Interest rate cut (finally)...

For the first time in 12 months, the Reserve Bank of Australia (RBA) has announced it cut the cash rate by 25 basis points to 1.75 per cent.

The RBA's decision to cut the official interest rate comes after a surprisingly low inflation figure of 1.3 per cent year-on-year was released last Wednesday.

The ASX futures market has been pricing in a 50/50 chance of a rate cut to 1.75 per cent versus 'no change' since the release of the inflation figures.

With a target inflation rate of between 2-3 per cent, concerns about a lack of growth in the Australian economy spurred by the low Consumer Price Index readings appear to have forced the RBA's hand.

Last week's low inflation numbers had made a May rate cut likely, despite the fact that the federal budget is on the same day.

For more information, contact Rick Maggi on 9382 8885 or rickmaggi@westmount.com.au.

02/02/16:Super or the mortgage?

Many people wait until their home loan is paid off before investing more in super. However, if you are currently making more than the minimum home loan repayments, you may be better off when you retire if you make additional super contributions instead. Super or Mortgage?

For more information, contact Rick Maggi at Westmount Financial on 9382 8885.

01/01/16: Here's to You...

When we look back at the things that helped make 2015 a great year, our warmest and fuzziest feelings come when we think of you, our client.

So thank you for choosing Westmount. Here's to another prosperous, healthy, exciting year full of possibilities!

The Westmount Team

17/12/15: IS THIS The official end of the GFC?

After much delay and much warning, the Fed has finally raised the Fed Funds rate from a range of 0-0.25% to 0.25%-0.5%. The move signals confidence in the ongoing recovery in the US economy after the crippling effects of the Global Financial Crisis. More importantly, the language of the Fed was sufficiently dovish with regard to future rate hikes.

At the time of writing, the ASX200 has gained almost 100 points, on top of the previous day's 118 point rebound, and BHP shares are up over 5% - a major relief to for investors who watched the local bourse fall in each of its six prior sessions.

26/10/15: Offset Accounts: Better balance

...a better way to manage your mortgage

If you want to repay your mortgage quickly and still have easy access to your additional repayments, an offset account may be worth looking into. Read more here

For more information, contact Rick Maggi at Westmount Financial on 9382 8885.

Rick Maggi Westmount Financial Clear Focus. Better Solutions.

03/09/15: Keys to de-stressing a mortgage

The causes of mortgage stress...

Don't sail out farther than you can row back. This Danish saying is sound advice for anyone thinking of borrowing to buy a home, particularly now that interest rates are low and house prices have risen sharply.

According to a paper for the Centre of Policy Development and University of Canberra, Australians have a tendency to be over-confident in our ability to repay loans. We also underestimate the likelihood of things potentially going wrong in our lives.

Have you ever heard yourself or someone else say "I'll be able to repay my loan, provided I keep my job, don't get sick and I'm not hit with any large unexpected bills"? Chances are you probably have. but things can and often do go wrong.

Read 'Destress your mortgage'

For more information, contact Rick Maggi at Westmount Financial on 9382 8885.

Rick Maggi Westmount Financial Clear Focus. Better Solutions.

03/02/15: RBA cuts rates by 25bps, shares rally

An 'insurance policy' for growth...

The official cash rate has been reduced to a new record-low of 2.25 per cent after being left on hold at 2.5 per cent since August 2013.

The Reserve Bank’s decision has come as a surprise: a survey of 30 economists and commentators found that 28 expected the cash rate to remain unchanged.

Westpac, NAB and ANZ all subsequently forecast that rates would fall some time in the first half of 2015.

The two survey respondents who predicted today’s cut were Bill Evans, chief economist at Westpac, and Nathan McMullen, head of product and digital at RAMS.

Mr McMullen said that with consumer confidence and inflation low, the Reserve Bank would cut rates to help boost the economy and depreciate the Australian dollar.

Several of the other survey respondents also gave an indication of what forced the Reserve Bank to act, even though they didn’t expect it to happen as early as today.

ME Bank’s general manager of markets, John Caelli, said growth and consumer confidence have been weaker than the board would like.

“Market sentiment has fundamentally shifted over the past two months as oil prices have plummeted and concerns about deflation in Europe grow. This has led to markets expecting 0.50 per cent in rate cuts in the first half of 2015,” Mr Caelli said.

The cut is being seen by many as an 'insurance policy' on growth going forward.

Of course, while this is great news for borrowers, it adds further pressure on investors, particularly retirees, with significant exposure to cash. With that in mind, it will be important for investors in search of a decent yield to be particularly wary of new and wonderful investment products promising higher yields - so please, run it by us before taking the leap!

At the time of writing, the Australian dollar has responded to the rate cut by falling from 0.78 to 0.77, while the local share market has rallied about 1.6%.

Rick Maggi Westmount Financial

05/08/12: Super or the mortgage?

Pay off the mortgage quicker or invest more in your super?

Should clients with the capacity to make more than the minimum repayments on their home loan use the surplus cash-flow to make additional 'concessional' contributions into their super instead? The answer isn't black and white and needs to be discussed in more detail on a case-by-case basis. So if you've always wondered which is the best way to go for you contact us today. Rick Maggi

01/09/11: Spring Newsletter - 1 September 2011

Is saving the new 'black'?

In this issue, we take another look at the debt crisis, the importance of income protection and the public's new found passion for saving and thrift. Read Spring Newsletter