Many would-be home buyers have given up the dream of home ownership, hit by a triple whammy of rising interest rates, tougher lending conditions and an end to the federal government’s more generous grant.

A survey by mortgage broker Loan Market found 28 per cent of respondents said they had put off their home buying plans indefinitely, while 32 per cent said they were trying to save for a larger deposit.

The online survey of 260 potential first time home buyers found 33 per cent of respondents were still looking to buy a property this year.
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Housing commentators have warned that more rate rises are to come after the central bank increased the cash rate on Tuesday .

And if banks pass on the full rise, homeowners can expect to pay an extra $47 each month on an average $300,000 mortgage, they say.

The Reserve Bank of Australia (RBA) raised the cash rate by an expected quarter of a percentage point to 4.00 per cent, the highest since February 2009.

Mortgage Choice senior corporate affairs manager Kristy Sheppard said more rate rises were likely this year.

“Look at this increase as a taste of things to come for 2010,” Ms Sheppard said in a statement.
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Australia’s largest independently-owned mortgage broker, Loan Market, is holding a workshop on how to start a career in the home financial services sector.

Loan Market head of new broker recruitment Chris Dobbie said the workshop at Chancellor on the Park in Brisbane on Saturday, March 20, would cover all aspects of a career in mortgage broking.

Mr Dobbie, a former national Mortgage Industry Association broker of the year, said mortgage broking appealed to people who preferred self-employment and the top performing brokers could earn in excess of $300,000 a year.

He said the half-day workshop was part of Loan Market’s rookie broker program and would cover a typical day in the life of a broker.
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Inquiries for 100 per cent home loans have surged 250 per cent since the federal government’s more generous first home owners grant ceased at the end of last year.

But mortgage broker Loan Market says these potential borrowers are likely be unsuccessful and will need to show they can save for a deposit.

Loan Market chief operating officer Dean Rushton says there is still a huge amount of demand from people wanting to enter the housing market despite the end of the government’s expanded grant.

But those looking for a 100 per cent loan will find it difficult.

“Tighter lending restrictions which require genuine savings contributions of around five per cent towards the property purchase means most are unlikely to get past first base,” Mr Rushton said.
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Most borrowers rarely have contact from their bank’s management on home and personal finance matters, a national survey has found.

The online poll by leading mortgage broker Loan Market Group found only 12 per cent of respondents said they had regular contact with a bank manager.

Fifty six per cent said they either didn’t know what a bank manager was or had no idea who to contact at their bank because “they change all the time”.

Almost one third of the 660 people surveyed - 32 per cent - said they only heard from a senior bank staff member “when there’s a problem”.

Loan Market Group Chief Operating Officer Dean Rushton said the survey results showed that borrowers receive less personal service from their lenders.
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Demand for home loans dived in January after three official interest rate increases and the removal of the federal government’s generous first homeowners’ grant, a mortgage broker says.

Loan Market Group says its home loan approvals have dropped by 40 per cent from a peak in 2009 after the company recorded its quietest month since 2006 in January.

“The three successive rate rises in the final three months of 2009 definitely had an impact on homebuyers and we didn’t see the need for the RBA to put rates up this month,” the group’s chief operating officer Dean Rushton said in statement.

“There is no doubt that the removal of government stimulus is having an impact on the market.”

The government’s increased first homebuyers’ grant ended on December 31, returning to $7,000.
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Mortgage broker Loan Market Group has welcomed the central bank’s decision to leave the official interest rate unchanged but says mortgage holders can still expect rises in the months ahead.

The Reserve Bank of Australia (RBA) left the cash rate unchanged at 3.75 per cent after its first board meeting of the year on Tuesday.

Most financial market economists had expected a rise of 25 basis points to four per cent.

Loan Market Group executive chairman Sam White said the decision would allow the RBA to examine the impact of the three rate rises made late last year.

“What they’re trying to do is assess the impact of the previous rises,” he said.

“Australians are also coming back from holidays.
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The average home loan in Australia increased eight per cent during 2009, according to a leading mortgage broker.

Loan Market Group’s National Manager for Operations and Risk, Ivan Karamatic, said an analysis of loans settled by the group had found the average loan size had risen from $281,818 in December, 2008, to $304,266 in December, 2009.

Mr Karamatic said the increase in the average level of housing debt was in line with the rise in property prices over the past 12 months.

“The median price for property in Australia rose by 11.3 per cent last year which confirms the underlying reason for the increase in the average loan size,” he said.

“As the year progressed there was also a boost in consumer confidence.

