The residential transformation of St Kilda Road is set to continue into with more new apartment plans for the sought-after boulevard.

Wing Tai Asia has lodged plans for a major residential tower at 464-466 St Kilda Road, replacing the former VACC House with an 18-storey mixed-use development designed around a retained heritage podium and a sculpted contemporary tower.

The proposal, prepared under Victoria’s Significant Residential Development with Affordable Housing pathway, would deliver 325 apartments and ground-floor retail across the prominent 4,653 sqm boulevard site in Melbourne’s St Kilda Road North Precinct.

The project centres on the adaptive reuse of the site’s heritage-listed VACC Building, an eight-storey office designed by Bernard Evans that has occupied the address for decades. Planning documents state the development would involve “carefully dismantling and conserving off-site the original metal fabric of the podium visible from St Kilda Road,” before reinstating it as the defining frontage of the new scheme.

Above the restored podium, Wing Tai is proposing a curvilinear residential tower. The scheme includes 172 one-bedroom apartments, 63 two-bedroom apartments, 66 three-bedroom apartments, and 24 four-bedroom apartments, alongside two ground-floor food and beverage tenancies fronting St Kilda Road.

The tower has been designed with substantial articulation and variable setbacks to minimise perceived bulk and maintain view corridors along the boulevard. Urbis, which prepared the planning report, said the design “has been significantly articulated through a curvilinear design” with “an interplay with materials, façade expression and depth” to create visual separation and visual interest.

The proposal also includes 254 basement car spaces, landscaped pedestrian links connecting St Kilda Road and Queens Lane, and a biophilic landscape strategy featuring canopy trees, raised planters, cascading greenery and a glass oculus pool overlooking the eastern frontage.

Planning documents confirm the $270.1 million development will contribute 3 per cent of project costs to the Social Housing Growth Fund as part of the application process.

Wing Tai acquired the St Kilda Road property in 2018 alongside Abacus Property Group for $95.38 million, before later consolidating ownership of the site. The property previously served as the Victorian Automobile Chamber of Commerce headquarters for around 60 years.

The transformation of the St Kilda Rd boulevard is already beginning to materialise, with a number of high-profile projects recently completed, launched, or approaching launch as developers continue to back the long-term appeal of the precinct.

Among the most notable recent completions is Louise by Samuel Property Group, just off the strip on Queens Lane, the same pocket Hirsch &amp; Faigen recently launched The Queensbury. Mirvac is too on the same street with The Albertine, which is approaching completion.

Dexus recently secured approval for its slice of St Kilda Road, while Gurner also has approved plans for the precinct.

Joel Robinson

Wing Tai unveils 325-apartment St Kilda Road tower on former VACC House site

Malaysian developer <a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> is the latest to jump into St Leonards booming Transport Oriented Development precinct.

The developer, which has previously delivered Sapphire by the Gardens apartment development in Melbourne, identified the Atchison Street site in 2023. It filed a Scoping Report around 12 months ago, and now has revealed the designs for the new&nbsp;40-storey mixed-use tower.

The State Significant Development Application covers <a href="https://next-portal.urban.com.au/projects/14650/summary">20-22 Atchison Street</a>, a 1,374 sqm site positioned between St Leonards Station and the new Crows Nest Metro station.

Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the project would deliver 181 apartments, above a four-storey commercial podium, five basement levels, and new public domain works along Mitchell Street. The apartment mix comprises 35 one-bedroom apartments, 39 one-bedroom-plus-study apartments, 85 two-bedroom apartments, and 22 three-bedroom residences.

The proposal has been lodged as a shop-top housing development under the NSW Government’s TOD planning pathway, which allows increased density around key transport infrastructure. The site sits within the recently rezoned Crows Nest Accelerated TOD Precinct.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b799673d-48e2-46b0-801a-0e33a9330100" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20site.png?VersionId=dPh0UfwfaHpbFL1R7H1cbZNbIW0CHbCC" />

SP Setia acquired the Atchison Street site as part of its continued expansion into the Australian apartment market. In comments made to City &amp; Country (The Edge Malaysia) in 2023, SP Setia President and CEO Datuk Choong Kai Wai described the acquisition as “a strategic move” aligned with the group’s post-pandemic market recovery strategy.

“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.

The tower has been designed as a slender vertical form rising from a mixed-use podium, with COX Architecture positioning the development as a response to the evolving St Leonards and Crows Nest skyline.

“The purpose of the project is to facilitate the delivery of high-quality housing at a strategically located site and deliver a built tower outcome that is consistent with the desired future character of St Leonards and aligns with the TOD controls,” the design report stated.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b1a85eee-76f7-436c-a6da-73ba827b9b13" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20entry.png?VersionId=dA9jHGPMcm.dDbwk4QfxqWiY5bfh3UVt" />

The podium would incorporate retail uses fronting Atchison Street, commercial tenancies, landscaped communal areas, and pedestrian improvements along Mitchell Street. Vehicle access and loading would be consolidated via Atchison Lane.

Residents would have access to more than 665 sqm of communal indoor and outdoor spaces, while the development proposes 96 parking spaces across five basement levels.

The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.

