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With cash rates set to rise in the near future, a real estate boss believes accountants should start advising clients to pay down their mortgages more aggressively.
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Get aggressive with mortgage payments, says real estate boss
21 December 2018
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7 minute read
Speaking to Accountants Daily, Starr Partners chief executive Doug Driscoll believes the market is “precariously poised” and any rate rise could catch out overstretched property owners.
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“One thing that is undeniable over the last five years, is that there are a number of people out there that have overstretched themselves and that will only come to the fore as and when rates do rise,” said Mr Driscoll.
“People are a bit too myopic sometimes in that they focus on today and not enough on tomorrow but when it comes to investments, you’ve always got to keep an eye on tomorrow.
“Irrespective of whether the rates rise or not next year, you can certainly expect the banks to move regardless.”
To soften the blow of a rate rise, Mr Driscoll believes homeowners should pay down as much debt as they can while the environment is favourable.
“From my perspective, it is a genuine balancing act- accountants may look at it and say, well as and when rates do rise, the last thing they want to see is their clients under any financial stress or pressure,” said Mr Driscoll.
“There is the counter argument that it is always good to have savings and a buffer but that's what accountants get paid for – to give that specialist advice.
“Accountants should be very frank and proactive as opposed to being reactive, whilst the environment as such is favourable, they may advise to pay the loan down but I can’t stress enough that is case-by-case.”
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