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Banks, ACT 2906 Review

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John

John

Banks
The latest indicator mortgage lending rates from the Reserve Bank of Australia (RBA) revealed that the average discount variable mortgage rate was just 3.65% at the end of September, whereas the average 3-year fixed rate was even lower at just 2.35%: According to RateCity, mortgage rates offered by Australia’s big four banks could fall below 2% if the RBA cuts the official cash rate to just 0.1%: “There are 12 lenders now offering home loans below 2 per cent, and the list is growing by the week,” she said. “With a possible rate cut waiting in the wings, we could even see a big four bank break the 2 per cent barrier over the next few months”… In April the lowest variable rate across all lenders was 2.39 per cent. In September it was 1.89 per cent – a decline of 50 basis points. The Reserve Bank of Australia has begun providing three-year funding to banks at 0.25% for mortgages. Banks can probably use this money to go below 2% for three-year loans. And that is just the beginning. It started in April with an “initial” funding allowance for banks. Then an “additional” funding allowance. Now there is a “supplementary” one. There is clearly a risk of running out of adjectives to describe the bank funding. But there is no risk of running out of the desire to keep the property market ticking over with low interest rates and oodles of credit. The Treasurer’s announcement last week requesting banks to start lending irresponsibly confirmed that for anyone who still doubted. Source: x Mortgage rates set to tumble below 2% - MacroBusin... The latest indicator mortgage lending rates from the Reserve Bank of Australia (RBA) revealed that the average discount variable mortgage rate was just 3.65% at the end of September, whereas the avera... www.macrobusiness.com.au
0 Reply 36 Views 23D ago
Sam2019

Sam2019

Banks
A new survey has found that almost half of Queenslanders have had their incomes cut or soon to be cut because of COVID-19, with concern for mortgages now. The Queensland figure (49 per cent) is higher than the national average (45 per cent), according to the results of the research released by financial comparison service comparethemarket.com.au. It asked respondents if they were losing income because of social restrictions, and changes they would make to their finances as a result, including mortgage repayments. Homeowners are rethinking ways to cope with job loss and potential job loss due to COVID-19 restrictions, with banks offering several options now for mortgage support. The survey found that two in every five Queensland respondents (40 per cent) were concerned about meeting mortgage repayments for the rest of the year. Among the measures being taken to cope were families freeing up cash by deferring loan or credit card repayments, accessing cash by withdrawing from their super, term deposits or life savings. Comparethemarket.com.au spokeswoman Abigail Koch said there were hundreds of thousands of Aussies “Hundreds of thousands of people are experiencing financial hardship at this time, with around six million workers expected to receive JobKeeper payments, while many others are uncertain about their financial security. “ “The Government and financial institutions have introduced a range of relief measures to help Aussies under financial pressure, stay afloat during these difficult times.” She said the firm had created a COVID-19 FAQ Hub to cope with demand for information on how the pandemic could affect home loans, credit cards, insurance and a range of other household costs. Source: x Coronavirus: Banks move to stem mortgage fallout -... A new survey has found almost half of Queenslanders have had their incomes cut or soon to be cut because of COVID-19, with concern for mortgages now. See the list of how banks are responding. www.realestate.com.au
0 Reply 110 Views 5Mo ago
Royal

Royal

Banks
While no reasonable landlord wants to evict a tenant, one industry professional has flagged that more needs to be done to protect the potential four-fifths of investors who won’t benefit from NSW land tax relief. Ramon Mitchell, the founder and managing director of Gault & Co Property Advisory, has weighed in on the NSW government plan to provide $440 million in rental relief for landlords and tenants across residential and commercial properties, alongside the provision of further clarification around rental agreements and the six-month eviction moratorium. “No reasonable landlord wants to evict a tenant,” he began. “They realise the current situation has brought rental stress to tenants through no fault of their own, and property owners aren’t keen to see any tenant without a home. Secondly, securing a tenant in the near-term market will be tough, and a vacant property will not help in covering loan repayments or other costs such as maintenance,” the managing director outlined. He noted that the new guidelines allow tenants who have suffered at least 25 per cent reduction in income – after factoring in all financial support – to approach their landlord and open discussions on rent payment reductions for a set period. “The tenant will still be liable for unpaid rent during the reduction period, but the liability will be deferred,” Mr Mitchell said. In essence, it means the tenant is not excused from their rent obligations under their lease agreement, with Mr Mitchell highlighting that this news will be of relief to landlords: “Unless both parties agree to waive the lost rent, the tenant will need to pay back the outstanding rent once coronavirus restrictions are lifted.” Details:x Banks still required at rent relief table There’s been a call for the banks to play a bigger role in NSW’s rental relief policy. www.smartpropertyinvestment.com.au
0 Reply 195 Views 6Mo ago
Justprop Team member

