Property transactions involve big bucks – and that makes them a big target for scammers. With large sums of money at stake, we reveal what to look out for, and how to protect yourself from property settlement scams.

Mention ‘scams’ and it’s easy to think of dodgy investment schemes or fake online stores that take your money and never deliver the goods.

But scammers are getting smarter, and this Scams Awareness Week, we’re highlighting the dangers of property settlement scams.

Hopefully it will never happen to you.

But a recent survey found 42% of Australians couldn’t pick the warning signs of a property settlement scam.

Here’s what to look for – and how to stay safe.

What are property settlement scams?

Property settlement scams are one of the most financially devastating forms of cyber-crime in Australia, according to digital property settlement platform, Pexa.

That’s because the scammers target large sums – such as a homebuyer’s deposit.

The Australian Cyber Security Centre (ACSC) explains how the scams commonly work.

It starts with cyber-crooks hacking into the email accounts of real estate agents, conveyancers or even solicitors.

From there, they send fraudulent emails to customers who are in the process of buying a property.

The scammers insert the details of their own bank account for settlement payments to be made to.

Victims assume the payment request is real, and unknowingly send money to the cyber-criminal’s bank account.

The ACSC says these scams can go unnoticed for weeks, often only being picked up when the real estate agent or conveyancer follows up on the missing payment.

Meanwhile, the homebuyer may have lost tens of thousands of dollars, and potentially far more – money that was earmarked to buy a place of their own.

Property scams are becoming harder to detect

As scams become more sophisticated, they are becoming harder to detect, says Pexa.

Adding to the challenge, scammers strike during the final stages of a property purchase – a process many people are unfamiliar with.

So just how difficult is it to spot a scam email?

Harder than you may think.

Four in ten (42%) respondents to a Pexa survey couldn’t detect any scam markers in a simulated email, and a staggering 99% couldn’t spot the use of a fraudulent email address.

That’s because the fakes can be remarkably similar to the real thing.

Red flags to watch for

Several telltale signs may indicate a scam email.

These can include a slightly altered email address, and a change to the bank account details you’re required to deposit money into.

One of the biggest red flags is that you are pressured to pay immediately.

Creating a sense of urgency is a common scam tactic used to scare people into acting fast before they can check if the request is legitimate.

How to protect yourself

Scamwatch advises taking three simple steps to protect you and your money from scammers: Stop. Check. Protect.

Pexa explains how these can work when you’re buying property:

Stop: instead of acting under pressure from a scammer, pause if you receive an unexpected request for money or changes in payment instructions.

Check: verify the payment request independently, either in person or by calling the property professional on a known number. Don’t simply dial the phone number listed at the end of the email – scammers may have inserted their own number there too. These days, many property purchases are facilitated by encryption platforms, so while you’re chatting, check if this is available.

Protect: take Confirmation of Payee warnings by your bank seriously. These let you know if the name of the account you’re sending money to doesn’t match the name you’ve entered.

Need more information?

Rest assured, most homebuyers enjoy smooth sailing with their property purchase.

And we are always keen to explain how the homebuying process works to keep you well-informed.

Call us today for help on your home loan journey.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

While rising prices were the talk of the town not so long ago, the tide has started to turn, with property values beginning to soften – but it’s not all bad news for home owners.

While we’re far from a market collapse, it’s only natural for home owners to be concerned that their valuable asset could be worth slightly less than it was a few months ago.

In fact, national home prices are now 1.8% lower than they were in March, led by falling values in Sydney and Melbourne.

However, there may be an unexpected upside to cooling property prices.

And that’s the possibility that the Reserve Bank of Australia (RBA) may think twice about hiking rates again in the near future.

Here’s what’s happening.

The RBA is watching inflation

The RBA has made no secret of the fact it is aiming for inflation between 2-3%.

The trouble is, we are still a long way from that sweet spot, with inflation currently at 3.8%.

And here’s the thing: “housing” makes up one of the largest single factors contributing to the Consumer Price Index (CPI), which measures inflation.

