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The latest Reserve Bank of Australia (RBA) data has shown the impact the RBA's cash rate rises have had on the mortgage market. The key is to compare average interest rates for all outstanding loans in April 2022 – the month before the first rate rise – and August 2023 – the most recent month for which we have data. During that time, the RBA increased the cash rate by 4.00 percentage points. Interest rates for outstanding loans have, on average, increased by less than that amount, in part because some loans were fixed at lower rates. For owner-occupied loans, rates have increased by an average of:2.82 percentage points for principal-and-interest loans 3.31 percentage points for interest-only loans For investment loans, rates have increased by:2.83 percentage points for principal-and-interest loans2.73 percentage points for interest-only loansFuture interest rate hikes can't be ruled out. The conflict in the Middle East may lead to higher oil prices, and therefore higher petrol prices and higher inflation. In the RBA's cash rate meeting earlier this month, board members noted that “some further tightening of policy [i.e. rate rises] may be required should inflation prove more persistent than expected”, according to the meeting minutes.Want to compare interest rates? Let's talkHit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about How interest rates have evolved over the past 18 months

With lots of people coming off fixed rates right now, it’s no surprise that an enormous amount of refinancing is occurring, as borrowers look to switch to lower-rate loans.The latest Australian Bureau of Statistics (ABS) data has revealed that borrowers did $20.60 billion of refinancing in August – which was 3.9% lower than the month before but 12.4% higher than the year before.Meanwhile, the ABS also revealed that the value of all new home loan commitments in August was $24.82 billion, which was 2.2% higher than the month before.Owner-occupier borrowing rose 2.6% to $16.07 billion, while investor borrowing rose 1.6% to $8.75 billion.That said, home loan activity has fallen on a year-on-year basis:Total borrowing down 9.4%Owner-occupier down 12.5%Investor down 3.0% The interest rate environment has changed a lot recently, and the level of competition in the mortgage market is fierce, so there are a lot of great refinancing deals available – including with quality smaller lenders you may be unfamiliar with.Want to refinance? Let’s chat!Hit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about Australians refinance more than $20bn of loans

Household savings have now fallen for seven consecutive quarters, suggesting some consumers are finding it harder to save for a home deposit due to rising cost of living.The latest Australian Bureau of Statistics data show that the share of income that households save fell significantly between the quarters of September 2021 and June 2023:Sep-21: 19.3%Dec-21: 12.9%Mar-22: 11.3%Jun-22: 8.1%Sep-22: 7.2%Dec-22: 4.4%Mar-23: 3.6%Jun-23: 3.2% This decline in saving has been partly caused by the pandemic: people spent less during lockdown, because they were stuck at home, and then engaged in 'revenge spending' after being released. But it’s also been caused by the high inflation we’ve experienced during that time, which has forced consumers to spend more money just to buy the same items.If you have a mortgage and you’re struggling to make repayments, get in touch so we can speak to your lender. Lenders tend to be more flexible with borrowers who get on the front foot about any financial problems they may be experiencing.Want to compare interest rates? Let's talkHit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about Australians now saving just 3.2% of their income

Interest rates influence property prices, but they are not the reason that Australia has some of the highest housing values in the world, Philip Lowe said in a speech just before standing down as Reserve Bank governor.Mr Lowe said it's true that the lower interest rates that Australia has experienced for much of the past 30 years have contributed to the increase in property prices."But the reason that Australia has some of the highest housing prices in the world isn’t interest rates, which have been at roughly similar levels across most advanced economies. Rather, it is the outcome of the choices we have made as a society: choices about where we live; how we design our cities, and zone and regulate urban land; how we invest in and design transport systems; and how we tax land and housing investment," he said."In each of these areas, our society and politicians have made choices that lead to high urban land and housing costs. It is by tackling these issues that we can address the high cost of housing in Australia, which I view as a serious economic and social problem."Need a home loan? Let's talkHit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about Why Australian property prices are so high

The federal government's Home Guarantee Scheme (HGS) is helping first home buyers on modest incomes enter the market with small deposits, according to research commissioned by the National Housing Finance and Investment Corporation.Some of the key findings from the research were:The average annual income of individual HGS participants was $108,000 compared with $117,000 for the broader first home buyer marketThe average deposit paid by first home buyers since 2020 increased by 3.4% (from $35,200 to $36,400) for HGS participants but 46.7% ($108,400 to $159,000) for the broader first home buyer marketThe average loan amount since 2020 increased by 4.7% compared with 13.4% for the broader first home buyer marketThe research also found that the average HGS property has enjoyed an equity gain of $82,000.Under the HGS, first home buyers can enter the market with just a 5% deposit – but conditions apply. I can tell you whether you’re eligible and help you apply for a loan.Get in touch if you need guidanceHit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about First Home buyer scheme delivering results

The combined value of Australian real estate reached $10 trillion at the end of August, according to CoreLogic, which is the first time it's reached this level since June 2022.The increase resulted from a combination of more properties being built and the value of Australia's housing increasing.Soon after reaching the $10 trillion mark last year, the property market began a 10-month downswing, during which the national median property price fell 9.1%. Since March, prices have risen in six consecutive months, increasing by a combined 4.9%. However, the outlook is uncertain, according to CoreLogic. “While there is a growing expectation that the RBA board is done hiking the cash rate, borrowing remains constrained by a relatively high serviceability buffer,” CoreLogic said.“APRA [banking regulator] data to June showed the weighted average home loan assessment rate was just below 9%, and Australian Bureau of Statistics housing lending data shows mortgage lending has fallen for three of the past four months.”See how much you can borrow nowHit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about Australia property market passes $10trn milestone

The federal government has increased its housing construction target, in a bid to increase supply and improve affordability.Prime Minister Anthony Albanese, after meeting with the National Cabinet recently, announced a new national target to build 1.2 million well‑located new homes over five years, from 1 July 2024. That replaces the original target of 1 million homes, which was announced last year.Only 10,000 of those homes will be built by the federal government. The vast majority will be built by the private sector. Some will be built by the states and territories. As a result, the government also announced $3 billion of performance‑based funding for states and territories that achieve more than their targets and conduct reforms to boost housing supply.The government also announced an additional $500 million competitive funding program for local and state governments to kickstart housing supply.An increase in the housing supply should lead to a decrease in demand, which should put downward pressure on property prices and make housing more affordable.Need a home loan? Let's talkHit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about Albanese govt sets ambitious homebuilding target

Property investors in much of Australia are enjoying very low vacancy rates – and one leading property researcher has forecast that is unlikely to change anytime soon.The national vacancy rate in July was just 1.3%, according to SQM Research, which means there are very few untenanted rental properties right now. That makes it relatively easy for investors to find tenants and means renters will often accept higher rents to secure accommodation. “Clearly, acute rental shortages remain with us. And besides more people grouping together to share the burden, there is no significant solution on the horizon,” SQM managing director Louis Christopher said.Christopher added that the main cause of the tight rental market and fast-rising rents had been strong population growth. “Australia currently has, by far, the fastest growing population for any OECD country and clearly the rampant increases are currently breaching the country’s capacity to house all our people.”Need a home loan? Let's talk Hit the button below to arrange a conversation with one of my loan specialists to find a deal that's best for your situation. Chat to us today We partner with over 50 lenders so you can find the perfect solutionFollow Facebook Linkedin Do you have questions about mortgages or loans?Ask us in the comments below … [Read more...] about “No solution on the horizon” for tight rental market