By Rick Adlam on Monday, March 22, 2010
The deposit guarantee enjoyed by Australia’s banks for their customers deposits may be ending soon if recent comments by Reserve Bank Of Australia’s Governor Glenn Stevens are heeded.
Australia’s mortgage home loan finance costs were probably lowered as a result of the Government guarantee, and desposit customers concerned about any banks strength would have otherwise fled to other banks overseas that issued guarantees.
You may recall that this wholesale guarantee was set up late last year by the government during the heat of the global financial crisis as banks struggled to raise money on world markets.
That crisis passed largely passed
Australia, as the underlying strength of
Australia’s economy, the strength and controls of
Australian Banks, and the Rudd Stimulus Package held firm.
The Labor Government’s guarantee was indefinite. However most other nations had limited their bank guarantees to the end of 2009.
At the time of setting up the guarantee, the Government also announced the first leg of three stimulus packages to fend off the threat of steep decline in the global economy.
Mr Stevens also praised Kevin Rudd’s fiscal policy stimulus saying it had helped support the economy and that the size and speed of that response has been important in supporting businesses over the past nine months.
Last week the
RBA also upgraded its economic growth forecasts, with a consensus that the budget blowout will be much smaller than forecast.
All in all, things are looking pretty good for
Australia’s prospects in housing and
mortgage lending and the underlying strength of
Australia’s Home
loan lenders.
Posted in Australian Economy, Banks, Reserve Bank of Australia | Tagged Finance Costs, Global Financial Crisis, Home Loan Finance, Home Loan Lenders, Kevin Rudd, Labor Government, Mortgage Home Loan, Mortgage Lending, RBA, Reserve Bank of Australia
By Rick Adlam on Monday, March 22, 2010
Mortgage Rates in Australia the lowest in 45 years.
Mortgage Interest rates are now at their lowest point in 45 years with the news that the RBA has cut the official cash rate 100 points this afternoon to 3.25 per cent per annum.
Westpac passes on the Full Rate Cut
Out of the big banks, Westpac has passed on the full 100 point cut to its standard variable home loans. Commonwealth, ANZ, NAB say rates are currently under review.
The Government said it expected economic growth to be just 1 per cent in 2008-09, slowing to a mere 0.75 per cent in 2009/10.
RBA governor Glenn Stevens said the board took into account the package of measures announced by the Government earlier today.
“The combination of expansionary monetary and fiscal policies now in place will help to cushion the Australian economy from the contractionary forces coming from abroad,” he said.
$166,000 average Monthly Mortgage Savings on a $254,000 mortgage
The one percentage point cut will save homeowners an average of $186 a month in mortgage repayments, depending on the size of their home loan and on the basis that their home loan is not a fixed rate mortgage loan . The nation’s banks with the exception of Westpac, had yet to announce any reduction in home loan rates, with most saying rates were currently under review.
This brings the total rate reduction a massive 400 basis points off mortgage finance by the Reserve Bank of Australia since September last year.
Posted in Australian Economy, Banks, Reserve Bank of Australia, Westpac | Tagged Mortgage Rates, RBA, Reserve Bank of Australia official cash rate
