Finance Watch’s Post

Is Australia on the Verge of a Mortgage Lending Revolution? The Coalition’s proposal to deregulate mortgage lending is stirring up debate. By potentially removing APRA’s regulatory powers and relaxing responsible lending laws, the mortgage landscape for first-home buyers could change dramatically. But are these changes beneficial, or do they pose risks? Key points: Global lessons: In the U.S., deregulatory moves led to a surge in mortgage defaults without solving housing affordability. Current safeguards: Australia's prudent lending standards, like higher loan-to-valuation ratios, have made our mortgage market more resilient. Potential risks: Deregulation could increase house prices, worsening affordability, as seen after previous financial deregulations. Expertise matters: At Punters Finance, we’ve seen how responsible lending and specialist loans can serve those sidelined by traditional lenders. Is deregulation the answer to housing affordability, or are we risking international missteps? So, what do you think? Is deregulation the key to Australian housing affordability, or should we tread carefully to avoid repeating international missteps? Let's explore together. #MortgageMarket #HousingAffordability #FinancialRegulation #AustraliaHousing #MortgageBrokers"

The answer is yes, but you need to look at this in a UK specific context, not just looking at other countries and two variables. Cultural and historical differences and rights of renters play an important role. What is obvious across all countries is that long term fixed rate mortgages remove market risk and thus improve the stability of household budgets. This means reduced systemic risk, and reduction in spending in the time of economic shocks, exactly what the Bank of England is worried about. The reason why it is a yes in the UK is simple: the product offering. Households cannot allocate the budget they have for housing because they are being stressed at a margin linked to the relatively very high reversion rate (7.69% on average according to Bank of England data) after the cheap short term fixed rate runs out. In addition, misaligned policies such as the LTI cap are a barrier to the introduction long term fixed rate mortgages, removing the incentive for large lenders to introduce these products. The number of mortgage accounts is shrinking, home ownership is reducing, aligned policies and long term fixed rate mortgages can improve the market. ps: pretty sure Italy has long term fixed rate mortgages.... Gabija Zemaityte Bank of England Financial Conduct Authority HM Treasury #homeownership #firsttimebuyers #longtermfixedratemortgages

“Loans in arrears represent a small share of total housing lending,” the Reserve Bank of Australia (RBA) has reported in its latest Financial Stability Review, confirming that the overwhelming majority of borrowers are keeping up with their mortgage repayments. “Less than 1% of all owner-occupier housing loan balances are 90-plus days in arrears. While banks expect arrears to increase slightly, arrears rates remain around their pre-pandemic levels.” That said, the RBA noted that loan arrears had risen steadily from late 2022, shortly after interest rates started increasing. Borrowers with high loan-to-value ratios or high loan-to-income ratios have been most likely to fall into arrears. “By contrast, arrears rates of other mortgagor groups, such as recent first home buyers, have not risen as much,” the RBA said. “The same observation holds for those who borrowed at low (including fixed) rates, most of whom have now transitioned to loans with higher interest rates.” Concerned about rising interest rates or loan arrears? Stay informed and take control of your financial future! Our expert brokers are here to guide you through the changing market and help you navigate your options. Contact us today for personalized advice and solutions. https://lnkd.in/g6Yi4XYa . #CentralLendingSolutions #property #realestate #homeloans #PropertyMarket #RealEstateUpdates #HomeLoans #MortgageAdvice #LoanArrears #FinancialStability #InterestRates #FirstHomeBuyers #PropertyFinance #MortgageTips #FinanceExperts #RBA