Now, when it comes to CPI, “housing” doesn’t refer to the sale price or value of existing properties – but those sale prices do have a flow-on effect.

For starters, it’s believed that lower house prices can make home owners feel less financially stable, and in turn, they tend to tighten their belts. And it can have the opposite effect when property prices are running hot.

Additionally, when the property market is doing well, and more homes are being bought, more appliances and furniture are also being purchased – not to mention renovations, extensions and the hiring of tradespeople.

So it makes sense that a fall in property prices may help lower inflation, which could in turn reduce the odds of another rate hike.

This isn’t just a theory.

RBA assistant governor Christopher Kent recently said that softening property market conditions “heavily reduced” the need for further rate rises.

When will home loan rates go down?

We don’t have a crystal ball.

It’s always hard to say with certainty how rates will move in the future.

On one hand, in early August, RBA governor Michele Bullock cautioned that future rate hikes can’t be ruled out if inflation looks like remaining higher for longer.

On the flipside, most of the big banks now expect the next rate move to be down.

The catch?

Even if the banks’ forecasts prove accurate, they aren’t expecting to see the cash rate fall before 2027.

The RBA has also noted that it doesn’t expect inflation to reach its preferred 2-3% target before mid-2027.

For home owners navigating higher rates, that could mean a long wait for any rate relief.

However, you might not have to wait at all

It may be possible to make a rate cut of your own.

Competition among lenders: a strong case for refinancing

Competition in the mortgage market is seeing almost 50 lenders offer variable rates below 6%, Canstar reports.

An owner-occupier who took out a home loan five years ago and who has never renegotiated, is likely to be paying around 6.97%.

If that sounds like you, it’s probably time for a home loan review.

Switching to a lower rate loan could see you save on repayments today, without waiting for the RBA to act.

Call us for a quick home loan health check and to find out if you’re eligible for a more competitive rate.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Great news! Homeowners can breathe a sigh of relief, with the Reserve Bank of Australia (RBA) keeping the cash rate on hold in August. But just because the cash rate is sitting tight, doesn’t mean you have to.

As many as 49 different lenders are now offering variable interest rates starting with a 5, up from 38 at the start of June, according to Canstar.

That’s a powerful incentive to check the rate you’re currently paying.

If your home loan rate isn’t in the very low 6s or below, you could be paying too much.

Here’s why so many lenders are cutting their rates right now – and how you may be able to benefit.

Why are so many lenders cutting their rates?

Demand for home loans has softened in recent months, says credit reporting agency Equifax.

This follows rate rises earlier in the year, coupled with tax reforms relating to investment properties, which have contributed to a slower housing market.

The upshot is that lenders are facing stiff competition in the mortgage market.

And it’s a win for homeowners, with a growing number of lenders sharpening their loan rates as they battle it out for a bigger slice of the home loan pie.

The average loan rate versus a competitive rate

It’s always good to know how your home loan rate shapes up against the broader market.

As a guide, today’s average variable rate is currently 6.92%.

But why settle for average when you may potentially be able to pay less?

Dozens of lenders now offer variable rates below 6.0% – and in some cases as low as 5.69% – according to Canstar.

The rate difference may seem small but it can pack a big punch.

On a mortgage of several hundred thousand dollars, even a small reduction in your loan rate can lower monthly repayments – and deliver big savings over the life of your loan.

The fine print of home loan rates below 6%

Each lender has their own terms and conditions.

However, the common thread when it comes to loans with a variable rate below 6% is that you will usually need a deposit (or existing home equity) worth at least 10%, and more typically 20%, of your home’s value.

Some lenders impose even tighter loan-to-value ratios.

With a number of below 6% loans, you may need a deposit or equity as high as 30%, or even 40%, of your home’s value.

This is why it’s so important to talk to us. We can pinpoint which loans may be suitable for your needs and circumstances.

Why act now?

Homeowners have scored a reprieve from rate hikes – at least until the next rate decision in September.