COX said the tower form responds directly to the emerging high-density character of the precinct while seeking to maximise solar access, cross ventilation, and outlook from apartments.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="2163f85c-f63b-4be3-aafa-f8763976cec5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_5.png?VersionId=WiAmtIKJ6.ZQ41EtYEQ1fol7AeorKBlL" />

“The building is orientated towards north,” the Apartment Design Guide compliance report noted, adding that the tower’s slim form was driven by the constrained inner-urban site dimensions.

The design also incorporates landscaped setbacks and communal open space at podium level, intended to soften the interface with surrounding streets and improve pedestrian amenity.

The project adds to a growing wave of redevelopment proposals reshaping St Leonards and Crows Nest following the opening of the Sydney Metro City line and the NSW Government’s push for higher-density housing around major transport nodes.

Last week Stockland filed plans just down the road. They want to build a <a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">52-storey tower on Pacific Highway</a>.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">First look: Stockland plans 52-storey, 538-apartment St Leonards tower&nbsp;</a>

First look: SP Setia targets St Leonards skyline with 40-storey TOD tower

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has revealed plans for a new mixed-use tower at 10 Dangar Street, Wickham, advancing a proposal that would reshape the southern gateway to Newcastle’s city centre with one of the city’s tallest residential buildings.

The State Significant Development proposal, now on exhibition, seeks approval for a <a href="https://www.apartments.com.au/new-apartments/bowline-10-dangar-street-wickham-nsw-2293">43-storey tower</a> immediately adjacent to the Newcastle Interchange. The project would deliver around 200 apartments, including 42 affordable housing dwellings, alongside 99 co-living units, a 171-room hotel, retail space, and new public domain integrated through the site.

The scheme marks a significant escalation of plans previously approved for the site. Urban Property Group took over the prominent 2,904 sqm parcel, where excavation and demolition had already commenced under an earlier consent for a 14-storey mixed-use development.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="58a96dd9-407f-4d20-86b4-94e4bfeef74b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20podium.png?VersionId=LGlf08pdFGAZDzvx_CXC4XakHNZRuEE0" />

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, the tower has been conceived as a landmark transit-oriented development anchored to the Newcastle Interchange precinct. The proposal includes 245 build-to-sell apartments across a mix of one, two, and three-bedroom residences, as well as two penthouses. Fifteen apartments and one operational unit are earmarked for NDIS housing. The co-living component would add a further 99 units, while the podium would accommodate retail uses and hotel facilities.

SJB said the site presents “a valuable opportunity to anchor the precinct by setting the standard for design, active ground planes and character at the key southern gateway.”

The architecture responds directly to the site’s position beside major transport infrastructure and within one of Newcastle’s fastest-evolving urban renewal precincts. The tower form sits above a sculpted podium designed to frame new public spaces, including a through-site pedestrian link connecting Station Street to Hannell Street, landscaped plazas, and activated retail edges.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="a7bd6ff0-f7db-4ce8-a6dc-ea56e72c6149" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20lanne.png?VersionId=xzf39VADyhj7zBQY2I9fx9vI62u2tuSb" />

The design report describes the project as part of the broader transition of Wickham into “a vibrant, high-quality mixed-use urban precinct” that leverages proximity to the station, open space, and regional connectivity.

A detailed public art strategy has also been prepared for the development. The strategy positions the project as “a transit-oriented development of state significance at the gateway to Newcastle’s city centre” and outlines a series of integrated artworks responding to Newcastle’s industrial and transport heritage.

Creative Road’s curatorial framework for the project, titled Unveil, draws on “stratified surfaces, carved volumes, and light-filled apertures” while referencing Newcastle’s transformation from an industrial city into a contemporary education and technology hub.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="77a882bb-14b1-4d28-99ff-9438e39508c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20site.png?VersionId=cevgo_vN0eKPK78P8YcEu3mKPLkpFqE7" />

The proposal is being advanced through the NSW Housing Delivery Authority pathway after being declared State Significant Development in June 2025. The accompanying scoping report states the development aims to “maximise the site’s proximity to the Newcastle Interchange by delivering transit-oriented development” while increasing housing supply and affordable housing provision within the Newcastle LGA.

Urban Property Group’s plans align with the long-term strategic vision established under the Wickham Master Plan, which identified the interchange precinct as suitable for substantial uplift in height and density. The current proposal would significantly intensify that vision, positioning the tower among the tallest developments proposed for Newcastle.

The site sits immediately north of the Newcastle Interchange, bounded by Dangar Street, Hannell Street, and Charles Street. It is surrounded by a rapidly growing cluster of residential towers and mixed-use projects that have emerged following the completion of the light rail and transport interchange.

