Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
subscribe to our newsletter

FBAA hits out at cheaper mortgage claims

The Finance Brokers Association of Australia (FBAA) is alarmed by reports the European Central Bank's rate cuts will mean cheaper mortgages for Australian borrowers.

FBAA chief executive Peter White said that while everyone would like cheaper rates, it will also encourage people to overcommit without taking future rate rises into consideration.

“Our response to these media reports is 'caveat emptor' – buyer beware – as rates that are too low can only go in one direction,” Mr White said, adding that abnormally low rates may encourage more loans but, “the upwards correction could be quite large to compensate the extreme low”.

Advertisement
Advertisement

“This will not only remove any advantage borrowers had but could have the reverse effect and result in people losing their homes due to a failure to meet increased payments,” he said.

Just as the FBAA has often called for banks to absorb increases to protect borrowers, they should equally absorb any unusually low cost of funds, Mr White said.

“Borrowers thrive when interest rates are more constant,” he said.

“Any drop on the cost of funds simply won't last. It can't.”

FBAA hits out at cheaper mortgage claims
mortgagebusiness

Latest News

The Victorian government has announced new $5,000 grants for businesses impacted by the second round of restrictions across metropolitan Mel...

A big four bank has announced that it will tighten its serviceability criteria for mortgage applications by lowering its debt-to-income thre...

A buyer’s agent believes the housing market will remain robust even after the expiry of the banks’ mortgage repayment deferrals, adding ...

FROM THE WEB
podcast

LATEST PODCAST: What's being done to support home buyers?

Do you expect COVID-19 to reduce or increase your business flows?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.