Home Loans & Mortgages

A price war in Australia’s mortgage home loan market is under way, with National Australia Bank following ANZ and Aussie Home Loans in reducing home loan interest rates.

Tenants that rent homes across Australia look set for a short-term reprieve from rising rental prices, with analysts expecting landlords to pass on the benefits of home loan interest rate cuts.

If you can get a better loan interest rate just by asking, what does that tell you about the bank? Its ripping all their clients off! So why would you continue to do business with them at all? As an analogy, if you discovered your baker was taking a slice out of every loaf he sold you for the last two years, would you be happy if he just said he would stop robbing you from now on? No. So why does this logic not apply to home loans?

With most mortgage interest rate crystal gazers, Mr Mortgage included, expecting the RBA to increase the cash rate by 0.5% this this year, it might be tempting to think about fixed interest rate.

The two things against this are that we have seen base rates rise by nearly 2% since the GFC, and that was the time to fix. The other reason this might be a bad idea is that the RBA talks about rate rises a lot more than it actually raises the cash rate.
The motives for raising interest rates are skimpy.

Accumulative home loan mortgage interest rate rises, coupled with higher home prices around Australia have pushed housing affordability to its lowest level on record. The Commonwealth Bank of Australia – Housing Industry Association (HIA) Quarterly Review of Housing Affordability for the September quarter showed the index falling 2.1 per cent to be 8.3 per cent lower [...]