Trending Financial News 2 December

Business lending is in the doldrums

The latest Reserve Bank data shows a fall in the value of lenders’ business loan portfolios for the first time since early 2017. Aggregate business loan portfolios fell by 0.1 per cent in October 2019.

Business lending grew by 2.7 per cent over the 12 months to October – the lowest annual growth rate since 2014.

Lenders fighting to compete in the mortgage market

The mortgage market in Australia continues to be weak, with lenders struggling to grow their sales and battling to win customers.

The total mortgage balances in Australia grew by just 0.3 per cent in October and by 3 per cent over the past 12 months.

Owner-occupier balances were up 0.4 per cent month-on-month and by 4.8 per cent over 12 months. Investor loan balances were flat month-on-month and down 0.2 per cent over 12 months.

Borrowers still like Commonwealth Bank

The big four banks are struggling to make headway in a highly competitive mortgage market. Only Commonwealth Bank is making gains and winning new customers.

ANZ recorded growth of 0.1 per cent in October, after suffering a net outflow of mortgage business over the past six months.

NAB’s mortgage book was flat in October and flat over 12 months. The value of Westpac’s mortgage book fell 0.6 per cent in October and fell 0.7 per cent over the past 12 months.

RBA expected to keep rates steady

Expectations of another RBA rate cut in December are low according to market trading – (11 per cent expectation of a cut according to ASX Futures on Friday 29 November).

The RBA board is due to meet tomorrow, 3rd December 2019. The governor of the RBA, Dr Philip Lowe, has signalled that the board will keep the cash rate low for an extended period of time.

You can keep up to date with RBA rate expectations at InfoChoice.

Five year fixed rates go under 3%

Borrowers can lock in a fixed mortgage rate under 3 per cent for five years.

“There are now 28 home loan products with advertised fixed five-year rates under three per cent listed on InfoChoice,” said Vadim Taube, CEO of InfoChoice.com.au.

The lowest variable home loan comparison rate is 2.7% pa with 110 variable home loan products for owner -occupiers now charging advertised rates less than 3.3 per cent pa.

“A standout deal in the fixed rate market is UBank’s 2.69% pa (comparison rate 3.19% pa) fixed for three years,” said Vadim Taube.

Hundreds of fixed rates under 3%

There are now hundreds of fixed rate mortgage products now with advertised rates under 3 per cent pa listed on InfoChoice. There are 36 one-year fixed rate home loans under 3% pa. There are 76 two-year fixed rate home loans under 3% pa. There are 73 three-year fixed rate home loans under 3% pa. There are 20 four-year fixed rate home loans under 3% pa.

How much can you save by switching home loans?

Right now there are 10 variable rate home loans under 2.9 per cent pa listed on InfoChoice and hundreds of fixed rate home loan products with advertised rates under 3% pa.

Switching from a $300,000, 25 year home loan charging 4.0 per cent pa to a loan charging 2.9 per cent pa could save a borrower  $52,929 over the life of the loan according to the InfoChoice refinancing calculator.

“Even switching from a loan charging 3.5 per cent to a really low-rate mortgage of 2.9 per cent pa or less can save you almost one hundred dollars per month and $28K over the loan,” said Vadim Taube, chief executive of InfoChoice.

No better time to refinance

The Reserve Bank has released data showing that borrowers in 2019 are winning rate cuts for themselves.

“The RBA has reported that borrowers are getting rate cuts themselves by comparing, switching and negotiating with lenders,” said Vadim Taube, CEO of InfoChoice.

“There’s no better time to refinance than right now to a super low rate and the RBA has reported last week that many Aussie borrowers are doing just that.”

Compare over 1800 home loan products from 145 banks, credit unions and other institutions at InfoChoice.

Ten market-leading low-rate mortgages

There are now more than ten low-rate home loan products with advertised rates under 2.9 per cent pa listed on InfoChoice.

The lowest variable home loan rate for owner occupiers paying principal and interest is currently 2.69 per cent pa (comparison rate 2.7 per cent pa) from Reduce Home Loans.

“If your bank is not offering you a great rate, you can find alternatives that can reduce your repayments by hundreds of dollars per month easily at the moment,” said Vadim Taube, CEO of InfoChoice.

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