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Nov182013

01:42:24 pm

Fixed Rate Home Loans At Six Year High: Australian Bureau Of Statistics








Lenders tighten screws despite record home loan values






Many experts believe there may be one more rate cut by the Reserve Bank of Australia before the year's end but many choosing to fix amid fees they will miss out on low-rate deals. Resi Mortgage Corporation 's chief executive officer Angelo Malizis said home loan customers looking to jump onboard the low fixed rates should take note of the additional fees and charges of choosing a fixed loan. "When comparing don't just compare on interest rate, compare on the fees and charges associated with the various loans, that's the best way to make a true comparison with the loans,'' he said. "They should be aware of the comparison rate and they should understand what additional fees there should be for undertaking or taking out that loan with that particular party.'' The advertised rate and the comparison rate differ on loans - the comparison rate helps the consumer understand the true cost of a loan because it includes extra fees and charges. Despite the banning of mortgage exit fees on variable rate loans in July 2011 borrowers still get stung with large fees on fixed rate home loans if they choose to exit early. Most fixed rate loans often come with a "break fee" to exit the loan before the end of the fixed term and they often restrict customers to making any extra loan repayments.
For the original version including any supplementary images or video, visit http://www.news.com.au/realestate/fixed-rate-home-loans-at-six-year-high-australian-bureau-of-statistics/story-fncq3era-1226719562314








Fixed rate home loans at six-year high ... Experts warn to be aware of additional fees and charges. (AP Photo/Nick Ut)

The company settled more than $3.4b in home loans in the period from July to October 2013; up from $2.9b for the same period in 2012 and $2.8b in 2011. Australian Bureau of Statistics September lending finance figures, released this week, also showed the same broad trend. The total number of loans granted to owner occupiers in September (51,928) was the largest number since October 2009 and was 4.4 per cent more than the previous month. The value of these loans ($15.8b) was 5.3 per cent higher than the previous month and 13.5 per cent higher than the same period the year before. Mortgage Choice spokeswoman Jessica Darnbrough said the recent lift in volumes was unsurprising given the current low interest rate environment. "Whenever rates are cut, activity in the mortgage market tends to pick up and this has certainly been the case over the past two years," Ms Darnbrough said. "Enhanced lender competition is also having a similar impact." But despite the national rise in home loans volumes and values, leading WA developer Nigel Satterley, chief executive of the Satterley Property Group, said buyers at the coalface had recently reported it was becoming more difficult to get finance. "We see 300 to 400 homebuyers every week when they visit our sales offices, and they give us a pretty good idea what's going on at a consumer level," Mr Satterley said. "In the last two weeks, for the first time since the GFC, buyers are telling us that it is becoming harder to secure home finance. "There is http://storify.com/Notheires/solid-advice-about-loaning-through-payday-loans#publicize still plenty of money available to borrowers, but banks are looking to the future and want buyers to reassure them about long term employment and the value of the property." Ms Darnbrough said it was not surprising to hear some potential buyers were having difficulty obtaining finance as property price growth in Perth had slowed over the past few months.
For the original version including any supplementary images or video, visit http://www.news.com.au/realestate/news/lenders-tighten-screws-despite-record-home-loan-values/story-fndbaln9-1226760129205




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