Home Loans & Mortgages

Its official. People don’t like big banks, and they love to hate the CBA The big four banks in my view are in a privileged position in the Australian Business World, almost cocooned and protected in law, but act as if they have made their own luck, and pay their top people accordingly. Shameful associations [...]

Fitch Ratings found that Australia’s mortgage lenders and mortgage insurers could handle a 40 percent overall drop in property values, coupled with a home loan default rate of 8 percent.
Its important to realise here that this is a stress test modelling, not a likely scenario, according to Fitch.

The major banks will have to raise mortgage interest rates, without the Reserve Bank moving rates sooner or later, and the RBA knows this.
The RBA can now sit back and watch the major banks squirm, knowing they’re under pressure to raise rates. This tension will create more uncertainty of a rate rise in November and by then the banks will have to move on mortgage rates even if the RBA sits on its hands. Result? The RBA can leave interest rates as is because the major banks will do its job for them.That is, if cooling the housing marking further is one of its aims.

For many of us having to use a bad credit home loan can be more a case of bad luck than bad money management. Most people that are in work will pay their home loans and other credit loans on time and thereby retain clear credit ratings and a high credit score. How ordinary people [...]