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BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.


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BFCSA: Big four slash lending rates in 'war' to boost profits and grab market share

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Big four slash lending rates in 'war' to boost profits and grab market share

Australian Financial Review Mar 11 2018 3:54 PM

Duncan Hughes


Big four banks continue to slash mortgage rates in a bid to revive sluggish real estate markets, boost profits and squeeze out smaller lenders who have been grabbing market share because of lending caps on rivals.

Australia and New Zealand Banking Group and National Australia Bank have followed Commonwealth Bank of Australia and Westpac Group by cutting key property rates by up to 50 basis points.

Weekend property auctions, which are a widely accepted barometer for market conditions, were flat compared to recent months, partly due to today's public holiday in four states.

Clearance rates were about 67 per cent, an increase from the previous week of about 3 percentage points, but well-down on last year's 75 per cent.

Major lenders are aggressively reducing key fixed and investor interest-only rates despite Reserve Bank of Australia and prudential regulators' concerns about record level household debt.

The big four banks have lots of room for additional interest-only cuts because they have undershot the Australian Prudential Regulation Authority's 30 per cent cap on new lending.

"It's war," said Sally Tindell, of, which monitors product rates and fees. "The big banks are opening their books again."

Rate hike

The new lending strategy also indicates the major lenders are not pricing in a rate hike soon, despite the majority of economists predicting that the next interest rate change is likely to be upward.

The falling take-up of fixed rate loans, according to Australian Bureau of Statistics' numbers, also suggests property buyers could also be pushing back the prospect of higher rates.

For example, the proportion of fixed rate loans fell from about 17.5 per cent to about 15 per cent in the final three months of last year, according to the statistics.

"This may indicate customers' need for lower repayments and are not willing to pay a bit more now for the insurance against rising rates," said Anthony Baum, chief executive of Tic:Toc Home Loans.

The big four are targeting controversial interest-only loans, which postpone repayment of principal for a set term, can encourage higher debt and potentially increase the risk of household financial stress.

ANZ, which recently announced about 25 per cent of loans were interest-only, is cutting three and five-year fixed rates by 40 basis points on their investor interest-only Breakfree packages.

Other interest-only rates are being cut by 25 and 30 basis points.

Principal and interest residential investment loans are being cut by between 10 and 20 basis points over one and five years.

Market share

NAB is cutting its five-year fixed rate for owner occupiers paying principal and interest by up to 50 basis points. It is also cutting two and three-year fixed rates for investor interest-only loans by 30 basis points.

Both banks were responding to CBA, the nation's biggest lender, which recently cut its two-year investor-only rate by 50 basis points to 4.34 per cent.

CBA's CEO-elect, Matt Comyn, has flagged plans to rebuild interest-only market share after over-shooting the regulatory cap.

Westpac also cut the popular two-year investor rate by 14 basis points.

The big four are also clawing back market share lost to smaller lenders and regulation-lite non-ADIs when they slammed on the brakes to meet APRA's caps.

Borrowers claim lower lender rates are being offset by tougher terms and conditions, such as long-term capacity to repay, which means many borrowers are still finding it tough to get a loan.

Bankwest, and BlueBay Home Loans recently cut rates by up to 20 basis points, reduced investment loan loadings for low documentation loans and boosted features for borrowers who might not qualify with big four borrowers.

ING, Macquarie Bank and Virgin Money have also reduced rates on their interest-only products.

Mortgages represent about 55 per cent of the nation's bank loans, according to analysis by Morgan Stanley. They make up about 25 per cent of group revenues but contribute 30 per cent of cash earnings, according to its analysis.

Melbourne and Sydney's auction clearance rates of 66 per cent and 72 per cent respectively compared to nearly 80 per cent last year.

Alternative market analysis by Adelaide Bank shows housing affordability as a proportion of median family income is falling and that first-time home buyers are becoming more active, except in Western Australia.



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