Interest Rate Snapshot

Every few weeks I will comment on the latest Interest Rates in Australia.

Variable Rate is: BBSY30 of 3.15% + margin of 3.5% = 6.65%pa

What does this mean?
For property development finance, if you are borrowing more than $1m, you will usually receive a rate equivalent to the BBSY30 + a lender margin.

This rate is otherwise known as the 30 day Floating Bank Bill Rate. For Australia, BBSY30 is currently around 3.15%.pa at present and moves daily, sometimes by the minute.

What is the lender margin? Its a margin for risks associated with the loan to you..i.e. building risk, sales risk, experience, servicing. Typically anything from 2% to 5% is normal at present. (It was a lot lower last year when money was more available). More on this later....