Even so, the RBA has not ruled out more rate hikes in the future.

If rates do head higher, it could mean a fresh round of belt-tightening.

For instance, a rate rise of just 0.25% could add around $120 to the monthly repayments on an average $735,000 loan.

That’s not exactly loose change.

One smart move for borrowers is to consider preparing for another hike by seeking out a personalised rate cut.

Contact us today to find out if you may be eligible to switch to a lower rate, and start saving on repayments sooner rather than later.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

So it turns out some mortgage offset accounts haven’t been working as intended, according to a recent investigation. Here’s how to check if your home loan offset account has actually been helping you save.

Offset accounts are popular among Australian borrowers, with more than one-in-two (55%) home loans now having an offset.

If that sounds like you, chances are you may be concerned about a recent investigation by the Australian Securities and Investments Commission (ASIC) that identified problems with some offset accounts.

To help relieve any worries you may have, we reveal the banks ASIC reviewed, the main problem areas, and what you can do to be sure your offset account is helping you save on loan interest.

How home loan offsets work

An offset account is an everyday transaction account linked to your home loan.

The offset account typically works like a normal account, letting you make deposits and withdrawals any time.

But instead of earning interest on the offset account, the balance of the account is deducted from – or ‘offset’ against – your mortgage when loan interest is calculated.

For example, if you have $600,000 remaining on your mortgage, and $50,000 sitting in the offset account, loan interest charges will be calculated on $550,000 rather than $600,000.

As your loan repayments stay the same, more of each repayment goes towards paying down the loan, rather than paying interest.

In this way, an offset account can help you clear the home loan slate sooner, and reduce the total interest you pay.

What ASIC found

As a mark of how popular offset home loans are, homeowners currently have around $349.1 billion sitting in offset accounts – a figure that’s risen 28% in the past two years.

This growth prompted ASIC to look at how offset accounts are managed across eight lenders – AMP Bank, ANZ, Commonwealth Bank, Westpac, Macquarie Bank, ING Bank, HSBC and Credit Union Australia (now Great Southern Bank).

Together, these lenders make up about 70% of the mortgage market.

ASIC’s review picked up several issues, but the majority (55%) of issues identified related to unlinked offset accounts.

This is where an offset account was opened, but never linked to the borrower’s home loan.

This means affected borrowers paid more in loan interest than they should have.

Meanwhile, a further 22% of issues identified related to offset accounts not being opened when they should have been.

What are banks doing to fix the problem?

Lenders have already paid over $55 million in customer compensation for offset account failures.

ASIC expects more compensation to be paid following its review.

In addition, ASIC has put all lenders on notice to sharpen their systems, and has warned it will continue to monitor offset accounts.

What can you do?

The ASIC report didn’t say exactly how many home loans were affected by offset account failures, nor did it say which of the eight lenders had the poorest track record.

However, the Australian Banking Association says problems were identified in “just hundreds” of the loans reviewed.

Still, that may be cold comfort if you’re affected.

The good news is that there are simple steps you can – and should – take to check if your offset account is working as it should.

A quick check is especially important if your loan has recently changed.

ASIC found problems with offset accounts were most likely to occur when a homeowner refinanced their loan or came off a fixed rate.

At this point, the link to an offset account can be broken, and you may need to contact your bank to re-set the link.

How to check if your offset account is working

To check if your offset account is linked to your loan, login to your banking app or online banking portal.

Click on your home loan account.

Then look for a section named ‘Manage’, ‘Offset Accounts’, or ‘Account Details’. This should show the account number of your linked account/s.

Or, take a look at your latest home loan statement.

It may display the account number of your linked offset account/s alongside the loan details, or in the section showing how loan interest was calculated.

If you are unsure, contact us and we’ll help you confirm.

We’re here to help

An offset account can help you save on interest.

But it may not be right for everyone.

Call us to decide if an offset account could meet your needs, or if a standard loan may be a more suitable choice.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.