really cool and the slowly building, you know, the trust and the I suppose that, you know, getting referrals of their clients through the system right now. So that means now we're looking to recruit more brokers across the country to plug into these geographical districts, which H&R Block's got.

00;08;53;19 - 00;09;15;01 So, you know, looking for a Newcastle broker. If we if anyone's out there, we need a Perth broker as well to support the business, also a Melbourne broker as well. And look, if you're in Northern Territory and you want to join Lydian, certainly there's a spot for a Lydian broker as well. So anyway, we're looking to increase the broker team to complement the national partnerships that we've got, which is really good.

00;09;15;01 - 00;09;33;26 And then the other thing we're looking to do is also bolster up our operations team as well. So, you know, we're going out to partners and clients and we want to commit to good service levels. We want to have trained and educated back office staff as well to complement the excellent work our brokers are doing. So that's a little mini plan for the next sort of few months as well.

00;09;33;26 - 00;09;53;14 So, yeah, watch, watch this space. But you know, plenty, plenty of goals being kicked. Andrew Rocksy's knocking on lots of doors as well. So if you're a partner current and he's, you know, asking to have a conversation with you, take it out, you know, to have a chat with him, he may even take you for a beer. But also he's he's definitely recruiting more partners as well for our broker team as well in that planning space.

00;09;53;14 - 00;09;57;05 So now well-done Andrew, for kicking those goals as well.

00;09;57;08 - 00;10;07;15 [Jackie] Amazing, we're expanding and maybe next time we do a Boothy's Bites we'll be going worldwide; we'll be recruiting from North America and Europe. (laughs)

00;10;07;17 - 00;10;21;12 [Chris] I find it hard to manage myself just in Sydney, so I don't know. But if you speak to Andrew, we're going global. If you speak to me some days, you know, I think I can't believe what we've done in such a short space of time. But anyway, you just got to pinch yourself. Yeah.

00;10;21;14 - 00;10;26;22 [Jackie] Yeah, definitely. You guys have... yeah, absolutely. Steered the ship for all of us. I thank you.

00;10;26;22 - 00;10;28;21 [Chris] No worries! Just one quick question.

00;10;30;14 - 00;10;35;09 When is your three year anniversary? You must be up for nearly an anniversary in Lydian, aren't you?

00;10;35;13 - 00;10;40;13 [Jackie] Yeah, I think it's around April, so it's coming up in a few months.

00;10;40;13 - 00;10;42;02 [Chris] Yeah. So talking about founders of Lydian...

00;10;42;03 - 00;10;45;18 [Jackie] Maybe it is February...oh sorry, what was that?

00;10;45;19 - 00;11;01;18 [Chris] Talking about, you know, founding members of Lydian? I think you are definitely entrenched. Well, I don't think we had much of a business when you start, Jackie, so it only got better. So there you go. So again, you know, I'll have to check maybe next month. We're celebrating a three year anniversary for Just Jackie, which would be pretty cool too.

00;11;03;10 - 00;11;08;09 [Jackie] Woo hoo! I can't wait. I expect something in the mail.

00;11;08;11 - 00;11;11;02 [Chris] (laughs) Very good.

00;11;11;04 - 00;11;15;11 [Jackie] All right, Boothy! Thank you so much for your time and can't wait to do this again next. Yeah.

00;11;15;13 - 00;11;17;09 [Chris] See you March. Ciao!

Follow us:

• Website: https://www.lydian.com.au
• Facebook: https://www.facebook.com/www.lydian.com.au
• LinkedIn: https://www.linkedin.com/company/lydian-financial-services/?viewAsMember=true
• Instagram: https://www.instagram.com/lydianfinancialservices/
• Watch on YouTube: https://youtu.be/RhKK_fJD9n8

00:00:00:00 - 00:00:07:18 [Jackie] Hi everyone! Hi, Boothy. Can you believe we're back filming our first Boothy's Bites for 2024?

00:00:07:22 - 00:00:23:24 [Boothy] I know. Happy New Year, everybody. I feel exhausted already. It's only been two weeks here, and my list of things to do has got pretty long. But I think we've just spoken about some better things, you know, about where we're going camping and having holidays this year. They're the better things to do lists. Anyway, cool. And how are you, Jackie? You well?

00:00:23:25 - 00:00:40:42 [Jackie] Yeah, I'm good, thank you. I had such a good time away at my parents place down in Woolgoolga and then down on the Gold Coast for New Year's. So yeah, I'm similar to you: that to do list is definitely growing but hey let's you know. (laughs) What did you get out of the holidays?

