Home loan profits slump at Mortgage Choice

Thursday 26 February 2009

Article by Mozo

Home loan brokerage firm Mortgage Choice has announced that its profits shrunk 22 per cent in the last six months of the year as the housing market tanked.

The company saw profits on its home loans fall to $8.25 million, although managing director Paul Lahiff was insistent that it wasn’t all bad for the group.

Mortgage Choice saw a lot more interest in its new low-interest home loans after the Reserve Bank of Australia (RBA) began its interest rate cut bonanza in October.

Since then, the RBA has taken 400 basis points off its interest rates, bringing consecutive waves of new low-interest home loans on to the market.

As a result, the number of people going to Mortgage Choice to compare home loans increased steadily.

“The combination of dropping interest rates and housing prices moderating has brought more people into the market,” said Lahiff.

There has been a record number of first-home buyers entering the market in the last few months as they look to take advantage of the low interest rates and cheap property prices.

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