This week saw major changes that will make it easier for Australians to get a mortgage.
- The government told banks to be more generous in their assessment of loan applications
- Westpac reduced the interest rate it uses to assess a loan; and
- The RBA indicated more rate cuts were on the way
Prime Minister Scott Morrison recently warned banks to not be too “sheepish” and to do away with an “instinctiveness” towards overly tough lending standards.
This was backed up by Treasurer Josh Freydneberg’s encouragement of the banks to lend more when he said “if responsible lending laws are applied too stringently, they will also negatively impact consumer behaviour.”
The Westpac Group recently announced that it would reduce the rate it would assess loan application by 0.25 per cent to 5.5 per cent.
Over recent years, Origin brokers have had to work extra-hard to arrange loans. Since regulators announced a clampdown on lending practices, our brokers have had to arrange loans with non-conforming lenders as mainstream banks have turned away many loans.
The recent changes should see it easier for clients to get finances with banks
A recent study found 70% described the home loan process negatively, calling it ‘stressful’, ‘a waiting game,’ ‘overwhelming,’ ‘confusing,’ ‘difficult,’ ‘painstaking’ and ‘rigid.’
Further, about 29% of Australians are waiting to buy property despite promising market conditions as the home loan process has been described as hard to navigate and riddled with red tape.
Home lending jumped 5.1 per cent in July, marking its biggest monthly gain in four years, as owner-occupiers and investors roared back into action as sentiment changed and credit curbs eased.
This pick-up in lending has been followed by a surge in prices in Australia’s two biggest property markets over August. Property values increased 1.6 per cent in Sydney and 1.4 per cent in Melbourne, after much milder growth in June and July.
The Reserve Bank has indicated that it is prepared to make numerous interest rate cuts and take other measures to further stimulate the economy.
Many lenders are now offering loans around 3.25 per cent. And some have gone as low as 2.99 per cent with further reductions likely.
If you have had difficulty in getting a loan but would like to revisit your application, please contact your Origin broker on 1300 30 67 67. c