Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
subscribe to our newsletter
FBAA hits out at cheaper mortgage claims

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

A new cycle of “meaningful” growth cannot be restarted through property, the CEO of NAB has said, suggesting that business investment is...

New figures from AMP Bank have shown a “significant uptick” in the number of home loan customers switching from IO to P&I loans ahea...

Customer-owned banking institutions wrote $6.6 billion in the 2019 financial year, up 7.8 per cent from the previous year and outpacing grow...

FROM THE WEB
podcast

LATEST PODCAST: New lending launches

Do you think the mortgage market will see more consolidation this year?

Website Notifications

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