First look: Urban Property Group unveils Newcastle’s latest tower at Wickham interchange

Bottega House has completed settlement of a landmark riverfront site in Macquarie Street, St Lucia, representing its first major Brisbane development.&nbsp;

Positioned on the banks of the Brisbane River, the <a href="https://www.apartments.com.au/new-apartments/180-macquarie-street-st-lucia-qld-4067">premium site at 180 Macquarie Street</a> features uninterrupted river frontage in one of Brisbane’s most tightly held residential precincts.&nbsp;

The proposed development, currently under assessment with Brisbane City Council, has been designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and will deliver a boutique collection of premium residences positioned specifically for owner occupiers and downsizers.&nbsp;

The residences are set to redefine luxury apartment living in the area, with a focus on architectural quality, refined finishes, landscape integration and elevated amenities including curated wellness facilities, resort-style pools and recreation spaces rarely seen in the local market.&nbsp;

Exclusive sales for the project will be led by Keenan &amp; Byrne, ahead of an anticipated launch later this year.&nbsp;

Bottega House Managing Director Nick Malloch said the project reflects the group’s ambition to deliver a highly curated residential offering within one of Brisbane’s most tightly held precincts.&nbsp;

“This is an incredibly rare riverfront opportunity and one we have approached with a long-term perspective,” Malloch said.&nbsp;

“Our vision from the outset was to create a boutique collection of residences that feel more like private homes than traditional apartments, with generous proportions, refined finishes and exceptional amenity throughout."

Malloch says there is a&nbsp;lack of premium owner-occupier stock of this quality in the market, particularly for downsizers wanting space, privacy and a true lifestyle offering without compromise.&nbsp;

"Demand is expected to be strong given the scarcity of premium riverfront opportunities of this nature within Brisbane’s inner-west."&nbsp;

Bottega House secures landmark riverfront site in St Lucia 

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The arrival of the first piling rig officially marks the commencement of construction at SIERA’s new beachside apartment development, Exhale, in Northcliffe.

<a href="https://www.apartments.com.au/new-apartments/exhale-surfers-paradise-8-enderley-avenue-surfers-paradise-qld-4217">Exhale</a>, a glass-encased tower featuring 54 large-scale apartments at 8 Enderley Avenue, is SIERA’s third Gold Coast development. It follows the recently completed PIPIS Bilinga beachfront project, which achieved suburb-record prices, and the soon-to-be-completed Chevron Island development, Tapestry.

[smartcode_project:default project_id=112661 project_image_fid=359603]

<a href="https://www.apartments.com.au/developers/siera">SIERA</a> Founder and Managing Director Brent Thompson said the arrival of the piling rig represented a significant milestone for the development, which is scheduled for completion in late 2028.

Over the next month, around 260 piles are expected to be installed as work progresses on the basement structure. The building is anticipated to rise above ground level early next year, before unveiling its sculptural glass curtain wall, developed in collaboration with specialist façade engineers.

“The façade was designed to maximise panoramic coastal views while creating a distinctive architectural identity,” Thompson said.

[smartcode_project:default project_id=112661 project_image_fid=355935]

Designed by BDA Architecture, Exhale will comprise just 54 two- and three-bedroom residences across 26 levels, a level of low-density living rarely delivered in this beachside pocket between Surfers Paradise and Broadbeach.

The project has been conceived as a resident-only building, with no short-stay accommodation permitted. SIERA says the model is intended to appeal to long-term owner-occupiers rather than transient holiday demand.

[smartcode_project:default project_id=112661 project_image_fid=361052]

Residences have been designed with large-format layouts and expansive glazing, with most apartments featuring more than 30 metres of glass frontage to maximise natural light and ocean views.

The amenity offering spans two levels and centres on wellness and lifestyle, including a heated magnesium pool, sauna, yoga and Pilates studio, gymnasium, private dining facilities, cinema lounge, and dedicated surfcraft storage.

[smartcode_project:default project_id=112661 project_image_fid=359607]

More than half of the apartments have already sold. SIERA has also opened a sales gallery for Exhale at its Chevron Island commercial premises, near its Tapestry tower and the site of its second Chevron Island apartment development, which is slated to launch in early 2027.
</section>
</section>

[smartcode_project_cta:default project_id=112661]

SIERA kicks off construction at Northcliffe tower Exhale

Home Loans

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Finance commitments are on the rise for those buying new homes, and it appears that first home buyers are making themselves seen again with the second consecutive rise now being recorded, according to Australian Bureau of Statistics data.
Master Builders Australia chief economist Peter Jones pointed to the 2.2% seasonally adjusted rise as something that will “inspire continuing confidence” in residential building.
“The latest housing finance data for June also means that the rate of growth is up 10% seasonally adjusted through the year,” said Jones.
“First home buyer commitments rose for the second consecutive month, a positive sign for the industry that may herald a continuing return of first home buyers to the market,” he said.
Meanwhile, Housing Industry Association economist Diwa Hopkins said that this follows significant declines in the December and March quarters, but that the June 2014 quarter is now recording an uptick – at a modest 1% pace.
“Over the full 2013/14 fiscal year new home lending increased by 12%. With lending rates remaining very low, turnover in the established home market has risen, as have home prices. The residential construction industry has responded strongly to these signals,” she said.
“In terms of new home lending being a leading indicator of residential building, today’s housing finance figures suggest home building activity should continue its strong recovery as we progress through the second half of the year.”
However, CommSec chief economist Craig James pointed to loans for new home building hitting a four year high, with first time buyers lifting to 13.2%, and also noted that the number of owner occupier commitments generally was up by 0.2% in June, but the value increased by 1.8%. He noted that this was the biggest rise in seven months.
First home buyers’ loan commitments are still below the long-term average of 20%. Across Australia, the average home loan was $327,000, or 7.4% up on one year prior.
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Loans to new homes on a high, first home buyers re-emerging

