Mortgage Shopper

Mortgage rate alert. CBA increases fixed interest mortgage rate

Mortgage rates tipped to increase as CBA ups fixed rate mortgage ahead of RBA rises.

Mortgage rate alert: Mortgage Rates are now tipped to rise several times as the Australian economy strengthens. Whilst The National Australia Bank and the Commonwealth Bank of Australia might both claim that they are the biggest bank in Australia, in terms of mortgage home loans, the CBA grabs first place.

And as Australians relish the fact that they missed out on the World recession and have renewed their love affair with residential property the banks are tipping the Reserve Bank of Australia will be raising the cash rate anytime soon.

This was verified by the Commonwealth Bank raising interest rates on its new fixed-rate loan offers. 

Raising interest rates on future fixed-rate loans without any increase by the Reserve Bank, is an indicator that variable rate increases are coming. 

The Commonwealth's one-year fixed rates will rise by half a percentage point to 6.19 per cent.

Its two-year fixed rate mortgage is going up by 30 basis points, while three-year fixed home loan rates will increase by 15 basis points.

Treasurer Wayne Swan said today that "banks usually increase their fixed rates in response to higher global funding costs, while their variable rate changes tend to track the RBA's movements."

"It's a measure of what's going on in international markets as much as anything else," he said.

In the meantime The Governor of the Reserve Bank made the point yesterday that the increasing strength of the Australian Dollar and economy are pointing to rising interest rates in the near term.

Author: Rick Adlam Mr Mortgage

Are Mortgage Brokers honest with home buyers and refinancing Homeowners

Mortgage brokers are in the firing line of late, and now Westpac bank and the Commonwealth bank are putting pressure on accredited mortgage brokers, telling them that if they don’t have a certain number of loans settle with them within a 6 month time frame, they will lose their accreditation with the lender. This brings into question a brokers relationship with his or her customer.

The mortgage brokers have responded by saying that their “Independence” is in jeopardy, because many brokers will bow to the pressure and set loans for clients for the home buyers or refinancing homeowner with these lenders, rather than the best loan for the customer.

In my prior article I was a little harsh on mortgage brokers, and this brought up the question of the meaning of the "honesty" of the dealings of the Mortgage brokers.

So here is my revised take on this important topic.

The Mortgage Brokers Intent indicates his or her honesty.

Honesty in this context should not be taken on a legal or literal definition of the relationship between the mortgage broker and the lender and the home buyer or refinanced homeowner, but on the intent of the mortgage broker when they are helping their customer select the best loan for them.

If the Mortgage Broker has the intention of always selecting the very best mortgage lender and mortgage loan product for their customer, then its obvious to an impartial viewer that the mortgage broker can be considered an honest mortgage broker.

If the Mortgage broker explains to the client that they are offering a no cost loan service to them, because the lenders are paying them a commission for introducing the loan to the lender, they are being honest in my view.

If on the other-hand the mortgage is selected because it favours the mortgage broker and his or her own personal interest, then the mortgage broker would have to be considered dishonest in my view.

Banks and other mortgage lenders that offer lenders inducements to put loans through them, compromise the brokers’ impartiality and their honesty, and the trust that a customer puts in them. So do lenders that force lenders to have sales targets. Doing so in my view makes mortgage brokers appear commission representatives of the lender. 

That has to be a bad thing for the mortgage broker industry and the customer than place their trust in a Mortgage Broker to do the right thing by them, according to Mr Mortgage