The wait is over and not only has the RBA dropped the official interest rate by 1.00%, but the Government has now unveiled a new stimulus package, injecting a lot of cash into the economy.  

I can't help but wonder about the effectiveness of the $950 payments.  For a start, it is calculated on your taxable earnings for 2007-2008, so my first question is what about the thousands of Australians who were redundantised or simply fired since then - what happens with them?  Then there is the question of how effective this massive spend will be on the economy.  Many people have jokingly referred to the last bonus payment as either the "plasma bonus" or the "pokie bonus" considering how much money was injected into either the pokie machines or luxury items such as plasma tvs in December 2008.  Will a quick spike in retail spending give us all the reassurance we all need.  Don't get me wrong, if I'm eligible then I'm certainly not going to hand mine back in an excess of nationalism. 

I definitely think that the interest rate changes will stimulate further business for us brokers.  I am already planning a small local marketing campaign based upon providing health checks on peoples existing mortgages as there is a real opportunity to help people to save money. 

That's one of my favourite aspects of broking.  With some research and product knowledge, we can literally save people thousands. 

I spoke to one client recently who had bought an investment property with his finance from a non-conforming lender who he had found himself.  He didn't need to be with that lender and was paying through the nose, simply because he had seen their advertising and thought that his position wouldn't allow him to go through one of the majors.  He was really struggling with his cashflow.

We sat down and looked at his position and we found another lender who would accept his particular circumstances which meant a drop of almost 3% in interest rates on a $300k loan.  That saved him $9,000 a year immediately.  We also switched him over to interest only (as an investment property) which saved a bit more.  He was afraid to convert the loan to an investment loan even though the property was massively negatively geared, all because he thought that he'd have to pay more tax on the rental income.  I put him in touch with a good accountant and he has now also completed a tax variation form, freeing up even more cashflow.  For months this young guy has been working extra jobs simply because he was ill-informed.  He now doesn't have to worry about losing his property and he's sleeping well at night.

When I'm busy chasing up the banks and trying to get those hard loans over the edge, I reflect back on situations like above and remember that there are reasons other than financial why I do this job.