Resi mortgage corporation pty limited ABN 61 092 564 415
Level 3, 458 Wattle Street, Ultimo NSW 2007
Tel 02 9280 0007 Fax 02 9280 0009 E-mail save@resi.com.au PO Box 12 Broadway, NSW 2007
MEDIA RELEASE
MAY 12, 2010
TAX CUTS NO REAL CONCESSION FOR MORTGAGE HOLDERS
Leading non-bank lender Resi Mortgage Corporation says the Federal Budget’s tax cuts which come into
effect on July 1 offer no real concession for mortgage holders coping with six official rate rises.
Resi’s Head of Consumer Advocacy, Lisa Montgomery, says borrowers feeling the pinch from rate rises
this financial year will not be able to offset any real amount off their increased mortgage repayments with
the tax cuts - and will still have to seek out additional ways to restructure their household budget.
She says ”To put this into context, a borrower on $80,000 a year will receive an extra $300 in the hand
over the course of next year, so this is of little comfort when you consider that monthly mortgage
repayments on an average $300,000 loan have increased by that same amount every month.”
Montgomery says the only real reform announced for the mortgage sector was a change to the First Home
Saver Account, which will now offer first home buyers more flexibility in the way they utilise the account if
they decide to purchase a property before the four year period is up.
“With every penny counting in the very competitive first home buyer market, any funds saved during the
four year period will now eventually go into their mortgage, rather than their superannuation, if they
purchase before that four year period is up – which may offer in the long term, more incentive for a greater
number of people to use the accounts,” she says.
The tax cuts in the 2010 Federal Budget originate from the tax reform package which formed part of the
2007 Budget, where from July 1, 2010, the 30% tax threshold increases from $35,001 to $37,001; the
low income tax offset increases from $1,350 to $1,500, meaning the effective tax free threshold for
people earning $30,000 or less increases to $16,000; and the 38% tax rate is reduced to 37%.
Montgomery says as these tax cuts will only deliver a small incremental increase to household income,
many current consumer spending patterns will have to undergo rigorous scrutiny, if mortgage holders are
going to successfully balance any sized budget.
“The reality is, borrowers are in the midst of a rising rate cycle - and there’s no white knight in sight to save
the day. Borrowers therefore need to be clever and disciplined in the way they utilise any financial windfall
that comes their way and decide how it can best boost their budget,” she says.
Media Contact:
Lisa Montgomery, Head of Consumer Advocacy,
RESI Mortgage Corporation: (02) 8204 5012 or 0414 592 553
Karen Bristow - Kardan Consulting: 02 9967 3245
Montgomery suggests five simple ways in which to boost a household budget:
CUT CREDIT: Pay down or pay off any high interest debts such as credit cards
REVISE PLANS: To renovate or upgrade your home
LOAN AUDIT: investigate the merits of restructuring your existing mortgage to reduce fees or
interest, or look at whether you would be financially better off refinancing instead.
UTILITY SPENDING: Look at all your utility bills and investigate all options available to you, to
potentially reduce them
SECOND HAND ITEMS: Consider second hand and recycled items for discretionary
purchases when appropriate and where it can make a significant difference to your hip pocket.
NEWS 
