Potential first homebuyers are giving up their search each time lenders hike interest rates on home loans.

Within three days of the Reserve Bank of Australia lifting the official cash rate by 25 basis points to 4.0 per cent last week, 26 lenders had passed on interest rate rises on 175 home loan products, according to financial comparison website RateCity.

That prompted two per cent of potential first home buyers to halt their search, according to Australia’s biggest mortgage broker, Mortgage Choice.

Another three per cent would withdraw from the market if interest rates climbed another 75 basis points, Mortgage Choice said.
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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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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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Demand for fixed rate mortgages dropped to a record low in December, a survey reveals.

Just over one per cent of Mortgage Choice’s new home loan approvals were for fixed loans in December, a company survey released on Wednesday shows.

It is the lowest since the mortgage broker began recording such data in January 2003.

Mortgage Choice senior corporate affairs manager Kristy Sheppard said Australians taking out home loans were looking at the cost of fixing their interest rate and deciding that at the moment it’s not worth the extra expense.

“When you look at the comparative cost between fixed and floating rates, its not at all surprising that almost 99 per cent of our new residential borrowers are choosing variable home loans,” Ms Sheppard said.
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Mortgage Choice is proud to announce the winners of its 2009 awards for excellence, a top-performing group of franchisees and one loan writer who will be sent to Las Vegas on a well-deserved break.

The Business Excellence Award (BEA) recipients and High Flyers (most impressive franchisees in terms of value and number of loans) received high praise for their successes over last year at the company’s 2010 National Conference, held in Melbourne’s Crown Complex from 14 to 16 January.

Attending his first Mortgage Choice national conference since taking the helm in May 2009, Mortgage Choice CEO Michael Russell said, “Our annual conference is the pinnacle event of our professional development calendar, not only for the franchise network and our staff but also for our lender sponsors and key suppliers. Hence, it offers the perfect opportunity to acknowledge the exceptional business performance and achievements of our nationwide network.”
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Westpac Banking Corporation has tightened its mortgage loan criteria and realigned its funding towards high-quality mortgage intermediaries, as subsidiary RAMS Home Loans prepares to quit the mortgage broker channel.

Westpac spokeswoman Jane Counsel confirmed the bank lowered its loan-to-valuation ratios (LVR) for new full-documentation mortgage customers on Wednesday from 92 per cent to 87 per cent including two per cent for lenders’ mortgage insurance.

The LVR for new low-documentation customers has been lowered by Westpac to 80 per cent including LMI, said Mortgage Choice spokeswoman Kristy Sheppard.

Mortgage Choice is the nation’s largest mortgage broker.

Westpac will also quit funding RAMS’ broker channel, which is scheduled to close on February 26 and was responsible for just under a third of Westpac’s broker-originated new mortgage growth in 2009.
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Mortgage Choice, Australia’s largest independently-owned mortgage broker, this month celebrates a number of key milestones that position it ahead of its competitors in the online space.

The national company may have been operating for 17+ years but is forward-thinking when making the most of optimising its presence on the internet, placing a significant focus on online marketing initiatives. This includes a 17% annual budget increase for search engine optimisation activities.

Mortgage Choice CEO Michael Russell said, “The results speak for themselves. In December 2009, the leads we acquired from online traffic generated almost three quarters - 74% - of our overall volume.”

“We’re just as proud of the fact that January marks the seventh consecutive month Mortgage Choice has ranked number one on Google’s organic search listings for the phrase ‘home loan’, which provides us with a considerable competitive advantage.
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Consider the who, what, when, where and why of property ownership

Mortgage Choice, Australia’s largest independently-owned mortgage broker, is encouraging potential investors and ‘next’ homebuyers to fine tune their financial strategy now for 2010.

With less competition expected in the lower end of the market thanks to the expiration of the First Home Owner Boost, the New Year could be a prosperous one for buyers keen to further their foothold in the Australian property market. Those who have done their research, know their borrowing limit and have a good idea of the mortgage options available will be well ahead of their purchasing rivals.

Mortgage Choice senior corporate affairs manager, Kristy Sheppard said, “What should be a welcome relief for investors and next homebuyers is the almost-certain decline in first-time owner occupiers following the expiry of the First Home Owner Boost on 31 December 2009. Next year could mean a great new property investment for those who put their mind and money to it.”
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Australia’s largest independently-owned mortgage broker, Mortgage Choice is pleased to announce as part of its ongoing diversification strategy the inclusion of ANZ’s Personal Loan products into its service offering.

