Certainly Australia’s  economic data shows that our economy has grown at the fastest pace over the past three years. This is quite different to the expected economic results from several overseas countries which may even be going into yet another recession.

As such, AMP chief economist Shane Oliver said he expects the RBA to leave the official cash rate at 4.5 per cent for the fourth consecutive month.

“While a run of stronger than expected economic data culminating in above trend growth in the June quarter adds to the case for a rate hike this is likely to be balanced against uncertainty regarding the global outlook and expectations that inflation is likely to remain within the target range over the year ahead,” Mr Oliver said.

However this is not to say that rates will be keep on hold for an extended period of time. In another month or two the RBA is likely to lift the rates again to counteract excessive spending by the consumers.

“The RBA is also likely to signal that its bias is still to raise interest rates and that above trend GDP growth in the June quarter along with a massive boost to national income from higher commodity prices will have reinforced this.”

The Advantedge Self-Employed Lite Program, which will be marketed through the Advantege mortgage manager partners,  does not require any mortgage insurance payments by the borrower if the loan is between 60 and 70 per cent LVR. Also for such loans there is no need for 6 month BAS statements.

Brett Halliwell, Advantedge general manager of lending distribution, said the new product would enable mortgage managers to service a market segment that has been neglected by lenders in recent years.

“We’ve been working hard on bringing this home loan alternative to the Australian market so that our mortgage manager partners can boost their lending to the self-employed sector – which has been a traditional target market for the non-banks,” he said.

“Such a product is much needed across Australia’s self-employed sector in the current lending market. We expect our partners to experience strong demand among their clients.”

Iain Forbes, director of sales and marketing at Australian First Mortgage, one of Advantedge’s mortgage manager partners, welcomed the product launch.

Self employed applicants have been finding very few mortgage alternatives since the GFC. This product will specifically address their needs and circumstances.

The Self-Employed Lite Program will be available within 2 weeks

Loan Market chief operating officer Dean Rushton said the majority of downsizers are aging baby boomers getting ready for retirement. but many home owners who are younger simply do not have the capital to sustain their current lifestyle so they need to reduce debt by selling up and moving to a smaller property.

“We have had a recent case from one of our brokers who had retiree clients on Sydney’s North Shore who have sold their home for $900,000 and bought another place for $650,000,” he said.

Such refinance activity is very common now as a large sector of the Australian population is getting older and is preparing to retire.

Mr Rushton said empty nesters were also downsizing to help their children get into the real estate market.

“These clients may sell the long standing family home and buy a smaller property, which gives them money to start preparing for retirement and also some spare cash if they want to assist their children in buying their first property,” he said.

The new Rate Cutter Home Loan will “improve with age” according to the bank, offering customers up to 0.80 per cent off the standard variable rate after the first 4 years with the bank.

Initially the Rate Cutter home loan offers a discount of only 0.40 per cent, with that discount increasing by 0.10 per cent each year. Once borrowers reach the 0.80 per cent discount they will be eligible for that saving for the life of the loan.

Dean Gillespie, heads up the mortgages division at the bank. He believes that more borrowers are keeping their loans with the bank for longer periods and as a result the bank decided it was appropriate to reward such behavior.

“We’ve listened to our customers and they’ve told us they want a bank that looks after them over the long term. So that’s exactly what we’ve delivered.”

According to Bankwest a customer taking out a rate cutter home loan would be able to save $5,510 at the end of the first four years of their loan if their mortgage balance is $285,000.

Mortgage Choice has reported yesterday a net profit of $23.5 million for 2009/10, a drop from $26.8 million in 2008.

Origination commission income dropped by two per cent, from $53.4 million to $52.1 million. Trail commission income fell 16 per cent, when calculated on a statutory basis, or two per cent on a cash basis.

The business operating expenses were down nine per cent, from $30.6 million to $27.9 million.

Mortgage Choice chief executive Michael Russell said the group had a very strong focus on cost control and operating efficiency.

One of the system enhancements by Mortgage Choice this year was an electronic conduit for filing loan applications so it could get a better view on quality and conversion issues. It has used the system to improve the performance of its loan writers and it has also been able to use the data it has gathered to challenge the reports coming back from lenders.

Mortgage Choice has created 18 new franchises during 2009 but that was offset by 14 terminations.

Russell said commission structures had stabilised, with no changes during the year. His expectation is that trail commissions will start to rise.

“Since the GFC the mortgage broking industry has worked with lenders to reduce origination costs, through electronic lodgement and better quality applications. We see trails getting better on long-life loans.”

It would be most unfortunate if lenders were to take advantage of the situation at the cost of the already overstretched Australian borrower – said a representative of the Real Estate Institute of Australia.

Knowing that the Government is in caretaker mode and is unlikely to reprimand lenders at this time, unscrupulous funders could choose to act irresponsibly at this time.

It would be very helpful if banks and other lenders waited until the current political situation in Australia is resolved and a new government is appointed before announcing any further rate movements.

The report forecasts economic growth to accelerate by an average of 3.8% per annum over the next three years, while unemployment will fall under 4%. These tightened labour markets and household spending will drive up inflation, the forecaster warns.

BIS Shrapnel says the current housing shortage is a “major problem” because it inflates mortgage debt, increasing consumer sensitivity to growing interest rates and unemployment and expanding the current account deficit. A housing shortage is also a major influence on rising CPI due to its impact on rents.

There is an expectation that weaker population growth will take some of the pressure off future growth in demand for housing in the short term, though the current housing shortage problem is not likely to be addressed in the near future given the level of current interest rates.

There is an expectation that the easing in funding for property developers in the coming years is expected to drive a recovery in activity over short term.

This is despite the fact that the Reserve Bank is not expected to change the official cash rate until late this year.

According to Housing Industry Association figures published this week, the average monthly loan repayment in Victoria has hit $2238, up from $1499 a year ago,

Banks are continuing to make a huge profits even though we have seen a lot of complaints about the increased costs of funding affecting their bottom line.

Commonwealth Bank chief Ralph Norris, speaking as the bank posted a record $6.1 billion profit last week, said it “may well have to” pass on higher costs to customers.

ANZ chief Mike Smith said yesterday that the banks had to face up to “permanently higher costs of doing business”.

His bank posted a $1.3 billion profit for the three months to June.

When banks’ costs are under pressure they frequently seize on increases in the RBA cash rate to lift mortgage rates by a bigger margin.

Banks are generally reluctant to increase interest rates during an election campaign.

NMC’s one and two year fixed rate mortgages will now be offered at 7.30 and 7.50 per cent respectively.

The move comes after the NMC reduced both its two and three year fixed rates to 7.60 per cent just over a week ago. However since that rate cut some other players in the home loan industry have come out with significant rate reduction for fixed mortgages. Aussie Home Loans for one had cut it’s fixed rates to 6.99%.

Head of sales Fernando Lemos said NMC had observed a slight shift to fixed rates with consumers wanting certainty for the future.

“We are always looking at ways of passing any funding benefits directly onto our customers,” he said. NMC will endeavor to continue to offer value home loans in the ever changing Australian mortgage landscape.