Optimo Financial Default Assumptions

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This page lists Optimo Financial's default assumptions.  For more information about how assumptions work in Pathfinder, see How to see and edit the assumptions.

General analysis assumptions


Default value

Notes on changing default

Start date for analysis

If case is created between July 1 and March 31: the start date is 1 July of the current financial year.

If case is created between April 1 and June 30: the start date is 1 July of the next financial year

  • If you have organisation assumptions, you can change when the start date flips to the next financial year
  • If you submit the case to the SDS, you can request any start date for a case.
Length of analysis 20 years
  • If you submit the case to the SDS, it is possible to extend the period of analysis.
Legislation

The Optimo Pathfinder model only includes legislation that has been passed in both houses of parliament and received Royal Assent from the Governor General.

Optimo Financial is constantly monitoring proposed changes so that if they become law, Pathfinder is updated quickly. We may also suggest ways to model proposed changes within the existing Pathfinder model. For more information on proposed changes see Legislative updates and Optimo Pathfinder.

Series for indexation


Default value Notes on changing default
AWOTE

3%pa

  • For any case, you can choose a custom value instead of a the default index. e.g. By default, any income with the 'Wages/Salary' type is indexed by AWOTE, but you can put another value for the 'Index by' field.
  • If you have organisation assumptions, you can set your own default value for AWOTE, CPI and Rental CPI.
CPI 2.5%pa
Rental CPI 3%pa

Cash returns

Type

Default value

Notes on changing the default
Cash account 1.5%pa
  • These values are pre-filled in the Interest rate when you choose the 'Type' for the cash account or fixed interest account (for more information see Cash or Fixed interest)
  • For any case, you can change the pre-filled value for the Interest rate field
  • If you have organisation assumptions, you can set your own default value.
Term deposit 1.5%pa
Australian bonds 4.4%pa
International bonds 4%pa

Family home and Investment Property and assumptions

Family home and Property growth Series

  • These series are listed in the 'Index by' field in the series builder, when chosen, they will use the given values.
  • If you would like to override these values:
    • For any case, instead of choosing one of the below series, you can use the Custom % option
    • If you have organisation assumptions, you can request to change the default values for these series.
Series name Default values
House price growth 2.5%
Unit price growth 2.5%
Commercial price growth 2.5%

Family home and Property income and expenses

If you would like to override these defaults:

  • For any case, all the below fields are editable (if they apply)
  • If you have organisation assumptions, you can request to change the default values.
  • Also see LVR assumptions
Property type

Growth %

(see above table)

Rental income

(% of property value)


Running Expenses

(% of property value)


Acquisition costs

(% of property value in year property is purchased)

Disposal costs

(% of property value in year property is sold)

Depreciation2

(% of property value)

Applies to Family home and investment properties Investment properties only Investment properties only Family home and investment properties Family home and investment properties Investment properties only
House House Price Growth Series

4%pa

1.3% 5% 2.5% 1.2%
Unit Unit price growth Series

5%pa

1.3%

5% 2.5% 1.2%
Commercial property Commercial price growth 5%pa 1.3% 5% 2.5% 1.2%
Existing NRAS unit1 Unit price growth 5%pa 1.3% 5% 2.5% 1.2%

1For existing NRAS units, the rebate will be applied according to the latest rebate value and will only be applied for the remaining years the property is eligible and the 20% NRAS discount is similarly applied to the rental income.

Optimo defaults, standard depreciation of 2.5%pa applies to building component so lower value of 1.2%pa reflects application to total property value.