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With yesterday’s decision to keep rates on hold coming as little surprise, industry groups are now turning their attention to banks and lenders.
Over the past fortnight, 71 home loans with a five-year fixed rate term have had their interest rates cut by up to 0.80%, according to RateCity research.
Unsurprisingly, this is becoming of greater interest to borrowers as <a href="/expert-insights/finance/a-year-of-record-low-rates-as-rba-leaves-cash-rate-at-2-5">lenders increasingly move out of the RBA’s cycle that has been stable for 12 months now at 2.5%</a>.
Despite much of the RBA talk discussing the next potential increase, <a href="/expert-insights/finance/start-planning-for-a-rate-rise-finder-com-au">most industry members wholeheartedly agreeing that we’ve hit the trough</a> despite disagreements about when we will see a rise. Responses yesterday to the next month of stability mirrored 1300HomeLoan’s sentiments that <a href="/expert-insights/finance/more-discounting-from-lenders-on-the-horizon-1300homeloan">more cuts are coming, not necessarily form the RBA, but from the lenders</a>.
“The home loan customer is in a strong negotiating position and your lender will be keen to listen, particularly if you raise the possibility of looking elsewhere,” 1300HomeLoan managing director John Kolenda said.
“We are seeing some of the lowest fixed rates ever and there’s also good deals being offered on variable rates.”
“The borrowing costs for banks in the global market have fallen and they are in a position to offer highly competitive home loan products.”
Meanwhile, CEO of RateCity Alex Parsons said that those dropping rates at the moment includes three of the big four banks.
“Five-year fixed rates have come down by 0.54 percentage points on average in two weeks – that’s more than we’d typically see passed down by the RBA in any given month,” said Parsons.
“My advice is if your home loan rate starts with a five then get out there and find a better rate – 4.99% is a sharp rate and gives consumers a great amount of certainty over a long period of time in a cycle whereby most people would assume that interest rates are going to go up over time and not further down,” he said.
Loan Market director Mark De Martino was also pointing out the heavy competition, noting that there are drops across three, four and five-year fixed term products.
Despite this, the warnings are starting to emerge from all quarters.
“A couple years ago, I doubt anyone would have thought you could have got a fixed rate below five per cent for five years. While it’s certainly an attractive rate now, there’s wider implications borrowers need to consider before they take up fixed rates,” De Martino said.
“Whilst fixed rates do not move up and down in sync with the cash rate they are indicative of what lenders think it’s going to cost to borrow money in the future - seeing so many move rates down is further evidence to support the perception that interest rates may remain low for quite some time,” he said.
Meanwhile, Parsons warned that borrowers must ensure that they can withstand a 2% increase in rates and afford the repayments, even in times of “cheap money”.
“That’s something people really need to understand so they don’t find themselves in mortgage stress when rates eventually do increase,” he said.
The Real Estate Institute of New South Wales president Malcolm Gunning was also putting borrowers onto the alert.
“While these record low interest rates have been welcomed by consumers, we must once again caution mortgage holders that the fairytale will eventually end. It is important not to over-commit yourself and be prepared for future rate rises,” he said.
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Attention shifts from RBA to lenders: 71 five-year fixed loans cut in a fortnight

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Lenders are expected to discount their rates further in coming months, according to 1300HomeLoan managing director John Kolenda.
With interest rates still at significant lows, there’s competition in the market between the lenders that may spur on further discounts for current and new mortgage holders.
“We are seeing some of the lowest fixed rates ever and there’s also good deals being offered on variable rates,” said Kolenda.
“This is an environment which offers potential wins for the home loan customer prepared to shop around for a better deal.”
He noted that the borrowing costs for banks in the global market have fallen, leaving them well placed to offer competitive home loan products.
“The home loan customer is in a strong negotiating position and your lender will be keen to listen, particularly if you raise the possibility of looking elsewhere,” he said.
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More discounting from lenders on the horizon: 1300HomeLoan

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The Reserve Bank of Australia publishes a number of different indicator lending rates each month.
These include indicator rates for home loans issued by banks and mortgage managers, as well as personal loans and loans to large and small businesses.
Indicator rates for home lending are published for standard variable loans from banks and mortgage managers; discount variable loans from banks; basic variable rate loans from mortgage managers and three-year fixed interest rate loans from banks.
As the chart below shows, of the variable interest rates offered by lending institutions standard variable loans offered by banks generally have the highest indicator lending rate. Mortgage managers’ standard variable rate loans are next highest, followed by banks’ discount variable rate loans, with mortgage managers’ basic variable rate loans having the lowest interest rates.
Chart 1: Indicator lending rates over the decade 2004-2014
<img src="/images/2014/08/01/rba-chart-aug-1.gif" alt=""> 
Source: Property Observer using RBA data
Canstar research manager Mitchell Watson says lenders use the standard variable indicator rate as a reference rate when issuing discounts on mortgages to customers.
Few people pay the standard variable indicator rate. Most consumers will pay around 0.7 percentage points less than that rate, either through a packaged loan which offers a discount rate, or through a basic home loan, Watson says.
Consumers interested in home lending rates should look at the RBA’s indicator rates for bank discount variable loans, mortgage managers’ basic variable loans and bank three year fixed rate loans when comparing products.
“What they provide is an indication of the type of interest rates that you should be looking for,” Watson says. “That should be a benchmark if you are researching or looking to take out a home loan.”
Lenders offer two main types of variable-rate mortgage products: basic loans and packaged loans.
“A basic home loan is a product that doesn’t have all the bells and whistles. It may not have an offset account and if you want to access certain features it might cost to do that,” Watson says.
“A discount [variable rate mortgage] will have an offset account and all the bells and whistles but also attract a higher annual fee.”
The rates the RBA publishes are an average. Watson says there will be lower rates available, so it pays to shop around.
Fully featured discount variable rate loans tend to be slightly more expensive than basic home loans, but that is not always the case. During the financial crisis the indicator rate for home loans from banks briefly fell below the indicator lending rate for mortgage managers’ basic variable loans (see chart below).
Chart 2: Detail from Chart 1
<img src="/images/2014/08/01/rba-chart-aug-1-two.gif" alt="">
 
