Good Morning and Welcome to Autumn,
Well quite a tense week out there especially in the stock market with fears of Corona Virus spreading nearly as fast as the virus itself.
One wonders what the flow on effects of this will be especially around our tourist dollar and mining exports.
With the RBA meeting again tomorrow, I guess it could be hope beyond hope that the government is able to put something together to push the economy forward, before the poor old RBA is forced to cut rates again.
With so much in finance news the last week over best interest duty (BID), ASICS guidance, and what will be a new level of scrutiny that many brokers may not be prepared for. It was interesting to note that CBA’s share of the mortgage market has also grown outside of the others in the big 4.
With BID coming on line it has left many in the world of finance wondering how ASIC, APRA and lenders are going to deal with the bane of any mortgage brokers life… clawbacks. Especially with all of the incentives for mortgage clients on refinance cash backs and how that relates to BID. They have all been very quiet on this front.
Perhaps they share more with Elmer Fudd than we know ‘Shhhhhhhhh be wery wery qwiet…we’re hunting wabbits….’
With over 700,000 clients about to come off interest only repayments in the next twelve months according to APRA, that could make 2020 the year of the refinance.
It also makes it especially important for borrowers because if those loans revert to P&I payments at standard variable rates they could be paying significantly more than is necessary.
Another bank followed suit with the others this week, ME Bank cut their variable members package interest rates to 3.09% for borrowing under 80% and less than $700k and for greater than $700k and less than 80% they are 3.04%
Speaking of interest only ME also have a 3 year fixed rate for investors at 3.28% under 90% which is certainly sharp.
I hope you all have a fantastic week out there, let me know if you want to discuss a scenario or get me to run a property report for any meetings you might have coming up this week.
JC
Scenarios and interest rates quoted above are suggestions and constitute general advice only.
Justin
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