RBA , Rates and Federal Budget

• RBA left official rates unchanged and it is just a crystal ball to know if rates are going up, down or staying exactly the same for a while!
• Some banks have made some calls on fixed rates as they seek to position themselves for the long term, for example:
  • First Mac have a 6.04% for 5 years
  • UBank have lowered fixed rates on average by 0.5%
  • Macquarie reduced as well but are pricing for risk (i.e. LVR), now an amazing 5.79% for 2 and 3 years on owner occ less than 70%
• Cash backs were becoming a thing of the past… however ANZ are still throwing some cash around.  They have two specials at the moment, $2,000 for refinances over $250k and $3,000 for first home buyers over $250k

Policy Bits

• Capacity to service a loan…give with one hand (tax cuts) and take with another recently (there’s been increases in the HEM minimum living expense calculators, so overall effect is that they have stayed practically the same recently
• The loan process is getting even quicker at nearly all banks.  Digisign or Docusign is now mostly BAU and its so quick and seamless for customers!  Add this to the PEXA settlement system and things have really come along way in banking automation over the last few years
• Banks can treat rental income quite differently, their treatment can mean the difference of getting a loan and not.  For example some will take 100% of rent, some 80% and also some will only take 80% and still subtract the monthly costs!  On the other side, some banks will add back the negative gearing benefit to enhance capacity to service a loan…confusing hey
• Ever heard of NDIS / SDA properties. Many are very profitable, however they can be very specific in what the banks will lend on, please let me know if you or anyone you know is looking at one or wants to start their research

Bank Turnaround Times / SLAs

• Plenty of fluctuations as always.  Generally speaking not much noise on these at the moment:
  • UBank: 1 day
  • Macquarie: the industry leader is currently advertising 2 HOURS!
  • Newcastle Permanent: 10 days
• One big part of being a broker is having great relationships!  I was working with a customer where he only qualified with one bank!  At short notice we sorted his application asap, however the app was submitted on a Tuesday night with a 5 day SLA known by that bank.  With one message to their BDM, that loan turnaround went from 5 days to 1 as the customer had an auction to attend on the Thursday.  Being a broker isn’t just about crunching the numbers, it can certainly be who you know, not just what you know!!

Other Industry News

·  Do self proclaimed industry “experts” on banking that suggest an account for everything in your life actually help people save money.  Recently I’ve been working with several customers that have between 5 - 10 day to day accounts, each getting smaller interest income than what the sum of the accounts would have and some even getting fees per account.  While everyone will need an individual banking solution that fits them, their spending and saving styles, one thing over 20 years in banking has taught me is more often than not, keeping it simple is a much better outcome.  Direct debits, bulk accounts, auto transfers and using offset accounts…know anyone with too many accounts, I can have a chat

·  Did you know.  UBank used to be the FinTech 86400?  It was bought by NAB, but they remain very separate in their policies and systems and they can be a great option for PAYG customers! 

* Information is general in nature and does not represent advice, please contact us for an individual solution 

Cassie Dittman