Home Loans & Mortgages

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.

The Federal Government’s attempt to blame the states for home mortgage interest rate pressures is complete nonsense and smacks of political desperation, the NSW Government says. NSW Treasurer Michael Costa hit back at suggestions the state governments were increasing home loan interest rate pressures through heavy borrowing for infrastructure projects. The Howard Government is bracing itself for [...]

Australian homeowners and renters on hurting over mortgage rates, reduced family support, housing bubble concerns. Home buyers are disinterested.

So perhaps the RBA hinted interest rate rise won’t happen in June, even thought its still likely and we predicted it last month. New facts have emerged since then.

Some economists now say that home loan interest rate rise could push homeowners and renters over the top as mortgage rates for homeowners and landlords would increase the cost of living. It would also make home buyers stay away from the housing market and further add to falling home values. That would have to hurt bank profits.