Trending Financial News 16 September 2019

House prices are rising again

The property downturn is over and house prices are set to surge up to 10 per cent in the next year, according to new research by investment bank UBS.

Home loan growth hit a five-year high after June and July interest rate cuts and the easing of lending stress tests. Previously UBS was predicting house price growth up to about 5 per cent.

UBS economist George Tharenou said home loans rebounded almost 9 per cent in the two month to July amid the (federal) election, RBA rate cuts and loan rules easing by APRA (Australian Prudential Regulation Authority).

Nearing a century – of home loans under 3% pa

There are now ninety-seven – 97 – home loans with advertised rates under 3 per cent pa, including 96 for owner-occupiers, and just one for investors, on the InfoChoice database of 145 institutions.

“Every week more lenders change their rates and offer headline rates under three per cent,” said Vadim Taube, CEO of leading Australian financial comparison site,

“Lenders are not waiting to see what the RBA will do with rates, the rate cuts are coming pretty thick and fast now.

Market expectations of a rate cut in October are falling away. Traders have now priced in a 25 per cent chance of a cut by the RBA to 0.75 per cent.

How many home loans have rates under 3 per cent?

There are now six variable rate home loans with advertised rates under 3 per cent from three non-bank lenders Reduce Home Loans, Well Home Loans and Mortgage House. The highest comparison rate among these loans is 3.02 per cent pa from Mortgage House.

There are thirteen 12-month fixed home loans products with advertised rates under 3 per cent for owner-occupiers. Comparison rates on these loans range up to 4.62 per cent pa from UniBank. 

There are 25 home loans under 3 per cent with two-year fixed terms and 31 three-year fixed rate home loans for owner-occupiers. There are eight 4-years fixed home loans with advertised rates under 3 per cent and 13 five -year loans on the InfoChoice database.

Are any investor home loans under 3 per cent?

The lowest rates for investors on a 12-month fixed rate is 3.09 per cent pa from St George Bank (comparison rate 4.86 per cent pa).

For investors, the only fixed rate mortgage under 3 per cent on the InfoChoice database, across all terms from 12 months to 5 years, is Bank Australia’s Premium Package two-year ($150K – $700K, LVR=70% – 90%) Loan at 2.99 per cent pa (comparison rate 3.75 per cent pa).

Banks told: No more easy loans

Australian Prudential Regulatory Authority chief Wayne Byres warned banks not to return to the easy lending standards of a few years ago.

“With lending standards more robust, we have been able to remove the major temporary benchmarks.

“However, it is worth remembering that the original risks we were concerned about in 2014 – high prices, high debt, low interest rates and subdued income growth – have not gone away, and in some cases increased.

“When it comes to the supply of credit, it would therefore be unwise for lending standards to be allowed to erode again as a means of generating lending growth.

Don’t whinge about your bank – complain

Less than half of Aussies who have a complaint about their bank or lender actually go through with it and lodge a complaint.

“If it’s something you’ve felt strongly enough to complain about to your friends and family, chances are you have a case to pursue,” said Australian Financial Complaints Authority Chief, David Locke.

“We’re also letting people know they have one year to lodge complaints dating back to 2008,” said Mr Locke.

“Special rules around ‘legacy complaints’ have been set by the Australian Government, AFCA can accept legacy complaints until the 30th of June 2020.”

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