00:00:40:42 - 00:00:55:10 [Chris] Yeah, so I was very lucky. So my kids are a little bit older now, so they don't want to hang around with dad as much, but it's cool. So you have a bit of downtime. Family Christmas. I cook Christmas turkey and have some Yorkshire puddings for the family, which was great. And then a bit of work, and my girls are working through the break.

00:00:55:10 - 00:01:08:16 [Chris] So I did a bit of work on the party boat as well. So that's hence why I look like a little bit tanned and burnt. So I'll probably need to get better at my factor 50 application and then got away for a bit of a sail with a couple of mates, which was beautiful. So ticked some nice boxes.

00:01:08:16 - 00:01:18:37 [Chris] And Kelly, my wife, she managed to go to the Gold Coast without me but with my boy Will, and she had a great holiday there too. So yeah. Now look really, really nice and excited to be back for 2024 too, for sure.

00:01:18:39 - 00:01:27:36 [Jackie] Yeah. Awesome. Okay, well, let's jump in the full 2024, starting with what's the latest news within the walls of the Reserve Bank of Australia?

00:01:27:50 - 00:01:45:25 [Chris] Yeah, well, so I mean, they haven't had a meeting for a couple of months, which is, which has been great. And, and we felt, you know, last year at the end of last year that the sentiment with regards interest rates was, was sort of slowing for increasing interest rates. You know, we had that sort of late call last year to increase by 25 basis points and inflation.

00:01:45:25 - 00:02:03:07 [Chris] And that inflation data has been sort of closely watched really nicely. Only last week we got the inflation data in, I think it was for November. And again, that came in lower than expected, which was down at 4.2%. The RBA looking for inflation to between that sort of two and 3%, so there's still a bit of work to be done.

00:02:03:07 - 00:02:20:36 [Chris] But certainly with the increases that we've had last year and that sort of the slowdown of the prices that we're seeing right now, I think we should drift by midyear pretty close to that sort of top end of that band, that sort of 3% which is great. So, you know, we meet on, I think the 5th of February...

00:02:20:36 - 00:02:43:01 [Chris] ...the next one is which is cool. So, you know, we are expecting and the economists predicting that no rate change there, which is good. Again, that sentiment seemingly is you know, the next meeting will be March. And I believe that that should be it then. And then we take a break between them. April. So between there's actually this year there's a couple of meetings which that they're stopping doing.

00:02:43:01 - 00:03:04:26 [Chris] So certainly between April there's nothing and then May June they catch up again. So really for me, the sentiment I feel is that we're probably right at the top end of this cycle now. I don't think we're going to see interest rates decrease any anytime soon, but certainly by the second half of this year, we'll have to start looking at the data a little bit more closely to see, you know, what the next cycle of interest rates could be.

00:03:04:39 - 00:03:31:06 [Chris] And, you know, a lot of time in these situations, you know, the RBA has tightened up very quickly and actually move those interest rates up extremely quickly. Maybe they have to sort of taper that off a little bit and give us a little bit back. Interestingly, though, we had Albanese came out yesterday and has reaffirmed that the tax cuts are going to be in place for the tax year 2024 and 5, and that obviously puts a bit of cash back in the system for those lower tax rates and lower tax brackets.

00:03:31:06 - 00:03:50:49 [Chris] So again, that is actually putting cash in the system, whereas the Reserve Bank taking it out. And we again, we sort of have to figure out what that impacts on spending and things will be as well because obviously that creates the inflation. So long winded, we're on hold, maybe have two breaks and yeah, we'll dig deeper in the next couple of months, yeah?

00:03:51:10 - 00:03:56:03 [Jackie] Sounds good. And so what are some of your favorite lender offers at the moment?

00:03:56:07 - 00:04:15:54 [Chris] Yeah. So I think with some of our larger lenders, they don't sort of advertise their specials. So, you know, myself and the team here at Lydian are fighting really hard with discretionary discounts for our clients at the large banks. I'm talking now CBA, Westpac, ANZ and NAB and they're great sort of groups. So we are getting some good discretionary rates.

00:04:16:01 - 00:04:34:19 [Chris] Typically the large banks want larger deals, lower loan to value ratio, so their pricing does really favorably. Some of the more smaller lenders. We've got Heritage Bank, which have got a great variable P&I for homeowners at 5.99%, which is really, really cheap money you know that's a great rate and I'm really attracting lots of people to them.

00:04:34:33 - 00:04:51:48 [Chris] And I suppose then we've got a swag of lenders in that 6.09% owner up. So we've got Adelaide Bank, Ubank, Bank of Queensland, Firstmac all trying to attract that sort of low P&I own home. Again, it's for a low loan to value ratio loans as well. So 6.09% is sort of the median. For the investors...

