Industry Analysis & Industry Trends
Mortgage lenders help consumers to realise the Australian dream of owning a home. However, they were not immune from the economic downturn, which led to a drop in demand for home finance. The beginning of the past five years was characterised by consumer deleveraging, low credit availability and generally low sentiment. This started to change as the government lowered the official cash rate and implemented numerous assistance programs to support growth in the residential housing market. As a result, the value of mortgages issued by the industry has grown over the past five years. Approvals of new loans declined only in 2010-11 and have grown at an increasing rate since then. In March 2014, approvals of new loans were 27.7% higher than the previous year... purchase to read more
Industry Report - Industry Products Chapter
The Mortgages industry writes two major types of mortgages: fixed-rate loans and variable-rate loans. The variable-rate loan market is far more dynamic than the fixed-rate market, with several different types available with unique features that cater for the varying needs of borrowers. Other loan types include lines of credit and low documentation (low doc) loans.
Standard variable loans
The most common type of mortgage is the standard variable loan. This loan has a fluctuating interest rate depending on the underlying cash rate, as set by the RBA. Standard variable loans offer more features than a basic variable, such as an offset account, early repayment options or a redraw facility. However, this flexibility comes at a cost... purchase to read more