Sep 24

According to a recent survey from the Melbourne Institute, the percentage of debt-free households in Australia has dropped  to a nine-year low, as home owners are refinancing to increase their mortgage in order to maintain their current lifestyle and home.

It seems that in the September quarter, only 36.2 per cent of households held no debt. This represents the lowest percentage since such reviews began in 2001.

With the ratio of household debt to disposable income at record levels, the figures have raised concerns that a growing number of consumers are digging themselves more and more into debt.

While...

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Sep 23

Mortgage repayments for an average mortgage holder could go up by as much as $90 per month if the RBA and the banks commence interest rate revision as expected.

There is a general expectation in the industry that if RBA increases the rates within a month or two, this will not preclude the banks from also lifting the rates independently.

Analysts believe the big banks will be keen to boost mortgage rates under the pretex of an increase in the base rate.

But buyers of fridges, washing machines, flat screen TVs, computers, video games, appliances and furniture will be able to enjoy bargains as the Aussie dollar soars.

While the RBA board is expected to raise the cash rate by 0.25 percentage points when it meets early next month, analysts...

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Sep 22

As both the RBA and the banks independently are considering lifting interest rates, it is reasonable to assume that Home Loan Refinance activity will pick up.

Dean Rushton form LoanMarket is projecting an increase in mortgage refinance applications and enquiries over the next few months.

“We typically see a 15% uplift in enquiries every time the RBA lifts rates,” said Rushton. “If the banks were to move outside the RBA rate, that could go up to as much as 25%.”

He also urged mortgage brokers to make sure borrowers are aware of where interest rates are sitting in general – especially as the variance...

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Sep 21

It seems that interest rates will be going up very soon despite soft consumer spending and mortgage stress experienced by many home owners.  The reason for this is the anticipated mining boom for Australia.

Inflation is expected to peak not as a result of irresponsible consumer spending but spiking labour costs pushed up by a strong minerals industry.

Defending the RBA’s use of interest rate policy as a handbrake on the so-called two-speed economy, Mr Stevens acknowledged that monetary policy was often seen as a “blunt instrument” because it hit everyone even when only one section of the economy needed restraining.

But he said this was a fact of life and there was no way around that.

The RBA understands that this can create...

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Sep 20

After months of cutting LVRs a 105% home loan is here, offered by Mortgage House.

The fully featured ‘Home Buyer Plus’, offers up to 105% Loan to value ratio with no ongoing account keeping fees. It also offers borrowers with the opportunity to eliminate debt by providing access to a 100% offset account, allowing applicants to have their salaries deposited directly into the mortgage offset account. The loan also comes with BPAY and Direct debit facilities.

Of the new product, Mortgage House Managing Director, Ken Sayer commented, “We are excited to be leading the way in the Australian Home Loan market, by...

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Sep 17

Switching away from your bank for both deposits and home loans has become very easy due to having all the necessary information available to consumers 24/7 on the internet.

While switching financial institutions has been difficult in the past – consumers have started shifting from bank to bank online.

This is also likely to reflect the trend going forward. While deposit rates were the main instigating factor for people deciding to move their money, with mortgages the decision is not purely based on the interest rates offered.  Consumers also switch lenders in order to access additional funds as well as obtain a more flexible

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Sep 16

Advertising claims made by Australian credit unions that consumers can save $35,000 by switching their mortgage from a big bank to a credit union will be altered and disclosures upgraded after numerous bank complaints about misleading credit union advertising.

ASIC has taken action on a complaint from the Australian Bankers Association and forced Abacus, the mutual banking sector’s industry group, to alter its TV advertising claims, which were based on Infochoice research, by $5000.

The television commercials which first aired in June 2010, were based on comparisons worked out on 9 March, after the RBA and big banks had raised their rates by 0.25 per cent but one day before the credit unions raised rates by the same amount. This calculation was performed by Infochoice based on certain assumptions.

The...

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Sep 14

It seems that lenders are relentless in chasing the fixed rate customer. The latest lender to offer a great fixed rate home loan deal is CUA, which announced yesterday a three-year rate of 6.75 per cent. All this is despite evidence from the market suggesting that consumers still hold a preference for variable rates.

According to infochoice, CUA and Heritage have the lowest three-year fixed rates,while  HSBC, ING Direct, BankWest, HomeSide, AMP, Aussie, Greater Building Society, Police & Nurses Credit Union, Rams and St George all have three-year rates below seven per cent.

Aussie cut its three-year rate two weeks ago. According to Infochoice, other lenders that have cut fixed rates in the past couple of weeks include ANZ, Bank of Queensland, St George, ING Direct, ME Bank, IMB, Australian Central Credit Union, and MyRate.com.

CUA is offering the...

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Sep 13

The Daily Telegraph has today reported that Australian banks and non-banks are slowly moving towards offering Australians No Deposit Home Loan Products.

According to the paper, Mortgage House, a non-bank lender is the first in the line of many to come. Mortgage House is expected to offer borrowers home loans equivalent to 105 % of their home value.

The offer comes just one month after the company introduced to the market its 99% LVR home loan product.

According to the non-bank lender’s chief executive officer, the 99 per cent LVR product has been incredibly successful so far. As such, the lender has seen room to capitalise...

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Sep 10

Fixed Home Loans are the flavor of the month. More and more lenders are coming up with very competitive fixed home loan offers.  As there is talk in the media of banks lifting their variable rates in the near future – fixing your home loan may be a very good idea.

BIS Shrapnel’s managing director Robert Mellor certainly believes so.

“Fixed rates are currently very reasonably priced. Lenders have seen that there is a market there and they are slashing their rates accordingly,” he said.

When discussing which fixed rates offered borrowers the greatest bang for their buck, Mr Mellor said a five year fixed rate was definitely better than a three year rate.

“If a borrower locked in a three year fixed rate, they will find...

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