What homebuyers should look for when comparing home loans

What homebuyers should look for when comparing home loans as interest rates remain low

It’s a great time to buy property with record-low interest rates, but homebuyers are cautioned to avoid these mistakes when shopping for loans.

Kathy Skantzos

With unprecedented cuts to Aussie home loans and ultra-low interest rates, now could be the ideal time to buy, but buyers have been warned to shop around before committing to a mortgage.

Canstar’s group executive of financial services Steve Mickenbecker told news.com.au that homebuyers should not be getting a loan for anything around the 3 per cent mark or above. He said home loan rates are down at around 2 per cent – an ultimate low we haven’t seen before – and buyers shouldn’t be going any higher. “We’ve not seen a minimum anywhere around that. In 2015, the average interest rate was around 5 per cent and in 2020 the national average was 3.32 per cent. That’s…
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Simpler lending rules for home loans

Simpler lending rules for home loans and credit to free up the economy Customers will be promised faster access to loans under simpler rules that aim to free up credit and lift the economy by ending confusion over lending obligations for banks and finance companies. Treasurer Josh Frydenberg will overhaul the laws governing mortgages, personal loans, credit cards and payday lending to streamline decisions on whether customers can afford the loans they seek. Treasurer Josh Frydenberg will overhaul bank lending rules to make it simpler to decide mortgages and credit card lending.CREDIT:ALEX ELLINGHAUSEN The changes respond to growing concerns over court disputes and the duplication of regulators in home and personal lending, sparking fears that restrictive rules on credit would curb economic growth. With the government preparing to unveil tax cuts and spending measures in the October 6 budget, the lending reforms are intended to improve access to credit fro…
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Many Aussies are making a big mistake with home loans

Many Aussies are making a big mistake with home loans: here’s how

How mortgage hunters could be dudding themselves out of the best deal, all because of an unfounded fear.

Rebecca Le May

Many mortgage hunters have an unfounded fear of non-bank lenders and could be dudding themselves out of the best deal.

After the Reserve Bank of Australia slashed the cash rate to record lows earlier this month, it was the smaller, little-known outfits Athena, Reduce Home Loans, Homestar Finance, Homeloans.com.au and Pacific Mortgage Group that led the charge in passing on interest rate cuts to customers. RateCity research director Sally Tindall said non-bank lenders had helped drive prices down across the entire home loan market, particularly in recent months as record numbers of mortgage holders moved to refinance, especially when it came to fixed rates. “Right now, the lowest fixed rate loan on the market is just 1.…
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Beforepay, Afterpay and everything in between

Beforepay, Afterpay and everything in between: Do Australia’s BNPL players have consumers’ best interests at heart? STEPHANIE PALMER-DERRIEN Among other things, 2020 has been the year of e-commerce, and, by extension, it’s become the year of buy-now-pay-later too. Aussie market leader Afterpay has seen its share price top $100, up from $8.90 in mid-March. Competitor Zip Pay has also been going gangbusters on the ASX, and newer players like Payright and Limepay are reaping the benefits of a mass shift online. Such products essentially extend short-term credit to consumers, allowing them to take on a small debt and spread their payments into more manageable chunks. We’re also seeing other alternative credit solutions appearing. Last week, fintech BeforePay raised $4 million for its product allowing users to borrow up to $200 from their pay cheque in advance. BeforePay charges a flat 5% fee, for short-term loans, often over just seven or 14 days. SmartCompany…
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How low rates killed the affordable housing dream

By business editor Ian Verrender The possibility of younger people breaking into the property market was short-lived during the coronavirus pandemic.(Reuters: David Gray) For a brief, flickering moment, the dream of a generation seemed within reach.

House prices were on the cusp of one of the biggest falls in decades, hit by what was shaping up to be a near-lethal combination of mass unemployment and zero immigration.

After decades of a seemingly unstoppable real estate bubble, the prospect of a sustained fall in housing prices brought a glimmer of hope to those under 35 that home ownership may become a possibility if they could hold on to a job.

Even relatively conservative analysts were forecasting house price declines of 20 per cent and back in May our biggest bank, the Commonwealth Bank of Australia, pencilled in the prospect of a 32 per cent collapse.

