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A look at interest margins on mortgages

Discussion in 'Finance & Banking' started by jeromanomic, 24th Jun, 2015.

  1. jeromanomic

    jeromanomic Active Member

    Joined:
    20th Jul, 2014
    Posts:
    30
    Location:
    Perth, WA
    Do Banks Pass on Rate Cuts? — The Finance Guy

    Interesting to see that bank margins on mortgages increased substantially during a period when consumers most needed economic relief...

    It will be interesting to see what happens in this space if Australia goes through a down turn
     
  2. Albertus Waldron

    Albertus Waldron Member

    Joined:
    13th Jul, 2012
    Posts:
    11
    Location:
    Sydney
    Bank Margins -

    Hi Finance Guy, What I find interesting is the fact that Banks and some lenders are passing on rate hikes to cover the capital they need to raise under the new regulations since July 2015. However many lenders have been testing interest rates as high as 8% since the GFC.
    As a result - actual default rates appear to be down on the typical averages and you have to wonder how high rates might go before we see some actual stress and distressed selling in the market place.
     
  3. Albertus Waldron

    Albertus Waldron Member

    Joined:
    13th Jul, 2012
    Posts:
    11
    Location:
    Sydney
    Finally some true competition seems to be returning

    I don't really agree with some of the benchmarking rules that APRA have enforced on the lender around minimum test interest rates payments and restriction to investor loans but at the front line I can say it is seeing some intense competition between lender who in the past simply said they were so big they didn't need to compete on rate.