Results Home Loans
August 2023 Update
What’s been going on this month?
Stay current with Results Home Loans and any updates in the market
Rate Movements
As of August 2023, RBA keeps rate steady yet again
As of 07 June 2023, RBA lifts rates by +0.25 bringing Cash Rate to 4.10%.
RBA Cash Rate in August 2013 was 2.50%.
Westpac
Peak of 4.10% by June 2023, then dropping to 2.60% by end of 2025
NAB
Peak of 4.35% by November 2023, then dropping to 3.10% by early 2025
CBA
Peak of 4.10% by June 2023, then dropping to 3.10% by end of 2024
ANZ
Peak of 4.10% by June 2023, then dropping to 3.85% by December 2024
CURRENT INTEREST RATES FOR HOME OWNERS
Based on a $500,000 loan over a 30 year term at 80% LVR with Principal and Interest repayments.
CURRENT INTEREST RATES FOR INVESTORS
Based on a $500,000 loan over a 30 year term at 80% LVR with Interest Only repayments.
Lender Turnaround Times
As at 09/08/2023
Case Study
Understanding the Impact of Low Credit Scores on Loan Applications
Throughout the past month, while reviewing credit reports of our valued clients, we’ve encountered a notable trend: low credit scores. We’d like to shed light on the factors contributing to these scores and the consequential effects they bear when applying for loans.
The Unfortunate Ramifications
Our interactions with lenders has confirmed a credit score teetering on the lower end of the spectrum can trigger an automatic decline of loan applications upon submission. This initial rejection effectively halts any further progress with the lender. It is prudent, however, to note that amid this discouraging landscape, there exists a glimmer of hope. Some lenders exhibit leniency towards applicants with low credit scores, and intriguingly, a subset of lenders excludes credit scores entirely from their assessment criteria.
Identifying the Culprits
A prevailing cause behind a low credit score is often linked to the unfortunate history of missed loan repayments. These include various liabilities, ranging from car loans and credit cards to home loans. Although we acknowledge that these past repayments have been rectified promptly, it is essential to know missed payments continue to cast shadows over credit reports. Declines of loan application lodges also leave a trace within credit history. When these applications face rejection, a ripple effect ensues, leaving a visible imprint on credit reports.
Guiding Our Clients Towards a Brighter Future
Ultimately, our primary commitment is to the best interests of our clients. To avoid auto declines in the future, it is very important that our clients reach out to their brokers first and can demonstrate a track record of good financial history. We recommend striving for a period of six to twelve months characterized by impeccable repayment history as this will demonstrate a promising financial reputation and position our clients favorably from a lenders perspective.
Market Article
Mammoth’ mortgage hikes hit as fixed rates expire
- The Adviser
Borrowers yet to have their fixed-rate terms roll off are facing a minimum increase of $1,000 to monthly repayments, according to Lendi Group.
According to Lendi Group, borrowers on an average mortgage that are rolling off fixed rates are set to see their monthly repayments increase by a minimum of $1,000 every month, compared to before the Reserve Bank of Australia’s tightening cycle.
Borrowers in NSW are currently being hit with the highest monthly increases at $1,708, followed by Victoria ($1,421), ACT ($1,395) and Queensland ($1,237).
On a national basis, the average monthly repayment now sits at $3,865 according to the group, which is up $1,387 when compared to repayments on a 2 per cent interest rate, which now averages 6.27 per cent.
However, the group revealed that around one in five (21 per cent) of mortgagors are yet to roll off their low fixed rate terms.
State by state, NSW had the highest percentage of borrowers still on these fixed-rate terms at 22.7 per cent, followed by Queensland at 22 per cent, ACT at 21.35 per cent, Northern Territory at 20.5 per cent, and Tasmania at 17 per cent.
“The Reserve Bank’s decision to hold interest rates for a second month is welcome news, however our data reveals, despite the hold, the vast majority of Australians are already living with enormous increases in their monthly repayments,” Mr Hyman stated.
“With interest rates unlikely to materially decrease soon, we know the clock is ticking for two in 10 home owners who are yet to bear the full brunt of the rate hikes.
Mr Hyman added that research conducted by Aussie Home Loans, which surveyed 1,000 mortgagors between 25 and 55 in mid-June of this year, found that 29 per cent of home owners are struggling to meet repayments and 23 per cent are using more than 50 per cent of their total household income to service their mortgages.
Fixed rates surge in June
As fixed-rate loans from the pandemic era began to roll off in June 2023, recent data from the Australian Bureau of Statistics (ABS) found that new fixed-rate loan commitments recorded a 70.8 per cent increase in the same month.
Despite this, ABS data indicated that fixed-rate loan commitments still remained below the $26 billion recorded in June 2021 when interest rates sat at emergency levels of 0.1 per cent.
The surge followed the RBA’s aggressive tightening cycle that saw the official cash rate rise by 400 bps, which likely led to borrowers locking into higher rates above 6 per cent as economic conditions remained uncertain.
However, the RBA has held the cash rate steady for two consecutive months, following August’s pause, suggesting that the peak in interest rates could be on the horizon.
Thank You!
The value of a strong network and reliable partnerships cannot be overstated, and your referrals have not only brought us new business opportunities but have also reinforced the belief that we are on the right path to providing exceptional products and services to our customers.
So we wanted to take a moment to express our deepest appreciation for the outstanding support and collaboration we have received from you as our referral partner.
Your willingness to recommend our company to your own network speaks volumes about the trust you place in us, and we are honored to have earned such trust.
We truly appreciate the effort you put into every referral. Please know that we are always here to reciprocate your kindness and support. Should you ever require assistance or need a reliable partner for any venture, please don't hesitate to reach out to us.