Justprop Team member

Banks
Fitch Ratings has announced that it has downgraded the issuer default ratings (IDR) of Australia’s major banks and their New Zealand subsidiaries – ANZ/ANZ New Zealand, the Commonwealth Bank of Australia (CBA)/ASB Bank, NAB/Bank of New Zealand, and Westpac/Westpac New Zealand – from “AA+/F1+” to “A+/F1”. The ratings agency also joined Moody’s Investors Service in revising its outlook on the operating environment for banks in both Australia and New Zealand from “stable” to “negative”. Fitch claimed that the decision reflects expectations of a “significant economic shock” in the first half of 2020 (1H20) due to social distancing directives from government authorities designed to curb the spread of COVID-19. The agency claimed that as a result of such measures, it expects both Australia and New Zealand’s GDP to “shrink” in 1H20, with only a “modest recovery” in 2H20 and into 2021. Fitch added that unemployment is “likely to spike sharply and remain very elevated” relative to pre-coronavirus levels and has therefore forecast a deterioration in asset quality and a decline in earnings, which it said would be “alleviated” by government, regulatory and banking relief assistance provided over the past few weeks. S&P Global Ratings has also downgraded its outlook for Australia’s big four banks and Macquarie Bank from “stable” to “negative”, in line with its downgrade of the Commonwealth of Australia’s long-term issuer credit rating. The big four banks have acknowledged the downgrades but stressed that they remain well capitalised to manage the ongoing crisis. These downgrades follow the release of a new stress test analysis from S&P regarding its operational expectations for the banking sector over the coming months. According to S&P’s “Scenario and Sensitivity” analysis, credit losses across Australia’s banks are set to “more than triple” in the 2020 calendar year as a result of the ongoing crisis. S&P’s base case is for credit losses across Australia’s banks to rise from 0.14 per cent in 2019 to 0.5 per cent in 2020. The ratings agency said economic consequences form the coronavirus outbreak would be compounded by “second-order” effects from natural disasters in late 2019 and early 2020. S&P’s base case also predicts an 8-10 bps decline in the banks’ net interest margins, a 3 per cent decrease to net interest income, a 10 per cent decrease in other operating income and a 2 per cent rise in operating expenses. The ratings agency said it expects the banks to withstand cost pressures associated with the spike in credit losses but acknowledged that a “longer-lasting and more severe COVID-19 crisis” could result in “significant problems for the Australian banking system”. Read details:x Big banks downgraded by ratings agencies Expectations of a “significant economic shock” in the first half of 2020 have prompted both Fitch Ratings and S&P to downgrade Australia’s largest banks. www.smartpropertyinvestment.com.au
0 Reply 172 Views 6Mo ago
Justprop Team member

