Online Home Loans News

Wed, 2 May 2007
Interest rates on hold: reprieve for homeowners
In a boon for the nation's mortgage belt, the Reserve Bank decided at its quarterly meeting on May 1 to leave the official cash rate unchanged at 6.25 per cent. The Reserve Bank's decision followed the publication of a much lower than expected March-quarter consumer price index, which showed inflation rose just 0.1 per cent for the quarter and 2.4 per cent for the year. This was well within the Reserve Bank’s target of 2-3 per cent. In a rare show of consensus, many economic forecasters are now predicting a further easing in inflation and most believe interest rates will stay on hold for the rest of 2007, particularly given the impending federal elections.

Thu, 16 August 2007
Non-bank lenders set to increase rates above RBA
HOMEOWNERS already feeling the squeeze after last week's interest rate rise could face further pain after the current global lending crisis yesterday reached Australian shores. Aussie Home Loans boss John Symond today today said increases in the cost of borrowing on international credit markets could force Australian home lenders to charge higher interest rates, regardless of moves by the Reserve Bank of Australia (RBA).

Sun, 19 August 2007
Costello flags credit crackdown
LOW-income earners will find it tougher to get home loans under proposed new state laws aimed at stamping out risky credit. The laws, expected by the end of the year, would come after the US sub-prime lending crash. Treasurer Peter Costello will call today for a state-based regulatory crackdown on mortgage providers who issue "low documentation" home loans to struggling consumers. It is understood the Commonwealth may act if the states do not.

Tue, 04 September 2007
House prices race ahead
RESIDENTIAL property prices have surged this year, growing by nearly 7 per cent during the first six months of 2007, led by strong gains in Adelaide, Brisbane and Melbourne. The latest RP Data-Rismark Hedonic Index results show that the Australian residential property market has experienced strong growth this year, with overall property prices growing by an impressive 6.6 per cent.

Thu, 13 September 2007
IMF warns Australia on interest rate rises
THE International Monetary Fund (IMF) has warned the Reserve Bank of Australia (RBA) that it should tread carefully on future interest rate decisions given recent global financial market turbulence. In a report the IMF also says that while the country's external deficit appears sustainable, it requires continued careful monitoring, while states and territories need to make prudent decisions on the timing and extent of infrastructure investments over the next few years.

Fri, 05 October 2007
Westpac RAMS home split-up deal
WESTPAC has compressed a two to three-year expansion program for its consumer banking network into a $140 million deal to buy the RAMS brand and its distribution business of 92 home-lending stores.

An ebullient Westpac chief executive David Morgan, who will hand over next February to ex-St George boss Gail Kelly, said the RAMS franchise network established a new growth option for the bank, expanding its retail footprint by 10 per cent.

RAMS will remain listed but undergo a name change and keep its $14 billion portfolio of home loans, which will effectively go into run-off mode. RAMS shares slumped 19c, or 22 per cent, to 66c, well down on their $2.50 listing price last July, reflecting the market's assessment that Westpac had negotiated a highly favourable deal and that there was no clear upside for RAMS shareholders.

Their only interest now is in the residual income earned by the company's portfolio of loans.

Sun, 21 October 2007
Stay or Go ...
Comments by a finance industry executive have sparked a furious debate in the industry about whether home loan borrowers would be better off playing safe and switching to a major bank to protect themselves against the fallout from the global credit crunch.

Borrowers whose loans are with RAMS, Resi, Macquarie, Aussie and others have seen changes to their mortgage interest rates, while borrowers with big banks have not.

The big banks have held their rates steady, saying they have greater flexibility in their funding structures to allow them to withstand the impact of higher wholesale rates.

Source: Sydney Morning Herald

Fri, 02 November 2007
Home Loan Rate Rises Loom
MORTGAGE interest rates will rocket to 8.55 per cent next year - the highest since 2000 - according to property forecasters.

