Good Morning!
A Humpday roundup, now here’s one I haven’t done before.
Spring season is certainly staring to spin itself up into a whirlwind. Which always brings out a certain kind of crazy, which I think Josh Frydenberg appears to have caught or maybe he’s drinking the cool aid…
The biggest news as I am sure you all heard was the announcement in the winding back of responsible lending. Being that it has not yet been passed we don’t know what it will really mean. As you can imagine there have been plenty of news articles postulating the outcome.
My personal opinion is that with Best Interest Duty implementation (BID) looming January 1, along with all of the work required to meet the BID requirements and the fact that banks are so painfully slow at getting things done, that something had to give.
The Westpac/ASIC Wagyu and Shiraz case was probably the tipping point for the government to decide that winding back the responsible lending might assist in getting things done faster in bank land. BID means that Brokers will need to justify in greater detail why a product, rate and package have been chosen, how clients expenses have been verified, how their needs and objectives have been identified and why the proposal is in the best interests of the clients. Its likely that this may mean banks can operate a bit faster without the forensic pouring over clients spending statements and that responsibility will fall on the shoulders of the broker. It’ll be interesting to see how this one pans out.
There was quite a bit of conjecture in the past week too around the RBA meeting next week with several pundits stating that they believed the RBA would cut by 0.10%. Those voices have fallen silent in the wake of the responsible lending announcement.
A couple of lenders have cut rates again, ING dropping their variable rate for borrowing over $1million and under 80% LVR to 2.45%, $150k - $1mil is now 2.49%, $150 borrowings under 90% are now 2.59% which is very cheap variable rate money.
Reach out if you have any questions or scenario's you'd like me to look at.
JC
Scenarios and interest rates quoted above are suggestions and constitute general advice only.
Comments