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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Consumers should take advantage of interest rates having fallen to their lowest levels in six and a half years to pay down all their debts, one lender says.

The Reserve Bank of Australia (RBA) on Tuesday cut the cash rate by 100 basis points to 4.25 per cent, its lowest level in six and a half years.

It is the fourth month in a row that the RBA has cut interest rates in a bid to head off the effect of slower world economic growth on an already soft Australian economy.
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Borrowers facing job loss can relieve themselves of significant stress if they keep their lenders abreast their financial situation, a leading non-bank lender says.

Resi Mortgage Corporation head of consumer advocacy Lisa Montgomery said borrowers who worried that they could forfeit on their loan had the option to postpone payments, revert to paying interest only for a period, or refinance the loan to an alternative product.
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Will the Treasurer Wayne Swan’s plan to invest $4 billion into the home mortgage lending market to buy residential mortgage backed securities boost competition and mark the end of sleepless nights within the non-bank sector?

RESI’s Head of Marketing and Consumer Advocacy, Lisa Montgomery is today breathing a sigh of relief but remains wary cautioning, “the devil is in the yet to be disclosed detail”, while Mortgage House managing director, Ken Sayer admits to being rather jaundiced and not wanting to get too excited until the fine print has been released.
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Borrowers have to curb their urge to splurge in the festive season and not start 2009 with a financial hangover, a leading mortgage company says.

Resi Mortgage Corporation head of consumer advocacy Lisa Montgomery said borrowers should tighten their spending and not depend on any future rate cuts to ease them through the Christmas period.

“The last round of interest rate cuts passed on by most lenders have been quickly absorbed by many credit-stressed borrowers,” Ms Montgomery said.
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Mortgage specialist Resi Mortgage Corporation has welcomed today’s interest rate cut by the central bank, saying it signals the beginning of a downward trend in rates.

But Resi head of consumer advocacy Lisa Montgomery said there was still a long road ahead for many borrowers and they should be urged to look at any interest saved and re-direct it to pay down credit cards or loans.
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Prime non-bank lender Resi Mortgage Corporation has lobbied the Federal Government for a dedicated consumer education program to be an essential part of the mortgage industry’s new regulatory model.
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