Latest NewsHome Buyers Cash in on Relaxed Loan TermsFriday, 17 March 2017

Homebuyers have been returning to the market, lured by a steady interest rate outlook and cooling house price growth, with demand for mortgage loans picking up.

Signs are emerging the big banks are letting home owners borrow more. Mortgage brokers report that some lenders are relaxing lending standards.

This pick-up in credit growth continues to benefit the big four banks.

Smaller banks and other lenders continue to be priced out, according to the latest snapshot into the nation's mortgage industry by JPMorgan and Fujitsu Australia.

Pressured by three consecutive monthly interest rate rises and rising prices across Australia's east coast, demand for housing loans eased this year.

In May housing credit was running at a three-month annualised growth rate of 6 per cent. This had risen to 8.2 per cent, the report found.

Yesterday the Bureau of Statistics said seasonally adjusted housing finance commitments rose 1.7 per cent in July.

The result easily beat the median market forecast of a 1 per cent rise in housing finance commitments in the month.

Housing credit is expected to continue to grow in the financial year, JPMorgan's banking analyst, Scott Manning, said.

But with more people choosing to take variable rate loans, this had left households "delicately poised", he said.

While official rates were expected to remain on hold, borrowers could soon be tested by higher rates as their banks look to recoup funding costs.

Mr Manning said recent warnings by bank bosses that higher deposit rates and wholesale borrowing costs were starting to bite suggested there could be an out-of-cycle rate rise.

Previous Next

Share This Article




Previous Articles