00:04:52:01 - 00:05:10:17 [Chris] ...we've got Heritage again there, P&I at 6.24%, which is a pretty cool rate. And yeah, so interest only rates that typically a little bit higher and St George Bank who've got a 6.60 interest only rate that was a special we just got before. So again if it's a discretionary request we're getting some pretty good rates there for interest only.

00:05:10:17 - 00:05:27:38 [Chris] So, and what I would say is we're trying to get people back into that sort of budgeting and housekeeping of managing their finance. So making sure your investment debt is interest only, making sure your home loan, you know, we're concentrating on repaying that, getting some redraw, getting ahead of the repayments. They're using, offset, etc.. So that's our strategy.

00:05:27:43 - 00:05:35:54 [Jackie] And so speaking of the housekeeping of financials, how is Lydian helping our clients kickstart their New Year?

00:05:35:58 - 00:05:50:40 [Chris] Yeah. So I think importantly, we've all got to have a things to do list than as much as it probably upsets people opening the financial side of things because you go, okay, it's been really hard and I don't really want to think about it after I've been having such a good time on holiday. A lot of our clients are coming back and we're doing reviews.

00:05:50:40 - 00:06:05:52 [Chris] So again, simple things. Let's make sure that you're getting a great rate at your existing lender. Okay, So we'll go into bat for you there and fight for a better rate for you. You know, we are looking at clients who now are coming out of that sort of that difficult period last year where you really weren't sure about, you know, where interest rates are going.

00:06:05:54 - 00:06:26:29 [Chris] We have a bit more confidence now. We probably had some time to sort of talk about what our personal wealth creation plans are for 2024. So clients are coming to us and going "Right, I want to know with certainty, you know, what can I borrow to buy another property, whether it's my first home or an investment property". So reviewing valuations of property, making sure you know that we've got an affordable lender as well.

00:06:26:39 - 00:06:47:45 [Chris] I've got a bit of work because there's a massive disparity in affordability with all of our lenders right now. So with what you know what, you can borrow one lender is can be about 20% or 25% different at other lenders. So really working hard with affordability. Other one, you know, a few people spend a little bit of money on the credit cards lately, you know, holidays have caught up on a credit card, some dirty spending for, you know, big gifts and things like that.

00:06:47:45 - 00:07:07:12 [Chris] So we were doing some debt consolidation. So getting rid of those Citibank or other credit cards at 20% and putting you into the home loan at sort of 6% and and getting back on track. Same with car loans as well, sort of you know, people get caught up with personal loans for vehicles and things like that. So a bit of debt consolidation getting again that budgeting and repayments back on track as well.

00:07:07:12 - 00:07:16:57 [Chris] So yeah, check in, have a review meeting you know whatever your plans for 2024 are we can talk you through it and then we've got some things to do as well with that you know with next steps. Yeah.

00:07:17:07 - 00:07:22:03 [Jackie] Yep. Sounds good. I might have to give you guys a call. (laughs)

00:07:22:08 - 00:07:26:29 [Chris] Oh, you're not speaking to me. (laughs)

00:07:26:34 - 00:07:31:55 [Jackie] And I'm hearing a lot about self-managed super fund lending at the moment. Can you tell us more about that?

00:07:32:00 - 00:07:47:45 [Chris] Yeah, so and that's an interesting one. So again, as interest rates have risen over the last year and a half and sort of budgeting and expenses for your personal household have increased, you know, because of the weight of the, you know, the repayments for that debt. You know, people are still aspirational. They still want to invest in property.

00:07:47:45 - 00:08:09:41 [Chris] Right? But it may well not be as affordable in your personal name to buy that investment property. However, you know, you've got a good job with the contributions which are going into superannuation on a monthly basis or regular basis with your wage. And secondly, you might have built up quite a large portfolio and super. Property is an asset classes, you know, is a lot of people are more comfortable in that rather than shares and funds and things like that.

00:08:09:41 - 00:08:26:42 [Chris] So aspirational people making a decision this year who are going "Right, well I'm a bit tight to borrow in my personal name where I don't want to do that and stress my personal finances but I've got a large pool of funds in my super; I want to diversify some of the investments I've got away from funds and shares into direct property".

00:08:26:42 - 00:08:58:08 [Chris] Self-managed super funds is a good way to do that. It's not for everyone. There's a lot of sort of rigor around how you borrow on that and we'll talk to a specialist broker and also we can get you advice around to doing that. But in simple terms, your contribution to your super, the rent income that you get from the property and the lower loan to value ratio borrowing that you typically do in that environment, the structure of buying property in this manner can actually, you know, get you an affordable assets which will repay the debt off over sort of 15 or 20 years, which wouldn't be unreasonable.

