The Reserve Bank of Australia says that Australia’s major lenders are using higher funding costs as an excuse to profit at the expense of mortgage borrowers and businesses.
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Australians feeling increasingly secure in their jobs due to the rapid decline in unemployment rate over the last few months has helped them deal with the pain of tighter interest rates.
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The largest independent mortgage broker in Australia says it intends to launch an assault on the $1 trillion home loan market.
Michael Russell, chief executive of mortgage broker Mortgage Choice says the company is looking at various options for funding that would enable the broker to create a host of home loan products “that are every bit as competitive as the best of the products we have on our panel”.
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Following the lead first set by rivals CBA and ANZ, on Wednesday Australian banking majors Westpac and NAB matched the central bank interest rate hike of 25 basis points.
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A string of consecutive rapid interest rate increases could jeopardize economic recovery in Australia and result in job losses Australian businesses have warned, after the Australian central bank announced an increase in official interest rates to 4 per cent on Tuesday.
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According to the results of a survey conducted by the Housing Industry Association (HIA) and Commonwealth Bank of Australia. Housing has become increasingly unaffordable, as the effects of three consecutive rate hikes, and the rolling back of first home buyers grant have begun to take effect.
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Reserve Bank of Australia (RBA) governor Glenn Stevens says that Australian mortgage holders should brace themselves for further interest rate increases during the year, although the pace of increases will be largely moderated by the way retail lenders react.
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According to a leading mortgage broker, the number of enquiries regarding 100 per cent mortgages has leapt by 250 per cent since the federal government rolled back the extent of its first time home buyer grant at the end of 2009.
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Delinquent mortgage payments are set to increase during 2010, as borrowers struggle to deal with rising interest rates and high credit card bills run up during Christmas, according to global credit ratings agency Fitch.
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Ralph Norris, chief executive of Australia’s largest mortgage lender CBA, says that when a bank considers an increase in lending rates, it must first balance the requirement to make money along with customer needs.
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