Loan interest rates


Default value Notes on changing the default
SECURED LOANS
  • These values are pre-filled when you choose the 'Type' for the loan (for more information see Secured loan)
  • For any case, you can change the pre-filled value for the Interest rate field
  • If you have organisation assumptions, you can set your own default value
Interest only 5%pa
Principal and Interest 5%pa
SMSF LRBA Interest only 5%pa
UNSECURED LOANS
Interest only 8%pa
Principal and Interest 8%pa

Shares/Managed fund returns (directly owned or in an SMSF)

  • Returns are before tax.
  • Also see LVR assumptions
  • Notes on changing default:
    • If you have organisation assumptions, you can set different default values, and also add new Profiles.
    • You cannot edit this values within a case.
Profile Capital growth %pa Distribution/Income %pa % franked3 Fees%4 % growth assets
Alternative 0.3%pa 5.4%pa
0
Australian bonds 0%pa 2.5%pa
0
Australian equities (direct) 3%pa 4.5%pa 70% 0
Australian equities (trust) 3%pa 4.5%pa 70% 0
Balanced 2.13%pa 3.68%pa
0 70% growth assets
Capital protected 70% growth fund 2.13%pa 3.68%pa

Capital guarantee Entry fee: 2%

Capital guarantee fee: 1.8%


Capital protected 85% growth fund 3.04%pa 3.86%pa

Capital guarantee Entry fee: 2.1%

Capital guarantee fee: 2%


Cash (direct) 0%pa 1.5%pa
0
Cash (trust) 0%pa 1.5%pa
0
Conservative 1.38%pa 3.19%pa
0 40% growth assets
Defensive 0.73%pa 2.4%pa
0 20% growth assets
Emerging market equities 7%pa 2%pa
0
Growth 3.04%pa 3.86%pa
0 80% growth assets
Hedge fund aggressive 10.5%pa 0%pa
0
Hedge fund conservative 7.5%pa 0%pa
0
High growth 3.8%pa 4.14%pa
0 98% growth assets
Infrastructure 3.2%pa 5%pa
0
International bonds 0%pa 2%pa
0
International equities 4.9%pa 2.5%pa
0
Listed Australian property 2%pa 6%pa
0
Listed International property 3%pa 5%pa
0
Secure 0%pa 1.5%pa
0 0% growth assets


3If Franking credits are blank, it is assumed franking credits are included in the returns.

4Where fees are zero, it is assumed the returns are after fees.

LVR assumptions

These values are pre-filled, but you can override them for any case.

Owner Shares Property Family home
Individual 50 80 80
SMSF n/a 50 n/a
Trust 50 80 80

Superannuation investment option returns

  • Returns are after tax.
  • Notes on changing default:
    • If you have organisation assumptions, you can set different default values and add new Profiles.
    • You cannot edit these values within a case

Accumulation phase total return %pa Pension phase total return %pa Fees5 % growth assets
Alternative fund 4.9%pa 5.7%pa

Australian bonds fund 2.1%pa 2.5%pa

Australian equities (direct) fund 7.67%pa 8.85%pa

Australian equities (trust) fund 7.67%pa 8.85%pa

Balanced fund 5.04%pa 5.8%pa
70% growth assets
Capital protected 70% growth fund 6.3%pa 7.2%pa
  • Capital guarantee entry fee 2%pa
  • Capital guarantee fee 1.8%pa

Capital protected 85% growth fund 7.2%pa 8.2%pa
  • Capital guarantee entry fee 2.1%pa
  • Capital guarantee fee 1.8%pa

Cash (direct) fund 1.3%pa 1.5%pa

Cash (trust) fund 1.3%pa 1.5%pa

Conservative fund 3.96%pa 4.57%pa
40% growth assets
Defensive fund 2.7%pa 3.14%pa
20% growth assets
Emerging market equities fund 8.7%pa 9%pa

Growth fund 6.02%pa 6.9%pa
80% growth assets
Hedge fund aggressive fund 8.9%pa 10.5%pa

Hedge fund conservative fund 6.4%pa 7.5%pa

High growth fund 6.94%pa 7.94%pa
98% growth assets
Infrastructure fund 7.5%pa 8.2%pa

International bonds fund 1.7%pa 2%pa

International equities fund 7.025%pa 7.4%pa

Listed Australian property fund 7.1%pa 8%pa

Listed International property fund 7.25%pa 8%pa

Secure fund 1.28%pa 1.5%pa
0% Growth assets

5Where fees are blank, it is assumed returns are after fees.