𝗥𝗕𝗔 𝗛𝗶𝗴𝗵𝗹𝗶𝗴𝗵𝘁𝘀 𝗥𝗲𝘀𝗶𝗹𝗶𝗲𝗻𝗰𝗲 𝗼𝗳 𝗕𝗼𝗿𝗿𝗼𝘄𝗲𝗿𝘀 “Loans in arrears represent a small share of total housing lending,” the Reserve Bank of Australia (RBA) has reported in its latest Financial Stability Review, confirming that the overwhelming majority of borrowers are keeping up with their mortgage repayments. “Less than 1% of all owner-occupier housing loan balances are 90-plus days in arrears. While banks expect arrears to increase slightly, arrears rates remain around their pre-pandemic levels.” That said, the RBA noted that loan arrears had risen steadily from late 2022, shortly after interest rates started increasing. Borrowers with high loan-to-value ratios or high loan-to-income ratios have been most likely to fall into arrears. “By contrast, arrears rates of other mortgagor groups, such as recent first home buyers, have not risen as much,” the RBA said. “The same observation holds for those who borrowed at low (including fixed) rates, most of whom have now transitioned to loans with higher interest rates.” #property #realestate #homeloans

This is a really interesting article and begs the question of why the US Banking System can offer very long term fixed rates , yet Australian Banks either can't or wont. The US House Mortgage industry is far more competitive than Australia with very little rate differential between Tier 1 and say Tier 2 and 3 banks. There is an argument that Australia does need more competition.

Today the Bank of England voted to reduce interest rates from 5.25% to 5%. Commenting on the decision, Kevin Shaw, our National Sales Managing Director, said: "The reduction in interest rates announced by the Bank of England today is good news for the property industry and the millions of people wishing to move, remortgage or get onto the housing ladder after a period of uncertainty. "LRG (our umbrella company) has seen positive trading in July, with sales figures strong and an increasing number of new applicants registering. Today’s decision is a strong indication that growth is here to stay. "There’s lot of pent-up demand in the market after months of political uncertainty and today’s decision on rates is the starting pistol that we’ve been waiting for. "After a good July, we look forward to an even better August and the likelihood, in many cases, of getting people into their new homes before Christmas." #bankofengland #baserate #interestrate #mortgages #movinghome

Today the Bank of England voted to reduce interest rates from 5.25% to 5%. Commenting on the decision, Kevin Shaw, our National Sales Managing Director, said: "The reduction in interest rates announced by the Bank of England today is good news for the property industry and the millions of people wishing to move, remortgage or get onto the housing ladder after a period of uncertainty. "LRG (our umbrella company) has seen positive trading in July, with sales figures strong and an increasing number of new applicants registering. Today’s decision is a strong indication that growth is here to stay. "There’s lot of pent-up demand in the market after months of political uncertainty and today’s decision on rates is the starting pistol that we’ve been waiting for. "After a good July, we look forward to an even better August and the likelihood, in many cases, of getting people into their new homes before Christmas." #bankofengland #baserate #interestrate #mortgages #movinghome

Today the Bank of England voted to reduce interest rates from 5.25% to 5%. Commenting on the decision, Kevin Shaw, our National Sales Managing Director, said: "The reduction in interest rates announced by the Bank of England today is good news for the property industry and the millions of people wishing to move, remortgage or get onto the housing ladder after a period of uncertainty. "LRG (our umbrella company) has seen positive trading in July, with sales figures strong and an increasing number of new applicants registering. Today’s decision is a strong indication that growth is here to stay. "There’s lot of pent-up demand in the market after months of political uncertainty and today’s decision on rates is the starting pistol that we’ve been waiting for. "After a good July, we look forward to an even better August and the likelihood, in many cases, of getting people into their new homes before Christmas." #bankofengland #baserate #interestrate #mortgages #movinghome

Today the Bank of England voted to reduce interest rates from 5.25% to 5%. Commenting on the decision, Kevin Shaw, our National Sales Managing Director, said: "The reduction in interest rates announced by the Bank of England today is good news for the property industry and the millions of people wishing to move, remortgage or get onto the housing ladder after a period of uncertainty. "LRG (our umbrella company) has seen positive trading in July, with sales figures strong and an increasing number of new applicants registering. Today’s decision is a strong indication that growth is here to stay. "There’s lot of pent-up demand in the market after months of political uncertainty and today’s decision on rates is the starting pistol that we’ve been waiting for. "After a good July, we look forward to an even better August and the likelihood, in many cases, of getting people into their new homes before Christmas." #bankofengland #baserate #interestrate #mortgages #movinghome