Source: Property Observer using RBA data (detail from Chart 1)
Watson says that was most likely due to interest rate cuts at the time being passed on more quickly on discount variable rate loans than on mortgage manager basic rate loans.
While movements in the RBA’s cash rate direct mortgage interest rate changes to some extent, lenders often lower or raise the mortgage rates they offer on their products independently of the RBA’s interest rate movements.
In late July, the country’s biggest banks cut rates on five-year fixed mortgages, despite there being no change from the RBA.
The Commonwealth Bank, National Australia Bank and Westpac all cut five-year fixed rate loans to less than 5%. NAB also cut its four-year to 4.99% and its three-year loan to 4.94%.
Smaller lenders followed quickly. Last week, St George cut its rates to 4.99% for four and five year loans under its Advantage package. ME Bank and RAMS also dropped their fixed rates below 5%.
Watson says the banks have been able to offer lower rates to customers as their lending costs – which are determined by factors such as the outlook for the RBA cash rate – have fallen.
Finder.com.au money expert Michelle Hutchison says in the past, when lenders lowered the rates on their fixed loan products, it was a good indication that variable rates would soon be cut too. But now, most interest rate experts believe the next rate movement will be up, according to Finder.com.au’s monthly survey of economists.
The recent mortgage rate cuts are likely to be part of a competitive push by lenders to lock in customers for a longer period of time, Hutchison says.
“The longer the bank can lock you in to a home loan the better it is for the bank,” she says. “Often fixed home loans have limitations and caps on how much you can repay in lump sums. Also, there are break costs if you want to break within the fixed period so if you fix the loan as a borrower you are likely to stay in that loan for at least that fixed period.”
Consumers can more easily change mortgage products than in the past due to the banning of early exit fees on variable rate mortgages in 2011, Hutchison says. That has encouraged banks to take steps, such as offering very low five-year fixed rates, to lock in customers.
Finder.com.au has calculated that with the average variable rate at around 5.5%, the low five-year rates available will offer considerable savings to many borrowers. According to their calculations, variable rates would need to be cut by 25 basis points every six months for the next four and a half years before rising again – a total of 125 percentage points of cuts – for a variable rate mortgage to cost less than the fixed rate loans.
But five-year fixed rate loans will not suit everybody, Watson says.
“The big thing to consider is the term. Understand that big changes in your financial situation might have an impact on what’s the best term for you. If you are looking to upgrade in four years time, a five-year fixed term may not suit you due to break costs,” Watson says.
People who wish to repay a fixed-rate loan in full before the end of the term typically have to pay a fee called a break cost. This can be very high depending on factor such as how much of the term is left to run.
Fixed rate loans also tend to have fewer features than variable rate loans, although Watson says fixed rate mortgages with offset accounts and facilities to allow extra repayments are becoming more common. CUA, Mortgage House and ANZ for example, have fixed rate loans with some of the same features traditionally offered only by a variable rate loan.
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What the RBA's indicator rates can tell you about your home loan

