🏦 Banks are hungry for business – Commbank released it loss of market share, all other majors are expected to echo
🏦 Mortgage processing is taking longer, serviceability is still ‘tight’
🏦Non-bank lending is trending upward
1. June and July showed lending is on the decline. Largely due to slower mortgage processing and tighter lending
2. Qld was the only state to show an increase in lending for owner/occupiers
3. Cost of lending (to banks) is up
Overall – the big 4 saw their profits drop. But to put in context, CBA still made $9.41 BILLLION in FY2018.
If you are in the market for a loan, we suggest
1. Get started earlier than you think, your processing will be slower
2. Use a broker – and ask about non-bank lenders
3. Try to get a strong understanding of serviceability – the better you are prepared, the better you can deal with objections
💳 Official interest rate – to stay still
💳 APRA is not changing serviceability – it will remain ‘difficult’ to get loans
💳 Variable rates are going up, but with banks ‘ clamouring’ to the smaller amount of viable lenders, many banks are eager to win business with improved offerings
💡 The decision to keep the official interest rate on hold marks the two year anniversary of the last change to the cash rate by the RBA; the longest period of interest rate stability on record.
💡 AFR: Australia’s big four banks are exploiting rising funding costs to snatch mortgage market share from smaller rivals by lowering rates on some home loans while industry minnows are forced to raise some rates to maintain their profitability
💡 low inflation, record high household debt, a slack labour market and, more recently, falling dwelling values mean cash rate will likely remain unchanged until at least January 2020.
Despite the housing market headwinds from tighter credit conditions, the prospect of mortgage rates remaining reasonably stable should help to keep a floor under housing demand.
Interest-only mortgage borrowers move in mass to principal and interest loan discounts
The Reserve Bank of Australia said, if you are a good credit risk, you can save 15 basis points on your loan.
Just this week, Australia’s largest lender, the Commonwealth Bank, cut rates on some of its fixed-interest products for home buyers and investors, ranging from 3.79 per cent to 4.34 per cent.