The latest property market outlook, released yesterday by mortgage insurers PMI and analysts BIS Shrapnel, finds no relief for the housing affordability squeeze for at least another two years.

Wed, 07 November 2007
Default risk low
MORTGAGE default rates have risen but Australia is in no risk of a US-style sub-prime meltdown, according to a leading insurer.

The chief executive of mortgage insurer PMI, Ian Graham, said Australian mortgage default rates had been at a historically low level and were returning to normal.

PMI insures mortgages and residential mortgage-backed securities.

Mr Graham said Australia was not at risk of a mortgage meltdown because there was much less sub-prime lending here than in the US.

"More defaults have been reported, particularly because of the rate rises we've seen recently," he said.

"In the US 20 per cent of all mortgage lending was sub-prime," he said. "In Australia it's less than 2 per cent. And even that 2 per cent is less risky than in the US."

Fri, 07 December 2007
Wizard wins Best Basic Variable Award
Wizard Home Loans Rate Breaker Loan has won the top spot in the December issue of Your Mortgage magazine’s Editor’s Choice competition, thanks to its bargain interest rate of just 6.71% (correct as of 18 September 2007)

Mon, 07 January 2008
ANZ loan rates on the rise
With fixed rate home loans going up a quarter of a percentage point, future ANZ home loan customers are facing higher rates.

ANZ bank is the second to raise mortgage rates after last week's move by the NAB to hike its variable rate mortgage.

The Commonwealth and Westpac haven't decided whether or not they'll need to move but both say their rates structures are under review.



Sun, 25 May 2008
Commbank: home loan rates will rise
HOME loan rates will be pushed even higher this year as a result of higher bank funding costs, Commonwealth Bank chief executive, Ralph Norris, warned yesterday.

Mr Norris said the credit crisis meant the bank was not meeting its increased funding costs.

This is despite Australia's largest home loan lender already having pushed up its variable home loan rate three times, to a total of 0.37 percentage points above the official cash rate.

The Commonwealth Bank also joined other big banks in scaling up its bad debt provisions, with analysts estimating a charge of about $800 million for the financial year.

The bad debt provisions are expected to rise by about 30 per cent from the first half to the second half, even though the first half includes Commonwealth Bank's bad debt charges for Centro.

Despite increases in its bad debt charges, they are smaller than those reported recently by its main rivals.

As a signal of continuing uncertainty, the bank yesterday dropped previous profit guidance that its earnings growth would be at or above the level of its peers, partly because StGeorge took a two-day hammering after cutting back its profit guidance.

Mr Norris also refused to rule out any Commonwealth Bank interest in St George, after Westpac's takeover offer. Commonwealth shares closed 14c down at $44.82.

In a third-quarter market update, Mr Norris said the bank's cost of funding for mortgages had risen by about 47 basis points as a result of the credit crisis.

He said the bank had passed on about 37 basis points in the extra costs, but there was still a shortfall of 10 basis points.

He gave a clear message to borrowers that interest rates would rise this year to cover the gap and improve the bank's profitability.

"I think the industry as a whole is facing a similar situation that funding costs day-by-day are continuing to increase; it's just a fact of the market," Mr Norris said.

"The fact of the matter is, over time, interest rates being charged will increase unless we see significant drops in rates both internationally and locally."

Mr Norris's message is particularly sobering because the Commonwealth Bank is among those least affected by the credit crisis, since its strong deposit base gives it a cheaper source of funding than its rivals.

This is reflected in the Commonwealth Bank having the lowest variable home loan rate of the majors, at 9.44 per cent.

The removal of profit guidance was seen by analysts as tacitly downgrading its profit forecast, although the bank's chief financial officer, David Craig, highlighted St George's sharp share price slump.

"The only bank that seems to have given any guidance at all was St George, and I spent the rest of the next day reading articles slamming them for being silly enough to give guidance in this economic climate," he said.

SOURCE: Stuart Washington, Sydney Morning Herald

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