Friday, April 24, 2009

Window of opportunity closing

The window of opportunity to secure a low fixed rate home loan could be closing with the major banks now moving to bump up fixed term rates. Effective this week, the four major Australian banks are offering three year rates ranging from a low of 5.49 percent to a high of 6.19 percent. Accross the four banks this represents a rise of between 20 to 40 basis points.
One of the four also took the opportunity to increase its 5 year rate by 45 basis points to 6.84 per cent.

Despite expectations that the cash rate will fall further this year the rising cost of funds has once again been blamed for the banks' decisions to claw back shrinking home loan margins.
While not as attractive as the recent 4.99 percent we offered to customers, a three year rate of 5.49 percent is still reasonably attractive in the context of historical rate levels.

Thursday, April 23, 2009

You have the power to save

I was paying my electricity bill last week and happened across a person instead of the usual machine. In the course of paying my account they noticed I was paying a little extra each week ($0.69) so I could access some renewable 'green' energy. I was told for another 0.31 cents extra I could qualify for additional green power and get one month's electricity credited back to my account.

Check out your current electricity account and see how much you are paying. If this sounds interesting to you simply switch to Origin for your household electricity and natural gas and they'll reward you with a month off from paying your electricity bill.

They calculate the total amount of electricity you used over the previous 12 months and divide it by 12. This amount will then be credited to your electricity bill after your 12 month qualifying period so long as you pay your accounts by the due date or advise them when you will pay if you can't make the due date (this happens to all of us from time to time).

Why not visit and see if this is something you could use.

Do you know any money saving options for other everyday expenses?

Tuesday, April 21, 2009

Big Aussie banks control 95% of all lending

A Federal Treasury analysis has revealed the extent to which competition in the Australian lending market has been eroded by the current financial meltdown in the US. While officials are at pains to explain that Australian banks are in nothing like the situation of their US counterparts, cost of funds has seen competition in the banking sector return to almost pre-deregulation levels.

Non-bank lenders' share of new owner-occupied loans has shrivelled from more than 20 per cent in July last year to around 5 per cent currently, after the financial crisis all but choked off the supply of cash available to smaller lenders. Non-banks comprise mortgage managers like Aussie, Wizard and RAMS as well as building societies and credit unions.

While the Federal Treasurer, Wayne Swan has repeatedly urged disgruntled home buyers to "vote with their feet" and switch to cheaper loans, the growing dominance of the big banks means there is now little scope to do this. Residential mortgage-backed securities (RMBS) - the key source of funds for the non-bank sector - are now being issued at a rate of about $830 million a month, compared with $6 billion a month before the crisis. The Treasury analysis showed if the lending market were to return to normal, home buyers would be able to access interest rates about half a percentage point lower, saving $80 a month on the average mortgage.