This latest addition will deliver Mortgage Choice customers fast and convenient personal finance solutions with flexible repayment options and competitive interest rates.

Mortgage Choice CEO, Michael Russell said, “On the back our FY10 strategy of ‘DREAM’, including more quality personal loan solutions into our offering adds value to the Mortgage Choice customer proposition. It also provides our brokers with further means to increase their earnings and that of the company in general.”

“Our diversification plan is moving from strength to strength and we welcome the addition of ANZ’s Personal Loan options into our product offering.
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Australia’s largest independently-owned mortgage broker, Mortgage Choice is pleased to announce it has entered into an agreement to make its first purchase after recently declaring acquisitions a key strategy for future market share growth.

The deal with mortgage aggregator Loankit heralds Mortgage Choice’s first step into aggregation via its fully owned subsidiary, Beagle Finance Pty Ltd.

The publicly listed broker is buying selective Loankit assets including its information technology platforms, loan book and contracts with 50 mortgage brokers. Loankit is well respected within the industry for its superior business systems, and was rated No. 1 Aggregator in Mortgage Professional Australia magazine’s ‘2009 Annual Brokers on Aggregators Survey’.
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Borrowers should reassess their budgets and consider their loan options with rising interest rates set to continue, mortgage brokers say.

The Reserve Bank of Australia on Tuesday raised the cash rate by 25 basis points to 3.50 per cent, from 3.25 per cent, following its monthly board meeting.

The move followed a similar rise in October.

Mortgage Choice corporate affairs manager Kristy Sheppard said the rise would affect the majority of mortgage holders, with its data showing 95 per cent of all new loans carry variable rates.

The last two rate rises would add almost $100 to each monthly payment for the average borrower, Ms Sheppard said.
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Potential first homebuyers who want to take up the First Home Owner Boost offer and have their home loan approved before signing a property purchase contract should be very aware that they may have only four weeks to get property finance plans underway.

Why? Lender’s loan processing issues have been exacerbated in recent months, pushing approval turnaround times to anywhere from one day to up to six weeks.

Mortgage Choice senior corporate affairs manager, Kristy Sheppard said, “While processing times will vary between lenders, the next four weeks are crucial for buyers who wish to have their home loan approved before signing a property purchase contract and applying for the grant boost.”

“Savvy borrowers wanting such peace of mind and confidence should do their best to have applied for finance by mid November, at least six weeks prior to the First Home Owner Grant boost deadline, to allow adequate time for loan processing and grant application.
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Property ownership, whether for home or investment, is an aspiration for many Australians yet the prospect of saving what can be an entire annual wage for a deposit puts the dream further into the future.

Goal setting, clever planning and a commitment to following through are often the keys to solving this savings problem.

According to Mortgage Choice, Australia’s largest independently-owned mortgage broker, creating a savings plan need not result in the stripping away all the good bits life has to offer, but it will prioritise them.

Mortgage Choice senior corporate affairs manager, Kristy Sheppard said, “It’s best to know what you’re in for from the very start. Begin your deposit savings process by speaking to an accountant plus a professional and accessible mortgage broker who has access to a wide range of lenders. This will give you a good idea of how much you can and need to save for your deposit in order to buy within a particular price range.”
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One in six Gen Y feel pressured to buy an investment property

Good news for the housing market: a survey by Australia’s largest independently-owned mortgage broker, Mortgage Choice, found over one third of Generation Ys planning to buy an investment property by June 2011 also aimed to purchase a home during that time. Almost one quarter wanted to create an investment property portfolio of ‘as many properties as possible’.

In further support of the housing market recovery continuing well into the future, the 2009 Property Investors Survey found 71% of the 281 Gen Y respondents were delaying their purchase until the First Home Owner Boost finishes on 31 December 2009.

Mortgage Choice senior corporate affairs manager, Kristy Sheppard said the survey provides evidence that activity from younger buyers will not phase out at the end of year as some commentators are predicting.
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Standard variable overtakes basic variable as most popular product type

The popularity of fixed rate loans in Australia has dropped slightly to just under 7% as lenders continue to raise interest rates for this loan type. According to August 2009 data from Mortgage Choice, Australia’s largest independently-owned mortgager broker, demand for fixed products has stood at less than 10% of all its loan approvals for 14 months now.

Demand for variable loans also remained relatively steady, for the third consecutive month, at 86% - only two percentage points below the 12-month average. However, standard variable loans (where eligible customers with a loan of over $150,000 can receive discounts on the interest rate plus other professional package features) have become more popular than their ‘plainer’ counterpart.
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