Posts Tagged ‘Interest Rates’

Rule Changes to Ease Rising Household Debt

The Australian Prudential Regulation Authority (APRA) has increased the serviceability buffer in response to concerns around rising household debt levels throughout the nation; advising authorised lenders that when assessing a new borrower’s ability to service their loan payments to work on an interest rate at least 3% higher than the current product loan rate. The previous buffer in place was 2.5%.

APRA Chair Wayne Byres said that whilst they have strong … Read the full post »

Still a Seller’s Market!

Despite the disruption the global pandemic continues to inflict on freedoms and the economy, the Australian property market is still going gangbusters, with home sales continuing to outpace new listings.

According to CoreLogic, the sales-to-new listings ratio hit 1.4 over the three months to July, meaning that for each dwelling added to the market, more than one gets sold.  This ratio has trended ever since June 2020 when the Federal Government … Read the full post »

Long-Term Rates on the Rise

Although the official cash rate remains at historic lows, and the Reserve Bank is not expected to lift interest rates until 2024, some of the major banks have started to raise their long-term fixed-interest rates, with the Commonwealth Bank (CBA), being the latest.

Further hikes expected later this year suggest we could see a tide turning on Australia’s interest rates.  The cost of long-term money for the banks is rising meaning … Read the full post »

Home Loans Surge…

Queensland’s ‘The Courier-Mail’ published on September 9th that the Australian Bureau of Statistics (ABS) reported that new home loan commitments in July 2020 rose 8.9% compared with June; this is the largest month-on-month rise in new home loan activity ever recorded by the ABS.

Why is this happening?  Well, it is driven by a few factors, from the easing of restrictions (in most states), continual historic low interest rates, along with … Read the full post »

Institutional Responses to COVID-19

This week, we summarise what is currently on offer for people financially impacted by Coronavirus.

At the start of April, stimulus packages totalled approximately $331.6 billion, or 16.6% of GDP.

Monetary Policy:

Over March, The Reserve Bank of Australia reduced the cash rate, and launched unconventional monetary policy. The RBA have reduced the cash rate to the effective lower bound of 0.25%. The RBA signalled there would be no further reductions to the cash rate, … Read the full post »

Interest Rates on Hold

The Reserve Bank of Australia (RBA) board held their monthly meeting on Tuesday; retaining the official cash rate at 1 per cent.

RBA Governor, Philip Lowe reports that despite further signs of a turnaround in established housing markets in Sydney and Melbourne; softer economic conditions and heightened global uncertainty could lead to further cuts in coming months.

“Economic growth in Australia over the first half of this year has been lower than … Read the full post »

Loosening of Lending Guidelines!

In late May, we advised you of a review by APRA (Australian Prudential Regulation Authority) regarding lowering the interest rate buffer for residential mortgage lending; well, last Friday (July 5), they confirmed they will remove the 7% buffer taking effect immediately.

What does this mean?

It means the changes to the rates banks use for serviceability assessments; whereby they had been applying a minimum rate of 7.25% as an industry standard, despite … Read the full post »

Historic Move by RBA

On Tuesday, at its monthly board meeting, the Reserve Bank of Australia (RBA), has reduced interest rates, for the first time since August 2016, in line with predictions by many analysts and commentators, slashing it by 25 basis points from a record low of 1.5%, to a record breaking 1.25%.

There could be more cuts on the way; many economists predict this is the first of several more heading our way, … Read the full post »

Proposed Changes to Mortgage Lending

The Australian Prudential Regulation Authority (APRA) has flagged lowering the minimum interest rate serviceability buffer from 7% to a level determined by banks and other financial institutions; essentially removing the cap and allowing more Australians to take out mortgages and larger loans.

The removal of the interest rate floor comes amid falling house prices, record-low credit growth, and expectations that the Reserve Bank will cut interest rates this year; as early … Read the full post »

Use Your Power!

As a property owner, or potential property owner, you most likely either have or will need a mortgage, usually for an extended period of time. Mortgages are big business for financial institutions, and there is a lot of competition out there, with not only the big four to choose from, but many other players have come into the market, some of whom can offer a better deal…in any case it … Read the full post »

Interest Rates

Whilst the Reserve Bank takes a break in January, leaving interest rates unchanged by default; a New Year is an opportune time to start to think about the financial health of your home loan, and check your interest rates against competitive financial institutions, there are some genuinely attractive packages in the marketplace that can save you thousands.

What is the outlook like for 2019?

Well, no-one has a crystal ball, and the … Read the full post »

Interest Rates: The Outlook

At its meeting on Tuesday September 4, the Reserve Bank Board decided to leave the cash rate unchanged at 1.50 percent; this is despite some of the big players such as Westpac and Suncorp raising their rates last week.

Governor of the Reserve Bank, Philip Lowe, reports the decision to keep rates on hold takes into a number of factors including the continuing expansion of the global economy, with a number … Read the full post »