Major home loan lenders dramatically lower effective interest rates to compete for mortgage shoppers home loan business. As the big mortgage players slashing margins to lower the effective mortgage interest rates to attract home buyers and mortgage refinance business, the smaller home loan lenders plan to join in.
Consumer finance research firm Cannex said that lenders had reported cuts to 54 fixed rate mortgages since the beginning of October.
Cannex financial analyst Harry Senlitonga said now may be a good time to consider a fixed rate loan with competition for customers in the increasingly popular fixed market driving lenders to cut rates.
"We are expecting to see more lenders follow in the next few weeks," he said.
Mr Senlitonga said rates had fallen an average 0.12 per cent in three-year fixed mortgages, while the five-year fixed rate category had dropped an average 0.17 per cent.
Fixed rate mortgages have gained popularity since the Reserve Bank of Australia (RBA) raised interest rates in May and August this year, bringing the official interest rate to 6.0 per cent.
Following the latest move, the number of fixed rate loans taken out by owner-occupiers jumped to 20.4 per cent in August from 16.2 per cent in July, according to Australian Bureau of Statistics (ABS) data.
As a result, lenders are now trying to capitalise on the increased demand for fixed rate loans as they scramble for customers in a shrinking market.
The ABS figures showed that both the number of mortgages taken out and the amount borrowed by consumers fell in August, dropping 1 per cent and 1.3 per cent respectively.
RESI Mortgage national consumer advocacy manager Lisa Montgomery said there were some great fixed rates because of the increased competition.
"We are actually seeing that there are a lot of good rates out there for consumers to fix into," Ms Montgomery said.
But she warned borrowers that fixing 100 per cent of their loan may not be the best financial move.
"There needs to be some caution displayed because when you do fix in - someone is going to lose - and it's either going to be the institution or it will be the consumer," she said.
While RBA governor Glenn Stevens said this week that the chances of another interest rate rise were high, most economists believe that rates have neared their peak and some even think rates may begin to come down next year.
"If you are looking to fix in, sit on the fence with perhaps 50 per cent of your loan and keep the other 50 per cent variable," Ms Montgomery said.
She said that by doing this, borrowers effectively had the comfort and piece of mind that came with a fixed rate but also the flexibility to make extra payments, which generally cannot be done with fixed mortgages.
As well, by only fixing part of the loan, borrowers could also take advantage of any potential falls in interest rates.
"So you're actually getting the best of both worlds," she said.
Source AAP
Sunday, October 22, 2006
Thursday, October 19, 2006
Sacked mortgage staff refuse to train their overseas replacements
Regional mortgage lender St George Bank has hit union trouble in its bid to sack local IT specialists and repleace them with cheap overseas labour.
The Finance Sector Union (FSU) will meet St George Bank management today, after staff who are being made redundant refused to train their replacements yesterday.
FSU national secretary Paul Schroder says the jobs of 60 IT staff from Kogarah in Sydney are being outsourced.Mr Schroder says the staff voted to defy orders to train their replacements, who were flown in from overseas this week.“You can get people to work for less than $100 per week to do this work,” he said.“This bank is a profitable bank - it doesn’t need to do this but it is doing this to cut its own costs.“We think that’s the wrong decision for the whole economy and for the bank in particular.“But it’s particularly nasty to expect the people who are losing their jobs to train the people who are taking them.”St George Bank spokesman Jeremy Griffith says the workers do not have to train their replacements if they do not want to.The bank says it has invited staff to apply for jobs in other areas.
If you are a mortgage shopper we suggest that you consider your values when placing your business. After all the mortgage business is a local business, and should be using local people to service the community.
The Finance Sector Union (FSU) will meet St George Bank management today, after staff who are being made redundant refused to train their replacements yesterday.
FSU national secretary Paul Schroder says the jobs of 60 IT staff from Kogarah in Sydney are being outsourced.Mr Schroder says the staff voted to defy orders to train their replacements, who were flown in from overseas this week.“You can get people to work for less than $100 per week to do this work,” he said.“This bank is a profitable bank - it doesn’t need to do this but it is doing this to cut its own costs.“We think that’s the wrong decision for the whole economy and for the bank in particular.“But it’s particularly nasty to expect the people who are losing their jobs to train the people who are taking them.”St George Bank spokesman Jeremy Griffith says the workers do not have to train their replacements if they do not want to.The bank says it has invited staff to apply for jobs in other areas.
If you are a mortgage shopper we suggest that you consider your values when placing your business. After all the mortgage business is a local business, and should be using local people to service the community.
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