Getting a Mortgage in Australia

Current Australian Mortgage Rates:

Fixed Interest Mortgage Rates

Fixed Rate Increases in June 2009

CBA raised its 5 year Fixed rate to 7.34%

Westpac raised its 5 year Fixed rate to 7.19%

NAB raised its 5 year Fixed rate to 7.19%

ANZ are also quoting a 5 year Fixed rate of 7.19%

Commonwealth Bank

5 Year Fixed Rate Mortgage
7.34% 15th June 2009 (after todays rise announcement)
6.84% April 2009
6.39% March 2009

St George Bank

5 Year Fixed Rate Mortgage
6.64% June 2009 (?? Possible rises to come)
5.94% April 2009
8.40% Feb 2008

Heritage Building Society

6.29% June 2009 (?? Possible rises to come)
6.29% April 2009
6.29% Feb 2009

Commonwealth Bank Increases Variable Home Loan rate

12th June 2009

The Commonwealth Bank today increased its Standard variable home loan rate from 5.64% to to 5.74%.

The bank also confirmed that some home loans with fixed interest rates will also rise by a similar figure.

April 2009

7th April 2009 - RBA cuts Interest rates by 0.25%
The RBA has again cut interest rates by another 0.25% on the 7th April 2009.

This brings the official Interest rate down to 3%

BUT... the banks are not all reducing their Mortgage Interest rates this time

• CBA is cutting its rate by 0.10% down to 5.64%
• NAB is NOT cutting its rate and staying at 5.74%
• Westpac is cutting its rate by 0.10% down to 5.81%
• ANZ is cutting its rate by 0.1% down to 5.81%

The smaller banks and Building Societies ?

• Bendigo Bank is NOT cutting its rate
  
• Adelaide Bank is NOT cutting its rate
  
I have read that these will give the full 0.25% reduction, which would mean...

• Heritage Building Society down from 5.55% to 5.3%
  

Fixed Rate Mortgages

With interest rates now very low, it is time to watch the Fixed Rates, to see when they will begin to increase.
Some 5 Year Fixed Rate Mortgage examples to watch in the future:

• Heritage Building Society 6.29% at Feb 2009
  
• Commonwealth Bank 6.39% at March 2009
  
• St George Bank 5.94% at April 2009 (This was 8.4% in Feb 2008)
  
  

An example of one banks current fixed rates as at April 22nd 2009

1 Year Fixed 5.39% p.a.
2 Year Fixed 5.79% p.a.
3 Year Fixed 6.19% p.a.
4 Year Fixed 6.59% p.a.
5 Year Fixed 6.84% p.a.
7 Year Fixed 7.24% p.a.
10 Year Fixed 7.39% p.a.
15 Year Fixed 7.39% p.a.


and again at 15th June 2009 Fixed rates

1 Year Fixed 5.39% p.a.
2 Year Fixed 5.94% p.a.
3 Year Fixed 6.69% p.a.
4 Year Fixed 6.99% p.a.
5 Year Fixed 7.34% p.a.
7 Year Fixed 7.79% p.a.
10 Year Fixed 8.09% p.a.
15 Year Fixed 8.19% p.a.

February 2009

The Reserve Bank of Australia reduced Interest rates by 1% on 3rd February 2009

The following bank announcements have now been made about Mortgage Rate cuts:

• NAB is cutting its rate by 1.0% down to 5.74%
• CBA is cutting its rate by 1.0% down to 5.74%
• Bendigo Bank is cutting its rate by 0.9% down to 5.90%
• Adelaide Bank is cutting its rate by 0.9% down to 5.90%
• Westpac is cutting its rate by 1.0% down to 5.91%
• ANZ is cutting its rate by 1.0% down to 5.91%

How Much Can you Borrow ?

That's a common question, so here are some links to help you find the answer, but don't forget to also read the next section, Credit Cards and Mortgages.

Most banks can discount their normal rates by about 0.7% to selected borrowers, it always pays to ask. You may be a "selected" borrower if your loan is over $250,000.

Mortgage Calculators

• MFAA - Loan Repayment Calculator
• MFAA - How much can you borrow Calculator

But remember each bank will have its own calculator, based on THEIR lending policies, and may be different to the above one

Credit Cards and Mortgages

Mortgage lenders will take any Credit Card LIMITS into account when you apply for a Mortgage. So, if you can, pay off any balances, before applying, and have your card limit reduced to a few hundred $ only.

