Home Loans & Mortgages

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?

Reserve Bank of Australia’s Governor, Mr Glenn Stevens gave a big hint as August as likely time for another move to increase interest rates. That would mean a flow on to mortgage home loan interest rates within days. Australia has three nice problems to have: A positive trade boom Mostly created by a mining boom [...]

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.

The reason house prices are so high is that it has been easy for people to get into so much debt, increasing the pool of house buyers. To reduce the pool of homebuyers, either build more housing stock, or, make credit less available.

Interest rate rises hit everyone, those with higher pays in the Mining States of Western Australia and Queensland, as well as those consumer based economies in States in the South Eastern States of Australia, who haven’t enjoyed these pay rises businesses who can only dream of the raises in demand for their goods and services, or workers not enjoying the higher employment rates in high income work, as the wealth of the mining boom filters through the economy.