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When it comes to buying your first home, there are many daunting tasks to tackle. One of those tasks is securing your first home loan.
Before you’ve found your dream home, start looking for your dream mortgage. Without finance, there's no purchase - so make sure you get it right.
Choosing your first home loan
Fixed or variable? Packaged or unpackaged? A big lender or a small one?
To pick your home loan, there are three main things to think about:
<ol>
<li>Your priorities</li>
<li>Where rates will move</li>
<li>The products</li>
</ol>
To navigate the myriad mortgage products on the market, you need to have your priorities clear. It's rare that one deal will be clearly better than all the others - instead, it's all about what's best for you.
You may be after low ongoing fees. Perhaps security against future rate hikes may appeal to you, or maybe you're more interested in capitalising on the next rate cut.
Firstly, remember that a mortgage is a long term commitment. It's incredibly unlikely that your life circumstances will stay constant over your entire mortgage term. Think realistically about how your life might change over the next five or 10 years - you might have ongoing health concerns that will make rate repayments harder, or go from a double income household to a single one. A new addition to the family will seriously change your finances, as will a career change.
Figuring out your priorities doesn't just mean figuring out your priorities for today. It means figuring out what your priorities will be a decade down the track.
With a variable loan, your interest rate will change each month, according to how your bank responds to changes in the Reserve Bank's overnight cash rate. With a fixed loan, you lock in a single rate for a set number of years - anywhere between two and 10. Your choice will be in large part informed by your personality and your priorities - some are more comfortable with variance than others.
As <a href="/expert-insights/finance/weighing-up-fixed-vs-variable-interest-rates-mark-bouris">Mark Bouris writes</a>, both fixed and variable options come with their own risks. Pick a variable loan, and you'll be paying more when the Reserve Bank increases the cash rate. Go with fixed, and you'll miss out on any rate cuts.
While nobody knows for sure which way rates will move, we're currently at a record low cash rate of 2.5%. For some, this <a href="/expert-insights/finance/analysis-is-it-worth-fixing-your-home-loan">means that fixing is a better option</a>, financially speaking, as many expect the only way for rates to move is up. Fixed products will also make it easier for you to budget, as you'll know exactly how much money you need to put towards your mortgage each month.
However, <a href="/expert-insights/finance/variable-rates-remain-the-loan-product-of-choice">75.34% of all home loans written up in June</a> were variable, perhaps due to the generally lower rates offered on variable loans than fixed ones.
And of course, it's not just the rate that matters, but the product and the bank's conditions. Often, fixed rate loans do not allow you to make extra repayments on the months that you have a bit of spare cash, or will charge you a fee to do so. You may also face a "break fee" if you sell your house before the end of the term and repay the entire loan, or if you change your loan.
The Consumer Action Law Centre recommends that borrowers <a href="/expert-insights/buying/consider-opt-out-costs-when-getting-a-loan-consumer-action-law-centre">consider their opt out fees upfront</a>, rather than waiting until your circumstances change.
There's also the option to split your loan type, with a partially fixed loan. For example, if you know your budget is generally likely to be tight but that you occasionally get substantial injections of cash, from bonuses or short term contract work, you may want to choose a 50% variable and 50% fixed loan which limits your exposure to future rate hikes but still allows you to make extra repayments occasionally.
Of course, there's more to picking a home loan than just picking the type. There are also lenders, packages, fees and discounts to consider. Online comparison websites like <a href="https://finder.com.au" target="_blank">finder.com.au</a> can help with this task.
This article continues on the next page. Please click below.
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But if you're struggling to sort out what is best for you, it might be time to bring in some help.
Mortgage brokers
A mortgage broker is someone who specialises in home loans and will negotiate with lenders on your behalf to arrange your loan. A good mortgage broker will help you select the best loan and secure it with your lender. But be careful - a mortgage broker often receives broker's fees or commissions by credit providers, which can influence what loan they recommend to you. So even if you do use a broker, you should still shop around for the right loan - and the right broker.
Questions you should always ask your broker:
(For more on this topic, <a href="/expert-insights/finance/five-questions-you-must-ask-your-mortgage-broker">click here</a>)
<ol>
<li>How do you get paid? Unfortunately, a broker will not always act in your best interest. Determining where they get their money from may help you identify any conflicts of interest. 
</li>
<li>Who is on your lending panel? If your broker only has access to loan information from a few banks or lenders, you're not getting the full picture and could miss out on a good deal. If you know of lenders they don't, do some independent research. 
</li>
<li>What is your average client like? Make sure you get a broker that specialises or at least has a good deal of experience with first home buyers - long term investors will have very different needs. 
</li>
<li>What are your license details? Your broker should have an Australian Credit License, with their number displayed on official paperwork. Don't be afraid to google them and ask about professional indemnity insurance in case anything goes wrong. 
</li>
<li>What are some difficult deals you've pulled off? Your mortgage broker should be open and honest about their previous dealings - remember, they're there to help you, so make sure you're going with someone with experience and confidence.</li>
</ol>
Knowing what you can afford
A large part of picking the right home loan is about knowing what you can afford. You might have saved up enough to make a 10% deposit on a $500,000 home, but that doesn't mean you can afford to make the monthly repayments on a $450,000 loan. There are a number of calculators available to you, <a href="/expert-insights/buying/six-handy-apps-for-first-home-buyers">including apps</a> like tapMortgage and Approve Me.
tapMortgage can help you calculate your stamp duty, transfer fees, first home concessions and mortgage repayments. You can sort out the potential savings you would make with different repayment schemes or the total interest you'll pay on your loan. Approve Me is another app which can help you decide whether you can afford your prospective loan repayments. It even has a process for obtaining home loan pre-approval.
Knowing what you can afford is the most important part of choosing your first home loan. While many decide on how much they have for a deposit, the area they'd like to live in and even the kind of home they want before thinking about their mortgage, many experts recommend figuring out how much you can afford to pay each month before considering any of the more glamorous aspects of buying your first home.
Once you think you know what kind of loan suits you best, and you've gotten an idea of the kind of property you're after, it may be worth getting a <a href="/expert-insights/finance/a-quick-guide-to-home-loan-pre-approval">mortgage pre-approval</a>. While it's not a watertight guarantee you'll be approved for the loan of your choice, it's your best bet.
Running into trouble
No matter how well you prepare, there's always the risk of something going wrong. Unexpected costs and events can severely hamper your ability to repay your loan. If you think you're at <a href="/news/vic/victoria-s-mortgage-delinquency-on-the-rise-how-you-can-stay-above-water">risk of default</a>, here's what you can do: 
<ol>
<li>Communicate with your lender. Don't think your lender just won't notice if you stop making your loan repayments. Be clear with them about what's happening - they may be able to stop the process that will end in you defaulting on your loan and getting evicted from your home. 
</li>
<li>Enquire about hardship variations A hardship variation is an amendment to the terms of your loan contract which may temporarily make your loan more affordable by decreasing your monthly repayments but increasing your overall loan term. For new loans, you should be able to apply for a hardship variation no matter what your loan size is. If they don't approve your hardship variation application, your lender must provide a reason. 
</li>
<li>Check your insurance Depending on the reason for your default - loss of income, a health issue or a sudden death in the family, you may be able to claim cover that will assist you in paying off your loan. 
</li>
<li>Consolidate and refinance Be wary of refinancing your loan to reduce your payments - like with a hardship variation, this is likely to only be a short term fix. Beware of hidden costs and fees. 
</li>
<li>Selling or renting If you absolutely can't continue to repay your home, you may have to consider selling your property to pay off your loan. This is a long term fix, with its own major costs. You may also face extra fees for breaking your loan contract early. If you have alternative accommodation available - a parent's house, for example, you may consider moving back there temporarily and renting out your house. Again, this comes with its own costs, like the expense associated with hiring a property manager. 
</li>
<li>Seek help If you run into financial trouble, you're not on your own. There are free and low cost services available to help those under financial stress, like financial counsellors and legal advisors.</li>
</ol>
Of course, the best way to avoid running into trouble with your first loan is to plan ahead carefully and choose wisely in the first place. Be honest with yourself about your payment abilities, and consider your mortgage as carefully as you're considering your first home purchase.
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jrichardson-uRX5hFdKfN