00:08:58:21 - 00:09:16:53 [Chris] And it's just another way to invest in property. So, you know, again, reach out. It might not be suitable for you right now, but we can plan around, you know, what steps we have to do to actually get you into a lender. But there's lots of lenders who've got that appetite right now. Interest rates are slightly higher. That sort of 7%, maybe seven and a half percent principal and interest.

00:09:16:53 - 00:09:38:45 [Chris] So you do have to pay a bit of a premium for that. But for any people who want to get involved in property in 2024, potentially, we'd like to look at the options between personal name and self-managed super funds. We've got, you know, we've got some specialist brokers in our team who do this very, very well and also give good advice and certainly give you clarity and transparency about taking those next steps as well.

00:09:39:00 - 00:09:43:10 [Chris] So again, it's an option for aspirational accumulators.

00:09:43:10 - 00:09:48:49 [Jackie] Amazing! And so what about a property update? What's the latest there?

00:09:48:54 - 00:10:08:11 [Chris] Yes, well, we've gone through Christmas, so I know the clearance rates and auctions were a little bit down at the end of the year. I'm really keen to see what the listings are going to be over the next couple of months because I think last year people were uncertain about 1.) buying property and 2.) listing their properties because property prices were going up.

00:10:08:24 - 00:10:25:30 [Chris] I think property prices now will probably stabilize a little bit. We've seen that on the sort of higher end of property markets and the clearance rates for those high value properties have been a bit tough. We talked before about sort of that lower end of property up to sort of $1,000,000 that's really attractive to first time buyers with all the benefits.

00:10:25:30 - 00:10:47:00 [Chris] We've got that new Queensland benefit come out just recently. I think it's $30,000 of cash for a first buy, which is really a big incentive and a big cash injection to deposit to buy property. So I think that that sort of lower end of purchase price between sort of $500 to $1,000,000 is going to be well-supported and we'll see a bit of an appreciation in that sort of end of the market.

00:10:47:00 - 00:11:05:40 [Chris] So, you know, your lower end apartments I think will appreciate and will continue to do well, the higher end of your sort of two and a half, three, $4 million homes may struggle a bit this year. But just be interested to see what listings come on the market because we've got sort of second, second half of summer coming right now as well.

00:11:05:45 - 00:11:16:48 [Jackie] Yes, sounds good. Stay tuned. And so my last question, what's happening at Lydian HQ? Is everyone behaving themselves now that they're back from holiday?

00:11:16:53 - 00:11:37:55 [Chris] (Laughs) I think so. Well, I mean, we've we've had a couple of we've had a coffee catch up this week with a really unique lender called Vado. So that so that's a private lender. So we've all been doing a bit of learning, everyone's been coming back with all of their plans. So I've had some really good meetings with a lot of the brokers talking about what their business plans are for 2024, how they're going to reach out and help their clients and do reviews.

00:11:38:00 - 00:11:54:23 [Chris] And again, you know, look at repricing and reviews for existing clients, which is really cool. So, you know, we've dusted off back in business. Everyone's back working right now. I'm really excited for this year. We've got no new recruits as yet, but we've got a few people we're actually interviewing and supporting with potentially onboarding with Lydian...

00:11:54:23 - 00:12:14:22 [Chris] ...so that's really exciting. Our operations team are doing great. You know, they've come back and they're doing lots of reviews for the guys. Our marketing team have got plenty of activity for, you know, for the branding and sort of engagement documents for clients. So yeah, everyone's been really, really busy and obviously, you know, Jackie's back, Rocksy's back, the whole gang's back.

00:12:14:22 - 00:12:21:51 [Chris] And Jo Wynn's got a list as long as there are things to do too. So we never really had a break.

00:12:21:55 - 00:12:24:24 [Jackie] We're ready to hit the ground running again.

00:12:24:28 - 00:12:28:53 [Chris] And we've already given out two Lydian trucker caps this year. Whoa!

00:12:28:58 - 00:12:37:01 [Jackie] Can't wait to see those photos. Well, Boothy, thank you so much. Thank you, everyone, for watching. And we'll see you next month.

00:12:37:06 - 00:12:38:48 [Chris] See ya, Jackie! Ciao!

00:12:38:52 - 00:12:44:39 [Jackie] Ta, bye!

Follow us:

• Website: https://www.lydian.com.au
• Facebook: https://www.facebook.com/www.lydian.com.au
• LinkedIn: https://www.linkedin.com/company/lydian-financial-services/?viewAsMember=true
• Instagram: https://www.instagram.com/lydianfinancialservices/
• Watch on YouTube: https://youtu.be/vkti-aJS7JM

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!