Borrowers who fixed their mortgages earlier this year in the hope of beating rising interest rates could face a $17,000 fee if they want to take advantage of cheaper loans.
Fortunate consumers on an average $250,000 standard variable home loan are set to save $128 a month from next week if the Reserve Bank of Australia […]
International Property Investment.com report
Although the rate of mortgage defaults: or mortgage stress as the Australian Press likes to call it is nothing like the overseas rates it is on the way up in Australia.
The western suburbs of Sydney have been Australia’s hotspot for mortgage stress for sometime but the latest report from Fitch Ratings has three new areas which have rapidly increased their level of mortgage defaults. These include the Gold Coast, Regional NSW particularly Gosford, Woollongong and Newcastle, and last and somewhat surprisingly, eastern metropolitan Perth.
Loan defaults have jumped 50% in the last six months to September. That is an impressive percentage increase but in fact the rate of mortgage default has jumped from 1.4% to 2.1% so the actual rate is still laughably low from a North American or European perspective.
Unfortunately this is possibly just the start for Australia. Although petrol prices are dropping by the day and the mortgage interest rates are coming down nearly as fast, the concern is that unemployment will start to rise, and the usual will rapidly hit the air conditioner as Australians are one of the world’s biggest consumers of personal debt. The effect in Western Australia and the mortgage belts of eastern and southern Perth could be particularly significant. Many of the people who have been earning six-figure salaries in the mining industry are some of the first to be affected if China stops buying. Exploration and contract services companies are already seeing contracts and funding disappear. Those that thought earning $100,000 / year gave them ability to spend $120,000 year are now about to find that a debt driven lifestyle really isn’t a smart move in an economy driven by the fickle mining industry.
The jobs will come back, the problem is that most people can’t afford to be without a paycheck for even one month never mind five or six.
In the meantime there is one spot of good news in this gloomy picture. Signwriters are doing well out of the softening market. Trident Signs is reporting they erected a total of 1351 signs in October, a significant increase over the 975 of the pervious month. And the signs are getting bigger, and the real estate agents want two or three signs per a property. Sign writing anyone?
Tuggeranong home owners find it hardest to make mortgage repayments, according to new figures that show the southern suburbs have the highest rate of arrears in the ACT.
Canberra welfare agencies say it is not just the poor who are struggling: middle-class families are seeking help in unprecedented numbers as the global financial crisis and increased cost of living takes its toll.
An analysis of ‘’mortgage delinquency'’ around Australia by credit rating agency Fitch Ratings found that from November 2007 to September 2008 the number of mortgages more than 30 days in arrears increased from about 1.4 to 2.1 per cent.
The report found the ACT fared better than the states.
IN the past decade, franchised mortgage brokers have experienced boom times.
Mortgage Choice, RAMS, Wizard and others have expanded to meet the demand for credit from the proliferation of non-bank credit providers — until recently.
There’s no escaping the brutal reality of the credit crisis: it’s hitting the big banks hard and the non-bank sector hardest. According to the Mortgage and Finance Association of Australia, the market share of non-bank mortgage originators has declined from a peak of 15 per cent to about 4 per cent, bringing an abrupt halt to the trend from the late 1990s. The appeal of buying into a branded, non-bank franchise may be waning.
Mortgage broker Otto Dargan says his experience working in a franchise environment before moving to be an independent was instructive. "The franchisee had a lot of controls placed on them. People trust brands but the franchisees are disadvantaged by not being able to operate freely in their markets," Dargan says. "Commission structures are stacked in favour of the franchise group The agreement terms are onerous."
A GOVERNMENT-backed committee has raised doubts over whether major banks are actively competing with each other in the nation’s mortgage market, as smaller lenders fall away after being squeezed by funding markets.
The findings by the House of Representatives Standing Committee on Economics are expected to revive concerns that banks have been profiting by not fully passing on recent interest rate cuts made by the Reserve Bank of Australia.
The committee report outlined measures aimed at boosting liquidity across funding markets, but stopped short of establishing a so-called AussieMac agency that would buy mortgage-backed bonds.