Changes to non resident lending in Australia

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Changes to non resident lending in Australia May 2016

There has recently been some change in non-resident lending in Australia. Many lender that have previously been major players in the non-resident home loan market have pulled out completely from lending to Australian non-residents.

It is believed that these lenders are pulling out of home loans for non-residents in Australia because there have been a number of incidents where fraudulent applications have occurred, primarily around false income declarations of borrowers on loans for investment properties being purchased in Australia.

Some lenders are have also announced that these changes are supporting Australians to get into the property market. However, typically foreign non-residents are purchasing a different type of property than Australians, such as new high density inner city apartments in Melbourne Central Business District (CBD) or other major Australian city CBDs.

Non-resident home loans Australia

Are non-resident home loans in Australia still available? Yes, home loans for non-residents to buy property in Australia are still available from some lenders. Some lenders are now still lending to non-residents but at lower loan to value ratios (proportion of the property’s value being borrowed). Whilst other options are at slightly higher interest rates and fees.

Self employed non-resident home loans and salary based non resident home loan applications are still accepted.

Many of these changes also impact temporary residents in Australia looking to get a home loan.

Australian expat home loans

Are Australian expat home loans impacted? No, there are still many options for Australian expatriate home loan borrowers in the Australian mortgage market. Australian expats with foreign incomes and who are living overseas still have many options. If you are an Australian expat contact Oak Laurel to find a home loan that meets your needs.

Contact Oak Laurel Mortgage brokers about an Australian expat home loan.

 

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RBA cash rate update May 2016

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RBA cash rate update May 2016

RBA cash rate update May 2016. The Reserve Bank of Australia cut the cash rate by 0.25% to 1.75% today the 3 May 2016. The cut comes after the cash rate being stable at 2% since May 2015.

In the Statement by the Governor of the Reserve Bank of Australia, Glenn Stevens, on the Interest Rate Decision, he sites low levels of inflation as the the primary reasons for the cash rate cut.

Other reasons that the board had reportedly considered include:

  • Slower growth in the Chinese economy
  • Indications are that growth is continuing in 2016, though probably at a more moderate pace.
  • Labour market indicators have been more mixed of late.
  • Stabilisation of the housing market
  • Prudent lending standards.

Though further reasons were considered they appear to be rather benign and appear not to be real drivers of the decision cut rates.

In reaching today’s decision, the Board took careful note of developments in the housing market, where indications are that the effects of supervisory measures are strengthening lending standards and that price pressures have tended to abate. At present, the potential risks of lower interest rates in this area are less than they were a year ago. Taking all these considerations into account, the Board judged that prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting. Glenn Stevens, Governor of the Reserve Bank of Australia

Which banks have passed on the interest rate cut?

The National Australia Bank, Westpac, Commonwealth Bank and Bank of Queensland have announced that they would pass on the full interest rate cut to their home loan customers. However, ANZ has announced that it would only cut its home loan rate by 0.19%. Other banks and lenders are yet to make any announcement on if they will pass on the cut and by how much.

Commentary

Curious timing for rate cut given that the decision was made on the same day that Federal budget is due to be handed down and just before an election is due to be announced. The Research Bank of Australia board could have taken a wait-and-see approach with inflation and economic factors as they have done for the past year but decided to cut the cash rate anyway. Not that I am opposed to the cut but perhaps it could have been made earlier.

The Australian dollar tumbled by about 1% after the announcement, probably one of the RBA’s intended impacts of the cut.

Mortgage Broker Oak Laurel By Dr Nigel Abery (Ph.D.)

Looking to cash in on the interest rate cuts?

We can help you to shop around to get a better interest rate. Find out what Oak Laurel mortgage brokers can do for you

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