Home loan approvals to first home buyers fall by 40%

Home loan approvals to first home buyers at a leading mortgage broker were down 40 per cent during the first three months of 2010.

Loan Market also reported a steep decline in overall home loan approvals for the quarter as a result of rising official interest rates, with its mortgage approvals falling 15 per cent during the period compared to the last quarter of 2009.

The company’s chief operating officer, Dean Rushton, said the Reserve Bank of Australia’s (RBA) decision to lift the cash rate five times since last October to 4.25 per cent had resulted in a significant drop off in demand for housing finance.

"There’s a strong possibility of another 0.25 per cent rise from the RBA next week but the mortgage broking industry and particularly homebuyers would like to see the central bank leave things alone for a while," he added.

Such comments may interest Aussies who wish to compare home loans in search of the most affordable options. This week, it was reported that the pace of Australia’s rapid house price growth finally slowed last month.

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