The Reserve Bank of Australia (RBA) has once again made the decision to keep the nation’s official cash rate on hold at 1.50%.
However, as you may know the official cash rate does not give a clear indication of what is happening with Australian home loan rates as lenders move their rates on a regular basis, pushing up borrowing costs for homeowners and prospective home buyers across the country.
Whether lenders’ rates will lift further is dependent on a number of economic factors and at the moment, the Australian economy is looking good overall.
Indeed, GDP growth has been strong, the pace of increase in household indebtedness has slowed and the unemployment rate is at its lowest rate in over six years.
National Australia Bank’s Monthly Business Survey revealed that business conditions remained well above average and business confidence was around average levels in September. The latest Westpac Melbourne Institute Index of Consumer Sentiment revealed that consumer sentiment rose in September, however the recent leadership change in Canberra, increasing mortgage rates and declining house prices were weighing on confidence.
The most recent Labour Force Survey from the Australian Bureau of Statistics (ABS) revealed that employment growth is strong and the unemployment rate is currently sitting at 5.0%.
According to the most recent CoreLogic Hedonic Home Value Index, national dwelling values continue on to weaken, taking the annual decline to 3.5% in October.
In the minutes of its October monetary policy meeting, RBA board members reflected on the changes to lending standards and observed that standards could tighten further and competition for borrowers of high credit quality remained strong. You may have heard that securing a home loan has become more complex recently, the RBA is suggesting that this may continue.
In a property market where house prices are easing, home loan interest rates are rising, and home loan applications are being scrutinised more than ever before, it’s never been more important for first home buyers, and those looking to refinance their existing loan to ensure they look good on paper and seek guidance from a qualified mortgage professional.
At Mortgage Choice, our brokers know what lenders are looking for when they assess your home loan application. They also know which lenders are suited to your individual needs and financial goals and can help you get a competitive home loan deal.
A qualified mortgage broker is across the ever-evolving lending landscape. A broker will assess your financial situation in order to determine how you can be in the best financial shape before submitting your loan application, and if necessary, coach you through any changes you need to make in the short and medium term to ensure a seamless application process when you are ready to buy.