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Zero-interest loans coming for ACT electric car buyers

Zero-interest loans coming for ACT electric car buyers Peter Brewer  An ACT government vehicle charges at a new electric vehicle charging station at the West Belconnen Child and Family Centre in Holt. Picture: Sitthixay Ditthavong The ACT will be the only jurisdiction in Australia to offer zero-interest loans to help subsidise new and used electric vehicle purchases under the new governing agreement signed between Labor and the Greens. Electric vehicles will be cheaper to buy in Canberra than anywhere in Australia once the zero-interest deal kicks in as part of a key pre-election promise made by the Greens. The party had its political hand strengthened by claiming six seats across the territory in the recent ACT election and took an ambitious pledge on electric cars to the election, whereas the two major parties generally avoided the issue completely. The Greens' strong electoral perfo…
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Old home loans costing Aussies

Old home loans costing Aussies 'thousands' by not switching By Stuart Marsh • Senior Producer Australians with older home loans are missing out on thousands of dollars in savings, a new report has found. The Australian Competition and Consumer Commission (ACCC) today submitted its final report into the Home Loan price inquiry. It found that borrowers are potentially spending far more money than they need to by not seeking a lower rate from their existing lender or switching to a new lender. The Australian Competition and Consumer Commission (ACCC) today submitted its final report into the Home Loan price inquiry. (Supplied) "A significant number of Australian home loan borrowers have not switched lenders for several years, yet they stand to save so much money by doing so," ACCC Chair Rod Sims said. "There are factors standing in the way of home loan borrowers switching lenders, such as a lack of clear and transparent pricing, as well as inconvenience …
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Fixed rate home loans are at their lowest ever — but they come with a catch

Fixed rate home loans are at their lowest ever — but they come with a catch By David Taylor The banks want to lock you in as a customer now for as long as they can.(ABC News: Grant Wignall) Interest rates in Australia have plumbed new depths since the Reserve Bank's monetary policy announcement on Melbourne Cup Day,

It's taken several weeks, but following a number of extraordinary policy measures by the RBA (including a formal adoption of Quantitative Easing), at least one bank has taken the decision to offer a three-year fixed home loan rate of 1.89 per cent.

That's low. In fact, according to interest rate comparison site, Mozo, it's the lowest commercial fixed interest rate (with an 80 per cent Loan to Value Ratio or LVR) the country has ever seen.

Fixed rates are dropping to all-time lows because the banks are desperate for your money. So far the evidence shows they're…

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Newcastle Permanent to supply online lender Athena Home Loans with home loan funding

Newcastle Permanent to supply online lender and "mortgage disruptor" Athena Home Loans with an initial $300 million in home loan funding NEWCASTLE Permanent has joined forces with Athena Home Loans, with the Hunter-founded building society supplying the Sydney-based "mortgage disruptor" an initial $300 million in home loan funding. The Perm, in its 117th year of operations as one of Australia's largest mutual organisations with $11 billion in assets, and the comparatively new online lender Athena announced the strategic partnership in the national home loan market on Wednesday. Under the agreement, Newcastle Permanent will supply Athena with an initial $300 million in home loan funding with the potential for future transactions and a broader partnership. A statement from the Perm said it was able to seize the opportunity when it presented itself due to the organisation's "strong liquidity and capital reserves built over a numb…
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NAB to offer six-month deferred loans for businesses

NAB to offer six-month deferred loans for businesses impacted by coronavirus

NAB is introducing a business loan package, which will enable small businesses to access up to $1 million.

Gerard Cockburn

NAB will offer small businesses loans of up to $1 million with a six-month pause on repayments. Picture: NCA NewsWire/Bianca De MarchiSource:News Corp Australia

National Australia Bank will defer loan repayments by up to six months for businesses urgently needing to access funds to endure the economic storm sparked by the coronavirus pandemic.

The major bank will implement a new loan scheme, which will allow small businesses to access up to $1 million, with no repayments required for the first six months of accessing the debt facility. NAB’s new Business Support Loan follows a revision of the SME guarantee scheme, which is providing businesses with debt that is partly backed b…
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