In my experience, if you pay off the balance at the end of each month, and therefore pay NO interest, the lender can often be convinced to ignore that cards credit limit, but you need to be able to prove it.

Most Bank Lenders will also offer you a credit card, effective after the mortgage is done, and that limit is ignored in the calculation.

Average Mortgages in Australia

NSW
In New South Wales, the average Home Loan in April 1979 was $25,400
In April 1989 it was $85,400, an increase of 218.1% over the previous 10 years.
In April 1999 it was $158,500 an increase of 96.16% over the previous 10 years.
In April 2009 it has become $283,300 an increase of 78.74% over the previous 10 years.
The NSW increase from 1979 to 2009 has been 1015.4%

VIC
In Victoria, the average Home Loan in April 1979 was $24,300
In April 1989 it was $68,400, an increase of 181.48% over the previous 10 years.
In April 1999 it was $123,500, an increase of 80.56% over the previous 10 years.
In April 2009 it has become $249,000, an increase of 101.62% over the previous 10 years.
The Victoria increase from 1979 to 2009 has been 924.7%

QLD
In Queensland, the average Home Loan in April 1979 was $21,700
In April 1989 it was $51,900, an increase of 139.17% over the previous 10 years.
In April 1999 it was $116,700, an increase of 124.86% over the previous 10 years.
In April 2009 it has become $270,800, an increase of 132.05% over the previous 10 years.
The Queensland increase from 1979 to 2009 has been 1147.9%

WA
In Western Australia the average Home Loan in April 1979 was $23,900
In April 1989 it was $54,500, an increase of 128.03% over the previous 10 years.
In April 1999 it was $115,900, an increase of 112.66% over the previous 10 years.
In April 2009 it has become $282,800, an increase of 144.00% over the previous 10 years.
The Western Australia increase from 1979 to 2009 has been 1083.3%

Average Mortgage compared to Average Wage

The following figures show the average Home Mortgage against the average Male Full time wage for April 2009, for each State.

• NT $275,700 against $66,877 or 4.12 times Male income
  
• NSW $283,300 against $69,253 or 4.09 times Male income
  
• QLD $270,800 against $66,518 or 4.07 times Male income
  
• VIC $249,000 against $66,970 or 3.72 times Male income
  
• WA $282,800 against $81,276 or 3.48 times Male income
  
• SA $214,800 against $63,096 or 3.40 times Male income
  
• ACT 261,900 against $78,124 or 3.35 times Male income
  
• TAS $191,700 against $59,872 or 3.20 times Male income
  

Links

Mortgage Information Comparisons

• Cannex - an independent Financial Services Research Group

• Infochoice - a web site to compare banks and their services

Mortgage Brokers

• Aussie home loans
• Rams home loans
• Wizard home loans - About 230 Wizard branches. On 27 February 2009 Wizard Home Loans was sold to Aussie home loans
• Mortgage Choice - At June 2003, Mortgage Choice has over 400 franchisees nationwide

Previous Mortgage rates

Looking at Mortgage rates since 1989, the average stndard variable rate for the last 20 years has been 9.12% !!

December 2008

Standard Variable Mortgage rate changes following the RBA interest change cut on Dec 3, 2008

• 6.74% CBA
• 6.74% NAB
• 6.91% ANZ
• 6.91% Westpac
- Effective from around the 12th December

November 2008

Standard Variable Mortgage rate changes following the RBA interest change cut on Nov 4, 2008

• 7.71% Westpac.
• 7.74% NAB.
• 7.74% Commonwealth.
• 7.74% ANZ.
• 7.74% St George.

July 2008

Australian Standard Variable Mortgage rates at July 2008

• 9.47% Westpac Bank.
• 9.58% Commonwealth Bank of Australia
• 9.61% National Australia Bank.
• 9.62% ANZ Bank
• 9.67% St George Bank.

Historical Interest Rates

Mortgage Interest rates during the terms of the last 4 governments have been:

• 1972 - 1975 rates went UP from 7% to 10.38% (up 3.38%)
  
• 1975 - 1983 rates went UP from 10.38% to 12.5% (up 2.12%)
  
• 1983 - 1996 rates went DOWN from 12.5% to 10.5% (down 2.00%)
  
• 1996 - 2007 rates went DOWN from 10.5% to 8.55% (down 1.95%)
  
• 2008 - 2...