Justprop Team member

Banks
Business closures and job losses have had a flow-on effect for many Australians who are now struggling to manage their home loan repayments. This has prompted the major banks to throw a lifeline to mortgage holders. ANZ, Commbank, NAB and Westpac are freezing home loan repayments for eligible customers for up to six months, although, in most cases, interest will continue to accrue. It’s important to check the conditions with the individual bank. Here’s a breakdown of what the Big Four are currently offering existing mortgage holders in response to the coronavirus pandemic. 1. ANZ Under a home loan repayment deferral, ANZ customers won’t be required to make repayments to their home loan for a period of time. Unpaid interest during the period is capitalised, meaning it’s added to the customer’s outstanding loan balance to be paid over the remaining loan term. 2. Commonwealth Bank CommBank today announce further changes to support home loan customers impacted by coronavirus. Mortgage holders who’ve been granted a six-month home loan holiday will also receive a one-time payment “to offset interest on interest costs during the six-month deferral period.” The payment amount is dependant on the loan balance. Here are the other relief measures for Commonwealth’s home loan customers: Options to access redraw facilities for eligible loans, reduce repayments or transition to interest-only payments during the period Reduced rate of 2.29% pa (3.99% p.a. comparison rate) for new one, two and three-year fixed-rate home loans for owner-occupiers paying principal and interest, effective 30 March From 1 May, eligible customers paying by direct debit will automatically have their investment/home loan repayments reduced to the minimum. Those wanting to continue higher repayments should contact the bank. 3. NAB As well as a six-month mortgage deferral for struggling owner-occupiers or investors, NAB’s support for home owners during COVID-19 includes: Access to redraw facilities for customers ahead of their home loan repayments, or with savings in an offset account. Eligibility and balances can be checked through NAB online or app banking Reducing repayment amounts during the period Request for financial hardship assistance on personal loan repayments. 4. Westpac Under Westpac’s COVID-19 Customer Support Package, home loan customers will be able to apply for a repayment deferral for an initial three-month period, and a possible three-month extension after review. The bank has also announced a $10 billion home lending commitment, to support more Australians into their next home. Westpac is also offering new-low fixed home loan rates for one, two or three years for owner-occupier customers paying principal and interest. Read more: x How the Big Four Banks are Helping Mortgage Holder... As the COVID-19 crisis continues to affect hip pockets across the country, the big four banks are coming to the table with relief measures for mortgage holders. www.realestate.com.au
0 Reply 204 Views 6Mo ago
InvestAus

InvestAus

Banks
The Australian Banking Association has followed the Reserve Bank’s lead in announcing a major relief package for Australian businesses, struggling amid the coronavirus crisis. Australian banks will defer the loan repayments of small businesses for six months, to help keep their doors open and keep people in jobs.  The package will apply to more than $100 billion of existing small business loans, and could put up to $8bn back into the pockets of small businesses. When asked about whether residential mortgage holders can expect to be thrown the same lifeline, ABA CEO Anna Bligh says today’s package is designed to impact the most critical and urgent need. “At this stage, banks report that they are not seeing any high volume of anyone in distress with mortgages.” But she notes, things could change in the coming days and weeks amid the rapidly moving set of circumstances. “As the government is having to evolve their response, if there is a need that emerges in relation to mortgages the banks will of course look at what might need to be done,” says Bligh. The focus is on small and medium businesses for now The RBA yesterday announced a suite of stimulus measures – including a crisis-cut to the cash rate – primarily focusing on businesses and jobs. The actions we have seen from the RBA and the ABA clearly show the immediate focus is on trying to keep businesses running and people in jobs, according to realestate.com.au executive manager of economics, Cameron Kusher. He adds, we know the UK, Italy and Canada have all provided targeted relief to households by pausing mortgage repayments. “It is probably an option on the table here in Australia. It would be particularly comforting for those that have already been either stood down or let go from their jobs as well as for those working on contracts or casually.” What about renters? Kusher says renters also need to be considered during the COVID-19 distress. “A better approach might be that there is a pause on mortgage repayments for a period of time, as well as the government covering the cost of rental repayments for that same period,” he says. ABA package will ultimately help keep homeowners afloat As long as homeowners can keep drawing an income, they will be able to keep making their mortgage repayments. Chief economist at realestate.com.au, Nerida Conisbee, says the ABA’s announcement is “great news” with the uncertainty around employment. “Given that it is going to be a temporary situation, we need to ensure people can pay living expenses, and this will be a great help to many people.” Some sectors have already been crippled by the coronavirus pandemic. Yesterday, two-thirds of Qantas and Jetstar’s 30,000 employees were temporarily stood down. Details inside:x Banks Yet To Rule Out Assistance For Mortgage Hold... The Australian Banking Association has today followed the Reserve Bank's lead in announcing a major relief package for Australian businesses, struggling amid the coronavirus crisis.  www.realestate.com.au
0 Reply 160 Views 7Mo ago
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