Getting your first loan? Here's what you need to know

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Rams and ME Bank have both cut the interest rates on their fixed home loan products.
Following <a href="/expert-insights/finance/nab-and-westpac-meet-cbas-rate-cut">rate cuts by Commonwealth, NAB and Westpac</a> last week, the two smaller lenders have also dropped their rates, with ME Bank undercutting them all on its five year fixed rate loan.
ME Bank now offers its five-year fixed home loan at a 4.94% interest rate, a 45 basis point cut. They have also cut their three year fixed loan interest rate to 4.69%. According to ME Bank, they are the lowest rates offered for three and five year fixed home loans on the market.
Chief executive Jamie McPhee said ME Bank's rates are better than those offered by the big four banks.
“And borrowers don’t need to pay an extra package fee to get the lower rate – we’re offering 4.94% on our non-package five year fixed home loan," said McPhee.
“Our three year fixed rate has been under 5% for more than 18 months and at a record low of 4.69% since April 2014.
He advised borrowers to fix their home loans, "with variable rates not expected to go much lower - we’re either at or very close to the bottom of the current interest rate cycle”.
ME Bank's rates are available to members of eligible super funds and unions.
Rams cut the rates on their two, three, four, five and ten year fixed home loan rates. Their five year fixed loan product is now offered at 5.19% per annum.
How ME Bank and Rams stack up next to the big four on five year fixed loans: 
<table style="width: 460px;" border="0"><tbody>
<tr>
<td>Bank</td>
<td>Rate</td>
<td>Comparison Rate</td>
</tr>
<tr>
<td>ME Bank</td>
<td>4.94%</td>
<td>5.21%</td>
</tr>
<tr>
<td>Rams</td>
<td>5.19%</td>
<td>5.71%</td>
</tr>
<tr>
<td>ANZ</td>
<td>5.64%</td>
<td>5.86%</td>
</tr>
<tr>
<td>NAB (Choice package)</td>
<td>4.99%</td>
<td>5.56%</td>
</tr>
<tr>
<td>CBA</td>
<td>4.99%</td>
<td>5.62%</td>
</tr>
<tr>
<td>Westpac (Premier advantage package)</td>
<td>4.99%</td>
<td>5.52%</td>
</tr>
</tbody></table>
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Rams and ME Bank cut fixed year rates: How do they stack up against the big four?

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When getting a home loan, particularly with the current tempting low fixed term interest rates on offer, the Consumer Action Law Centre has advised borrowers to consider their opt out fees upfront, as well as the long-term outlook.
Penelope Hill, manager of Consumer Action’s MoneyHelp service, has said that the banks are clearly looking for business, but warned that mortgages are long-term financial products.
While low fixed rates might seem good, if the market changes over the next five years they could face much higher rates at the end of the period that they are not prepared for. Similarly, redundancy, injury, illness and relationship breakdown should also be taken into account.
“Some people like knowing what they’ll be paying a few years in advance – it provides certainty and helps them plan ahead. But as part of that planning they should look at how they would cope with a change in the market or with a drop in income,” said Hill.
Similarly, she warned that sometimes banks fail to explain to new borrowers on fixed-terms that early repayment fees can be charged if they end their loan prior to the expiry of the fixed rate period.
“Unexpected charges can have a significant impact. Consumers should look beyond the headline interest rate and consider the terms and conditions of contract. Do they suit your needs? Are they flexible enough? What would it cost to break the agreement?
“Optimism is a great character trait, but when you’re shopping for a mortgage it pays to temper that optimism and think about a contingency plan,” she said.
She also warned banks and lenders of their obligation to lend responsibly, saying that they must ensure they meet borrowers’ needs and do not cause undue hardship. This includes factoring in the prospect of rate changes.
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Consider opt out costs when getting a loan: Consumer Action Law Centre