“A lot of experts were predicting a year ago that the property market would take a big hit during 2009 with house prices falling dramatically due to the global financial crisis.
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Home owners suffering from a festive season financial hangover can ease the pain by considering consolidation of their debts, says a leading mortgage broker.

Loan Market Group’s National Manager for Operations and Risk, Ivan Karamatic, said refinancing was a popular option for mortgage holders to offset increased credit card expenses and other debts.

“We often get an increase in people seeking to refinance at this time of year because they have had a more expensive Christmas and New Year than they anticipated,” Mr Karamatic said.

“Debt consolidation combines several loans into a single loan, assisting you to manage repayments, reduce interest rate costs and control your debt.

“Typically, debt consolidation combines unsecured debts such as personal and car loans, credit card balances and store card balances into your home loan, securing the debt with your property.”
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Small lenders are now offering variable rates at up to one per cent lower than major banks, allowing mortgage holders who make the switch to save hundreds of dollars each month,
Australia’s largest independent mortgage broker says.

Loan Market today said the margin between banks’ standard variable rates and other low variable rates had returned to 2007 levels.

Loan Market Group Chief Operating Officer Dean Rushton said it was now possible to get variable rates that were not introductory rates at up to one per cent below the major banks’ standard variable rates.

The one per cent variance translates to over $200 in monthly savings on a $350,000 loan at a 25 year term, he said, and homeowners seeking to ease repayment pain should consider their options.
“Consumers are now in a very good position to seek a lower rate on an existing home loan to make their repayments a little bit easier,” Mr Rushton said.
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Consumers can expect banks to continue breaking ranks from the interest rate decisions of the Reserve Bank of Australia (RBA), according to a leading mortgage broker.

The RBA this week boosted the official cash rate by 0.25 per cent to 3.75 per cent but Westpac, the Commonwealth Bank and ANZ all hoisted their standard variable rates higher than the central bank’s increase.

Loan Market Group Chief Operating Officer Dean Rushton said the unwelcome trend of banks breaking ranks from the RBA was likely to carry on during 2010.

“Major banks no longer seem to be moving in line with the RBA, which is a development of great concern to mortgage holders,” Mr Rushton said.

“Based on this development, it is imperative that the RBA now pause and assess the impact of its three consecutive rates rises.
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Loan Market Group, Australasia’s largest independent mortgage broker, has acquired PLAN New Zealand as part of its strategy to provide a broader financial services platform to mortgage brokers and their clients across the country.

PLAN New Zealand and Loan Market’s business will continue to operate as independent entities in the market place.

Loan Market Group Executive Chairman Sam White said the acquisition gives Loan Market the scale and reach to invest further into its New Zealand operations.

“I am delighted that we are able to bring together two of the most highly regarded mortgage broking groups in New Zealand under one company,” he said.

“This acquisition is good news for all brokers in both PLAN New Zealand and Loan Market, in that it gives certainty of ownership in the groups they belong to.
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Consumers show little loyalty to lenders when they consider a new home loan or attempt to refinance, according to leading mortgage broker Loan Market Group.

Loan Market Group Chief Operating Officer Dean Rushton said the global financial crisis had changed the lending landscape, particularly for people looking to enter the property market.

Mr Rushton said independent research conducted on behalf of Loan Market Group found first time buyers had virtually no loyalty towards lenders, particularly the major banks.

“They are looking for the best deal they can get so it doesn’t matter to them whether they have had a long standing relationship with a particular bank or any other lending institution through a savings account or other dealings,” he said.
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Leading mortgage broker Loan Market Group has urged first time property buyers to be well prepared when they try to obtain housing finance after finding one in three enquiries will not fit the current lending criteria.
Loan Market Group Chief Operating Officer Dean Rushton said tighter lending rules which requires genuine savings contributions of around 5.0 per cent towards the property purchase was creating major hurdles for new buyers.

He said other loan applicants who passed all the lending criteria were being rejected because they had few assets.

“The major lenders are in a competitive position where they can pick and chose who they want to lend money to and there is little room to move for applicants who do not fit the box,” Mr Rushton said.
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More than 75 per cent of homeowners took advantage of low interest rates to add to their mortgage loan or take on other forms of debt, a new survey has found.

The poll by mortgage broker, Loan Market Group, found that 44 per cent of homeowners increased their home loan while interest rates were at their lowest in nearly 50 years.

One in 10 added to their credit card debt, slightly fewer took on a personal loan, and the same number made a purchase on interest-free terms, while seven per cent borrowed from their relatives.

Just 23 per cent were prudent in not taking on any more credit.

The increased debt burdens were of concern now the Reserve Bank of Australia (RBA) was raising the cash rate, Loan Market Group chief operating officer Dean Rushton said.
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