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Future loan rate cuts may be on the cards
Topic Started: 26 Jul 2017, 12:17 PM (5,625 Views)
Rufus
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Future loan rate cuts may be on the cards

Current financial and economic trends point to a future ‘flurry’ of mortgage rate cuts by the banks, one leading financial analyst has said.

Going back six to nine months, there was a significant amount of discounting going which squeezed the margins of the banks in the last results season, Martin North, Principal at Digital Finance Analytics, told Australian Broker.

“That’s changed now if you look at the last six months or so. There have been a number of interest rate rises out of cycle. The banks have used the alibi of interest only or capital lifting which is all partly true. But actually what they’ve been able to do is build a bit of a war chest.”

This means that the banks, particularly the larger lenders, have the capacity to target specific subsets of new customers with significantly below market rates, he said.

“I’m expecting to see a number of different propositions out there. Some of them will be made public. I’ve also noticed that some of the first home buyers who have obtained loans recently have been able to negotiate significant discounts off the headline rate.”

Future discounts will be applied predominantly to owner occupied borrowers and principal and interest loans, North added. However, he also predicted that banks would not be repricing their books and that existing borrowers would still be stuck with higher costs.

“They’re all now positioning to effectively find the next new business,” he said. “My expectation is we’ll see quite a battle over the next few months for new business from new borrowers and also from selectively targeting refinance.”

Higher margins from investors and lower funding costs are other reasons why the banks have a bit more room to move, North added.

Future rate cuts could also drive higher levels of refinancing, he predicted.

Read more here - http://www.brokernews.com.au/news/breaking-news/future-loan-rate-cuts-may-be-on-the-cards-239136.aspx?utm_source=dlvr.it&utm_medium=twitter

Take risks - if you win you will become wealthy, if you lose you will become wise
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Ex BP Golly
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Higher margins from investors.

I was told that wouldn't happen lol.

The big squeeze is here....next trick = teaser rates to suck in the last of the greater fools.
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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DragonGM
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This assumes that at some point the banks will turn benevolent and share some of that profit margin with customers. Hahaha. Thanks for the laugh.
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Rat
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Filthy Rodent

DragonGM
26 Jul 2017, 07:30 PM
This assumes that at some point the banks will turn benevolent and share some of that profit margin with customers
Why would you assume that?

To me it suggests they'll want to grow their market share by increasing the volume of lending to certain types of borrower and enticing them with a more competitive rate.

Business as usual really.
Edited by Rat, 26 Jul 2017, 08:00 PM.
Consumer protection laws extended to small businesses. Banks not permitted to repossess due to non-monetary defaults (for example, a fall in the property value).
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DragonGM
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Rat
26 Jul 2017, 08:00 PM
Why would you assume that?

To me it suggests they'll want to grow their market share by increasing the volume of lending to certain types of borrower and enticing them with a more competitive rate.

Business as usual really.
I agree. The banks won't give away anything they do not have to.
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Trollie
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DragonGM
26 Jul 2017, 08:15 PM
I agree. The banks won't give away anything they do not have to.
Competition is robust in the homeloan market, I wouldn't expect much gouging.

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Simon_S
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Rufus
26 Jul 2017, 12:17 PM


Current financial and economic trends point to a future ‘flurry’ of mortgage rate cuts by the banks, one leading financial analyst has said.
Cuts........Because the Economy is struggling....... :lol

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herbie
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Simon_S
26 Jul 2017, 10:48 PM
Cuts........Because the Economy is struggling....... :lol
'N house prices is still goin' up.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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Simon_S
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herbie
26 Jul 2017, 10:51 PM
'N house prices is still goin' up.
Better buy some more then.... :lol
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herbie
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Simon_S
26 Jul 2017, 10:55 PM
Better buy some more then.... :lol
Tha youngs just did. 'N bein' a pretty conservative ole dude (wot's got plenty for meself regardless), I just backs them in their purchases wif me cash these days - LOL LOL LOL

But anyways, how many's you bought in tha last decade Simons? - Guffaw, Guffaw, Guffaw ... :)
Edited by herbie, 26 Jul 2017, 11:06 PM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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