Category Archives: Bank

RBA Interest Rates on Hold

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Rates on hold

Tuesday, 06 March 2012

Staff Reporter

The Reserve Bank of Australia has left the official cash rate on hold for the second consecutive month.

In the minutes of the Monetary Board Meeting, the Board said that “the expectation that the world economy will grow at a below-trend pace this year, but does not suggest that a deep downturn is occurring.

“Most information on the Australian economy continues to suggest growth close to trend overall, with differences between sectors and considerable structural change. Labour market conditions softened during 2011 and the unemployment rate increased slightly in mid year, though it has been steady over recent months. CPI inflation has declined as expected and will fall further over the next quarter or two.”

“Interest rates for borrowers have generally risen slightly since the Board’s previous meeting, but remain close to their medium-term average. Credit growth remains modest. Housing prices have shown some sign of stabilising recently, after having declined for most of 2011, but generally the housing market remains soft.”

The decision was largely expected, with most economists now expecting rates to stay on hold until mid-year.

RP Data’s research director Tim Lawless said capital city home values were down just 0.2 per cent over the three months leading up to the interest rate decision.

“A return to stability in the housing market is precisely the outcome the RBA have been aiming for with respect to housing market conditions,” Mr Lawless said.

“The full impact of the rate cuts from November and December last year is yet to be seen, however to date there has seen a subtle improvement in transaction numbers prior to the Christmas slow down.

“Housing finance data from the ABS has also been trending upwards suggesting we are likely to see the number of home sales continue to show modest increases over the coming months.

“Based on the recent data flows it is becoming increasingly clear that the housing market is likely to be less of a concern to the RBA.

“Mortgage arrears appear to be in check, home values are stabilising and transaction volumes are starting to tick up.”

Mr Lawless said any future downwards movement in the cash rate is likely to be more reflective of ongoing global uncertainty rather than a response to a further slowdown in housing market conditions.

“In fact, we believe that the RBA is likely to be quite comfortable with the current state of Australian housing market but will continue to closely monitoring conditions over the coming months to measure the ongoing affect of the interest rate environment on borrowing and value movements.”

Source – The Advisor. Industry news for mortgage and finance brokers

NFC National Finance Corporation Pty Ltd – Mortgage Broker www.nfc.com.au

Banks May Lift Rates Regardless of RBA

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Banks to move regardless of RBA

Tuesday, 06 March 2012

Jessica Darnbrough

Regardless of what the Reserve Bank does when the Board meets later today, Australia’s banks could lift their rates for the second consecutive month.

Speaking to The Adviser, Advantedge’s general manager distribution, Brett Halliwell, said the costs of funds have risen by approximately 100 basis points in the past few months, which is having a huge impact on Australia’s banks.

“On average, banks source approximately 30 per cent of their funds from markets that have seen costs of funds rise by 100 basis points at least,” he said.

“That is why we have seen out of cycle rate hikes and I wouldn’t be surprised to see more still as the banks look to pass on the higher costs of funds.”

ANZ was the first lender to move out of cycle last month, lifting the interest on its standard variable rate by 6 basis points.

All of the three remaining majors then followed suit, with Westpac and CBA both lifting their standard variable rates by 10 basis points, while NAB increased its SVR by 9 basis points.

ANZ’s monthly rate meeting is set to take place again this Friday, with many industry watchers now predicting the lender will look to lift rates for the second consecutive month.

If this comes to pass, it will be interesting to see whether or not the other lenders follow suit given they lifted their rates by more than ANZ last month.

Source – The Adviser. Industry News for Mortgage and Finance Brokers

RBA Meeting March 2012

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No ‘material softening’ to prompt RBA today

Rates could remain on hold for months to come as the RBA is tipped to leave the cash rate at 4.25% when it meets today.

Despite new inflation figures leaving the Reserve Bank leeway to cut rates, a survey of 24 economists by Bloomberg has shown the unanimous prediction that the RBA will not move on the official cash rate today. The TD Securities – Melbourne Institute Monthly Inflation Gauge posted only a 0.1% rise in February, leaving trimmed mean inflation at 2.1%, at the bottom range of the bank’s target band. TD Securities has claimed the result still will not provide the Reserve with enough motivation to cut rates.

"For the RBA Board meeting today, members will note that there has been next to no evidence of a ‘material softening of domestic demand’ in the last four weeks, the Bank’s clearly stated hurdle for further easing," TD Securities head of Asia-Pacific Research Annette Beacher said.

Beacher said employment, housing finance and exports had provided "upside surprises". And while fourth quarter GDP is expected to be flat, Beacher said an "outsize resource-led private investment boom" would remain on track into the next year.

"The easiest decision is to leave the cash rate at neutral for another month, and indeed it is increasingly likely to remain the case for several months to come," Beacher said.

Source – Key Media. Australian Broker News. By Adam Smith

Non Genuine Savings 95% LVR

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Major Australian Bank has reintroduced non genuine savings to Loan Valuation Ratios of 95%. This means borrowers (subject to credit approval and normal underwriting criteria) may not need to prove any savings as required by most lenders. The 5% deposit may be gift or sale of some secondary asset. The only condition is that the 5% deposit is not a loan.

This is great news for first home buyers and for borrowers who are rebuilding and have not had the chance to meet the genuine savings requirements.

Call National Finance Corporation on 07 3356 8132 or email info@nfc.com.au for more information.

Commonwealth Bank Discounts

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Commonwealth Bank Loan Valuation Ratios (LVRs) and Discounts

The Commonwealth Bank now offers a LVR of 95% (97% capitalised) for new and existing customers for all home loans and Top Ups. We are also offering discounts for loan amounts (new to the bank) ≥ $250,000 under the MAV Package (Professional Package) until 30 June 2011.

LVR is greater than 75%
• 0.70% pa – $250,000 – $499,999
• 0.75% pa – $500,000 – $749,999
• 0.80% pa for loans of $750,000+

LVR is less than or equal to 75%
• 0.75% pa $200,000 – $499,999
• 0.80% pa $500,000 – $749,999
• 0.85% pa for loans of $750,000+

NFC Mortgage Broker Special Offer

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I have received confirmation this week from one of Australia’s top 3 mortgage lending banks that I can offer a greater discount on Professional Package loans than what is advertised. In Australia there are somewhere between 11,000 and 13,000 mortgage brokers registered and this special offer is only available to a select few hundred brokers nationally.

Not all Mortgage Brokers are the same. Banks now reward Mortgage Brokers that have superior expertise and submit quality applications.

For a limited time, we can offer a standard variable interest rate discount of 0.8%. Loan valuation ratio and loan limits apply so please call NFC now on 1300 663 632 or email info@nfc.com.au for more details.