MELBOURNE MORTGAGE FINANCE LENDING UPDATE – 24.11.10

Key lending issues

• All lenders have now announced their new variable mortgage loan rates
• Smaller banks and non-bank lenders are now very competitive compared to the major banks
• Several lenders have introduced cash incentives up to $1000 to encourage refinance applications
• Early exit/deferred establishment fees have been eliminated or reduced by some banks, but not by Westpac.
• Loans up to 95% of valuation are readily available, but savings and income proof are essential
• Genuine savings of 5% deposit required by most lenders. One lender will accept 3% genuine savings.
• First Home Owners Grant is $7,000 for established properties, $20,000 for newly-built properties. Conditions apply.
• Some lenders are offering excellent rates as a reward for greater deposit or equity.
• Loans involving fixed rates have increased from 5% to nearly 20% of all new loan applications

LENDER COMPARISON

The following table shows some of the better variable rate residential mortgage products for an average $300,000 loan. Current 3 year fixed rates are also shown, as well as lender maximum loan-to-valuation ratios (LVRs). 12 month “honeymoon” products are excluded:

		Variable %	LVR max %	3 Year Fixed %
PLAN Lending	Performance Plus <65% LVR	6.88	65	7.30
Homeside/nab	Homeplus <75% LVR	6.90	75	7.20
Adelaide Bank	Smartfit Special	6.94	95+LMI	7.59
ING	Simplifier Smartpack Special	6.96	90+LMI	7.44
PLAN Lending/nab	Performance Plus >65%LVR	6.98	90+LMI	7.40
Police & Nurses C U	Dream Home Loan	6.99	95+LMI	7.35
CBA	3 Year Special Rate Saver	6.99	90+LMI	7.39
The Rock Bld Society	Rock Star Special Offer	6.99	95	7.24
Homeside/nab	Homeplus 75-90% LVR	7.00	90	7.20
AMP	Basic Variable Spring Special	7.02	90+LMI	7.09
Heritage Bld Society	Basic	7.03	90	7.15
Homeloans Ltd	Ultra < 65% LVR	7.04	65	7.74
Homeside/nab	Homeplus > 90% LVR	7.10	95	7.20
Bankwest	Premium	7.10	95+LMI	7.44
ANZ	Simplicity Plus	7.10	92	7.10
St George	Advantage	7.10	92	7.09
CBA	MAV Standard Variable	7.11	90+LMI	7.24
St George	Basic	7.13	92	7.44
Homeloans Ltd	Ultra > 65%	7.14	90+LMI	7.74
Suncorp	Back to Basics <90% LVR	7.15	90	7.39
Westpac	Flexi First	7.16	92	7.49
Westpac	Premier Advantage Rocket	7.16	92	7.09
Aust. First Mortgage	Complete Option	7.17	90+LMI	7.63
Bankwest	Rate Cutter	7.30	95+LMI	7.44
Suncorp	Back to Basics >90% LVR	7.35	95+LMI	7.59

STANDARD VARIABLE RATES (MAJOR BANKS)

		Variable %
NAB	Tailored Variable	7.67
ANZ	Standard Variable	7.80
CBA	Standard Variable	7.81
Westpac	Rocket Standard Variable	7.86

Notes :	each lender has specific terms and conditions which must be satisfied.
:	“low doc” loans will usually be offered at higher interest rates than shown above
:	CBA, Westpac, St George and ANZ will lend up to 95%+LMI only to their own existing customers. Conditions apply.
:	+LMI indicates those lenders who will add the mortgage insurance premium to the maximum LVR shown

CONSIDER REFINANCING

Borrowers should carefully consider the benefits of refinancing to another bank. If your current interest rate is around 7.1-7.2%, the costs of refinancing may not justify the move. It could take 2-3 years to recoup these costs in the pursuit of a marginally lower interest rate. However, many borrowers are being charged the full standard variable rate of 7.7-7.8%. In these circumstances, refinancing may well be justified, especially if exit costs are minimal and the new lender does not charge an application fee and/or offers a substantial cash incentive to refinance.

INVESTMENT PROPERTY PURCHASES

Melbourne Mortgage Finance would be pleased to introduce you to specialists who can assist you with the purchase of residential investment property including specialist taxation and accounting advice and regular reviews of your portfolio position.

PERSONAL RISK INSURANCE REVIEW

We also offer access to expert insurance brokers who can find the most competitive deal for personal risk insurance from 10 leading Australian insurance companies. Personal risk insurance includes: life insurance, income protection, disability and trauma cover.

Please call Melbourne Mortgage Finance for FREE and IMMEDIATE assistance with the arrangement of your mortgage loan for purchase or refinance

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 that content is accurate, potential borrowers should contact Melbourne Mortgage Finance to verify details and discuss their specific needs and loan eligibility.