In the coming year, lenders will make life tougher for borrowers, further raising interest rates and bringing in “small print conditions” that also increase costs.
These are the predictions of Duncan Hughes, long time real estate reporter for the Australian Financial Review
. In a recent article, he looked at what borrowers and – by extension – brokers can expect in 2017.
He pointed to AMP
as one of the many lenders who have hiked the rates of over 130 products since November as a sign of times to come. As well as an increase of 15 basis points
for new and existing residential property investors, the non-major has also introduced a “secure rate guarantee fee” of up to 25 basis points to lock in its fixed rate.
With the Commonwealth Bank announcing it will reprice its interest-only home loans
from March next year, this was also a signal of next year’s trends, he said.
“Other lenders are likely to follow because of regulator pressure to crack down on interest-only loans because of fears borrowers have no strategy for repaying the principal and could face financial stress as rates rise.”
has also introduced changes to the reference rate on interest-only repayments – a move which is likely to be repeated by other lenders.
“The bank calculates the interest rate, also known as the annual percentage rate, by starting with the reference rate and adding or subtracting the premium or discount, which is the margin,” he said.
“Some mortgage brokers claim deep discounting by lenders to attract new business will be wound back during 2016.”
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