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Mortgage war erupts as CBA, NAB, Westpac slash interest rates; CBA cuts 70bp from its five-year fixed mortgage rate to 4.99%
Topic Started: 23 Jul 2014, 01:45 PM (10,153 Views)
stinkbug
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Ex BP Golly
13 Aug 2014, 10:23 AM
There you go folks, the banks only have a 33.333% chance of ripping you or as you all lemming rush to lock in your rates.

Dont think for a moment you have 66.6% chance they won't :lol

Thanks Bob.
When you lock rates the bank also fixes their margin.

I'm watching with interest to see where rates go.
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While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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Ex BP Golly
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stinkbug
13 Aug 2014, 10:45 AM
When you lock rates the bank also fixes their margin.

I'm watching with interest to see where rates go.
I'm sure the lemmings will keep this in mind when they are watching interest rates plummet and they are fixed with no ability to even pay down the capital beyond strictly defined limits. :lol :lol :lol

WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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peter fraser
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stinkbug
13 Aug 2014, 10:45 AM
When you lock rates the bank also fixes their margin.

I'm watching with interest to see where rates go.
This will interest you.

https://twitter.com/bankofengland/status/499507139598376960/photo/1

Quote:
 
The Committee’s guidance remains unchanged: increases in Bank Rate, when they come are likely to be gradual & limited
Edited by peter fraser, 13 Aug 2014, 09:54 PM.
Any expressed market opinion is my own and is not to be taken as financial advice
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stinkbug
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Thanks! :D
---------------------------------------------------------------

While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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Lef-tee
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Quote:
 
I'm watching with interest to see where rates go.


Same :)

I'm saddened by the situation many of our young people are facing but I also have to remind myself that with a tiny mortgage and the lowest rates in half a century (and I think, the potential for them to go lower yet) I am doing ok.
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Admin
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Administrator

Quote:
 
Mortgage wars ease pressure on RBA

August 19, 2014 - 4:26PM
Mark Mulligan

Intensifying competition among banks to sell cheaper mortgages to homeowners and buyers has taken pressure off the Reserve Bank of Australia to cut interest rates further amid concerns of sluggish domestic and world growth.

In the minutes of its August 5 meeting - where board members voted to hold interest rates at 2.5 per cent - the RBA noted that lower policy rates had begun feeding through to borrowers.

Australian banks have this year stepped up their campaign to win new business, taking advantage of cheap wholesale funding from around the world and discounting variable-rate loans and cutting rates on fixed-term mortgages.

This battle for business has taken pressure off the RBA to cut its cash rate even further than its current record low of 2.5 per cent in the face of rising unemployment and tepid consumer sentiment.

"Average lending rates on housing and business loans in Australia continued to edge down over July, mainly owing to the ongoing replacement of more expensive fixed-rate and discount variable-rate loans from previous years," the RBA said in its minutes.

"Overall, cumulative movements in interest rates since the start of the year amounted to a noticeable easing in financial conditions.

"Financial markets continued to expect the bank to leave the cash rate target unchanged at the August meeting and over the year ahead," it said.

Economists seized on the comments as a bright spot in what was a relatively flat assessment of economic and financial conditions in Australia and around the world.

ANZ senior economist Felicity Emmett said the mortgage wars had effectively amounted to "a quasi-monetary policy easing".

This made current market bets of a 45 per cent chance that the RBA would by early next year have to cut the cash rate again look "stretched", she said.

On the downside, the RBA noted a decline in retail sales volumes in the June quarter, a fall in consumer sentiment, a drop in residential dwelling approvals and that "measures of business conditions had remained at around average levels".

Some of these indicators have since improved. However, the minutes were tabled before the Australian Bureau of Statistics revealed a surprise jump, to 6.4 per cent, in unemployment in July.

Read more: http://www.smh.com.au/business/mortgage-wars-ease-pressure-on-rba-20140819-105tf0.html
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RAGE!
Unregistered

I am fucking sick to the back teeth of repeatedly seeing media articles describing a fucking mortgage price war by selectively quoting from vested interest rate aggregation sites and extrapolating that to the whole bloody system. There is a much easier and more accurate way to track real lending rates FFS!

The RBA provides a monthly updated data series called “Indicator Lending Rates” that averages the interest rates available across the major lenders in all major categories, affording a better guide to what the overall interest rate is for the system, which is what matters for any given market.

Since the August 2013 rate cut, the only variable interest rate average to fall was non-banks several months ago, by 25bps. In fixed-term mortgages, there was a move up and then down as markets misread the prospect of rate rises and perhaps in response to non-bank cuts as well. That’s not to say that there aren’t other incentives being deployed that get around actual cuts – such as cash backs, lowered lending standards etc – but there is no “price war” or “out of system” rate cuts.

The picture is more encouraging in business lending. Since the last rate cut, there has been 15bps points of cuts to small business lending rates and double that for large business lending rates, suggesting either more competition at large or a drive by the banks to boost a flagging market. Fuck.
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Sydneyite
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RAGE!
5 Nov 2014, 03:51 PM
Since the August 2013 rate cut, the only variable interest rate average to fall was non-banks several months ago, by 25bps. In fixed-term mortgages, there was a move up and then down as markets misread the prospect of rate rises and perhaps in response to non-bank cuts as well. That’s not to say that there aren’t other incentives being deployed that get around actual cuts – such as cash backs, lowered lending standards etc – but there is no “price war” or “out of system” rate cuts.
I think you will find that RBA series does not count/track the widely available variable rate discounts that all the big banks offer - this is where you find the competition and the price "war". Discounts at the moment are lower than they have been for ages - 1% or more off any banks SVR is readily available to anyone with a good credit rating/history and who shops around.

Also, a lot of the completition is of course in the fixed rate space, which is also not tracked by the RBA index to which you refer.
Edited by Sydneyite, 5 Nov 2014, 04:44 PM.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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Shadow
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Evil Mouzealot Specufestor

Sydneyite
5 Nov 2014, 03:57 PM
Discounts at the moment are lower than they have been for ages - 1%or more off any banks SVR is readily available to anyone with a goor credit rating/history and who shops around.
Yep, I recently went up from a 1.1% to a 1.2% discount on the Westpac SVR, and I reckon I may be able to push it up to 1.3% next year.
1. Epic Fail! Steve Keen's Bad Calls and Predictions.
2. Residential property loans regulated by NCCP Act. Banks can't margin call unless borrower defaults.
3. Housing is second highest taxed sector of Australian Economy. Renters subsidised by highly taxed homeowners.
4. Ongoing improvement in housing affordability. Australian household formation faster than population growth since 1960s.
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stinkbug
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I've been fixed below 5% for over 18 months now. There are discounts to be had - if you have something to bring to the negotiating table.
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While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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