LENDING UPDATE – 14.12.10

MELBOURNE MORTGAGE FINANCE LENDING UPDATE – 14.12.10

Key lending issues

  • No changes to official interest rates in December. Lender variable rates unchanged
  • 3 year fixed rates offered by some lenders now similar to their variable rates
  • “Responsible Lending” requirements to be implemented from 01.01.2011 See below
  • Smaller banks and non-bank lenders offering very competitive packages
  • Cash incentives offered by some lenders to encourage refinance applications
  • New Federal legislation to restrict bank fees and give ACCC power to investigate interest rate collusion
  • New Victorian Government promises to significantly reduce stamp duty for first home buyers over the next 4 years
  • Mortgage insurers taking very tough stance over credit defaults on loans over 80% LVR

LENDER COMPARISON

The following table shows some of the residential mortgage products available for an average $300,000 loan. 3 year fixed rates and maximum Loan to Valuation ratios (LVRs) are also shown. 12 month discounted “honeymoon” rates have been excluded

Variable
%
$ Setup
Fee

LVR
max %

3 Year
Fixed %
PLAN Lending Performance Plus <65% LVR 6.88 nil 65 7.40
Homeside/nab Homeplus <75% LVR 6.90 762 75 7.20
Adelaide Bank Smartfit Special 6.94 695 95+LMI 7.59
ING Simplifier Smartpack Special 6.96 1218 90+LMI 7.44
PLAN Lending Performance Plus >65-90% LVR 6.98 nil 90+LMI 7.40
Police & Nurses C U Dream Home Loan 6.99 818 95 7.35
CBA Rate Saver 3 Year Special 6.99 nil 92 7.39
Rock Bld Society Rock Star Special 6.99 300 90+LMI 7.24
Homeside/nab Homeplus 75-90% LVR 7.00 762 90 7.20
AMP Basic Spring Special 7.02 545 90+LMI 7.09
Heritage Bld Society Basic 7.03 600 90 7.15

Aust First

Mortgage Flexible Full Doc 7.04 645 95+LMI 7.79
Homeside/nab Homeplus > 90% LVR 7.10 nil 95 7.20
ANZ Simplicity Plus 7.10 600 92 7.10
Bankwest Premium 7.10 nil 95+LMI 7.44
St George Advantage 7.10 495 92 7.09
CBA MAV Standard Variable 7.11 350 92 7.24
St George Basic 7.13 nil 92 7.44
Homeloans Ltd Ultra 7.14 879 90+LMI 7.74
Suncorp Back to Basics <90% LVR 7.15 600 90 7.39
Westpac Flexi First 7.16 nil 92 7.49
Westpac Premier Advantage Rocket 7.16 395 92 7.09
AMP Propack 7.17 644 90+LMI 7.24
Citibank Mortgage Plus 7.18 250 90 7.29
Citibank Basic 7.28 649 90 7.29
Bankwest Rate Cutter 7.30 nil 95+LMI 7.44
Suncorp Back to Basics >90% LVR 7.35 600 95+LMI 7.59

STANDARD VARIABLE RATES (MAJOR BANKS)

Variable
%
$ Setup
Fee
LVR
max %
NAB Tailored Variable 7.67 600 95
ANZ Standard Variable 7.80 600 92
CBA Standard Variable 7.81 600 92
Westpac Rocket Standard Variable 7.86 nil 92
Notes : each lender has specific terms and conditions which must be satisfied.
: “low doc” loans will usually be available at higher rates than shown above
: maximum LVRs shown are for purchases. Refinance applications may have lower LVRs
: CBA, ANZ, Westpac and St George will lend up to 95%+LMI only to their own customers
+LMI indicates lenders who will add the Lenders Mortgage Insurance premium to the max LVR shown

MORTGAGE INSURERS REQUIRE QUALITY LOAN APPLICATIONS

When borrowers need a loan over 80% of valuation, lenders will require that mortgage insurance be arranged. Lenders and Insurers both require clear proof of income to service total borrowings, steady employment over the previous 3 years and clean credit records. If a credit report shows defaults on previous credit contracts, this will generally result in applications for loans over 80% LVR being declined.

RESPONSIBLE LENDING” COMMENCES 01.01.2011

The 2010 National Consumer Credit Protection (NCCP) Act provides that both lenders and mortgage brokers implement “responsible lending” practices as from 01.01.2011 Brokers must now verify income and employment in more detail and clearly establish that borrowers can meet their liabilities. Additional enquiries and verification steps are required. All lenders will incorporate additional sections in their application forms to this effect. Brokers will also be required to provide all customers with a Preliminary Assessment document. This sets out the broker’s analysis of their loan proposal, confirming that the loan meets the customer’s requirements and objectives and is suitable for their needs.

REFINANCING / DEBT CONSOLIDATION

Very attractive interest rates are available to borrowers who have good equity in their properties. Refer above table. Some lenders have nil establishment fees or offer cash incentives up to $1000 to help offset refinancing costs. If other debts (eg credit card balances, personal loans) are incorporated into a total refinance loan amount, substantial reductions in monthly repayments can be achieved.

100% FINANCE

Some banks will lend 100% of purchase price only if there is an additional security property available. “Parental Guarantee” loans involve an 80% advance against the primary security property and a 20% advance against the parental property. Borrowers must show clear ability to service both loans and parents must obtain independent legal advice when signing the guarantee.

Please call Melbourne Mortgage Finance for FREE and IMMEDIATE assistance in arranging your purchase or refinance loan application.


Barry LeBrocq

Melbourne Mortgage Finance
Patterson Lakes, VIC 3197
Mob 0437417042
Web www.mmfinance.com.au

Disclaimer: The above information is intended as general information only and is not intended to address specific personal situations. While every effort has been made to ensure accurate content, it should be understood that loan products, interest rates and fees change frequently without notice. Potential borrowers should contact Melbourne Mortgage Finance to verify details and discuss their specific needs and loan eligibility.

What our customers say about us

Thanks for all your help and for making it so easy for me. Life will be so different now.

Jan Vincent
Montrose, VICTORIA

Thank you for your time on the phone yesterday and copying me into the below email.
I just wanted to take the time to say that I have never seen such a comprehensive email provided to clients by a Broker before. Very clear and detailed.
I hope it’s ok that I hold onto your details to refer to clients who may need assistance.
Kind Regards,

Shannon Oatley
Director & Licensed Conveyancer
Property Conveyancing Group, VICTORIA

We have found Barry Le Brocq of Melbourne Mortgage Finance to be very patient, caring and diligent in achieving a successful outcome to our refinancing requirement. We have no hesitation in recommending his services to others.

Don & Christine Perrett
Leongatha, VICTORIA

Many thanks Barry for the exceptional service that you have provided. We will most certainly be recommending you to our daughter (Bank of Melbourne branch manager) for any future customers who need a reverse mortgage loan.

Paul & Barb Spark
Somerville VICTORIA

 

LENDING UPDATE 14.06.19

  • LIVING EXPENSES ARE NOW A KEY ISSUE
  • COMPREHENSIVE CREDIT REPORTING NOW IN EFFECT
  • INVESTMENT LOANS AT OWNER-OCCUPIER INTEREST RATES
  • REVERSE MORTGAGE LOANS FOR SENIORS OVER 60
READ MORE

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