Wednesday 5th August 2015Borrowers Warned to be Careful in Changing Lending Landscape
Home loan customers need to tread carefully in the changing lending landscape despite the Reserve Bank of Australia (RBA) keeping official interest rates on hold, says mortgage broker network 1300HomeLoan.
1300HomeLoan Managing Director John Kolenda said while the RBA has kept its cash rate at a record low of 2.0 per cent, a range of other developments have changed the goal posts for many thousands of borrowers and caused unprecedented confusion.
Mr Kolenda said the decision of the major banks and other lenders to raise interest rates for investment loans as well as revised borrowing conditions means the RBA’s rate deliberations have become almost irrelevant for some borrowers.
“The actions of the banks to increase rates in response to industry and regulator concerns about the growth in investor lending has changed the lending landscape,” he said.
“In the history of home loan lending it has never been more confusing for borrowers and without proper consultation it is easy to make a very costly mistake. Not only does this apply to consumers looking at taking out a home loan but those recently affected by the changes.”
Mr Kolenda said continued global uncertainly, particularly in Greece and China, as well as mixed signals from the domestic economy will keep the RBA on the sidelines for a few more months.
“We still may see another rate cut before the end of the year if domestic economic conditions decline and unemployment rises,” he said.
“That is of some comfort for most mortgage holders, especially those with investment loans facing increases, as they can still expect official rates to remain low compared to historical averages for the next few years.”