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Figures from NAB confirm its customers ­continue to maintain previous ­payments and pay down debt faster during the current low interest rate period.
Customers paying back more than the minimum are ahead by an average of 13 months, compared with 12 months a year earlier, NAB told the Australian Financial Review.
NAB has about 16% of the mortgage market.
Owner-occupiers accounted for 70% of customers who were ahead, with 16% of investors and 14% being first home buyers.
The NAB executive general manager of lending and deposits, Antony Cahill, said the figures showed customers were taking advantage of record low interest rates by putting away extra income.
“These are themes that point to the Australian consumer being a little bit more careful, a little bit more prudent in terms of understanding debt and ensuring they keep that under control,” he told Fairfax Media.
NAB also said consumers were paying off credit card debt faster, with accounts paid in full up 6% in the last year.
Of the loans that were ahead on payments, 32% are held in Victoria, followed by 31% in New South Wales and 21% in Queensland. 
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jchancellor-FAypfDUnLy

NAB home loan borrowers' payments typically ahead by 13 months

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Home loan borrowers are increasingly heading to smaller banks, moving market share away from the major banks over the 12 months to May 2014, according to RateCity data.
They have recorded a 0.37% market share drop for ANZ, Commonwealth Bank, NAB and Westpac collectively, based on APRA data.
With <a href="/expert-insights/finance/nab-and-westpac-meet-cbas-rate-cut">CBA, NAB and Westpac announcing cuts to some of their fixed rates</a>, CEO of RateCity, Alex Parsons, says that they’re competing aggressively to bring back new borrowers.
“The latest salvo in the competition war, this is the first time we’ve seen the big banks move rates under the 5% mark for five-year fixed term home loans,” said Parsons.
“While there has been plenty of action as low as 3.99% on one- and two-year terms, the five year category has not historically seen this level of competition.”
Of course, the major banks are still the dominant players in the home loans market – making up an incredible 84.6%.
Parsons says that despite this, consumers’ brand loyalty is reducing and they’re more keen to shop around. 
“People are getting smarter with their money and, as cost of living pressures bite, realising that paying a higher rate is a waste of money,” he said.
“This latest round of rate cutting is evidence that the majors are starting to feel the pinch of the shift in the market and are having to meet the market. The real winners from this competition will be consumers who will be able to materially reduce their costs of borrowing if they understand and compare the different offerings in the market.”
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Big four banks’ collective market share drops in year to May: RateCity

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Yesterday, the Commonwealth Bank cut its five-year fixed mortgage rate by 70 basis points to 4.99%, prompting cuts from competitors NAB and Westpac.
It's a record low for the bank. As <a href="/expert-insights/finance/competitive-cba-cuts-five-year-rate-to-record-low-as-inflation-quickens">Jonathan Chancellor reports</a>, Westpac and NAB matched the Commonwealth Bank's rate within a few hours. 
Westpac's 0.80% cut only comes into effect on July 28. Their offer includes a discount of 0.2% under the bank's Premier Advantage Package. It will be available to both new and existing customers for a limited time.
NAB dropped its five-year fixed rate by 70 basis points, matching the Commonwealth Bank's 4.99% rate. The new rate will be available from tomorrow. It also cut rates on its three and four-year fixed rate home loans, with a 4.99% rate for its four-year product and 4.94% rate for its three year fixed rate loan. 
ANZ is the only of the "big four" banks to hold the interest rate on its five-year fixed rate loan after yesterday's Consumer Price Index figures were released. Its offers a 5.94% rate on the product. Michelle Hutchison of rate comparison website Finder.com.au says those worried about potential interest rate rises should consider adopting a fixed loan while rate remain competitive.
"Long-term fixed rates such as five-year terms are riskier than shorter terms for one or two years because you have potentially more to lose because you're betting over a longer period of time," said Hutchison. However, she warns borrowers against taking up a loan purely because of a low interest rate.
"It's great to see the big banks dropping their rates and being more competitive but borrowers need to look into all the conditions and details before jumping into a fixed home loan. For instance, Commonwealth Bank's five-year fixed rate of 4.99% must be taken out in their packaged deal which means it has an annual fee and you need to open other accounts with the bank too," she says.
"The problem with fixing your home loan right now is that there's a chance more lenders will follow the major banks' lead and drop their five-year fixed rates even further so borrowers could miss out on even bigger savings. 
"Borrowers are also betting on their fixed rate staying below variable rates for most of the next five years. But fixing brings reassurance that your mortgage repayments won't move which can be worthwhile if you're budget is tight or you're planning to have a reduced income for starting a family or going overseas in the next few years," Hutchison explains.
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