This week in banking - Things are looking up for first home buyers


Friday 02 August 2019

In this week’s banking recap, we take a look at the current state of the property market, the latest news in the banking app world, and the things business owners should be doing to give their business the best shot this financial year.

Outlook for first home buyers improves

With interest rates at historic lows, we’ve seen a spike in confidence among first home buyers as of late, with many who’ve had their sights on the property market gearing up to take the next step. 

In Sydney and Melbourne, auction clearance rates - which are often an indicator of market strength - have bumped up to 73% and 74%, respectively. For perspective, those numbers were sitting around the 50% mark this time last year. 

“Prices have become more realistic and lower. First home buyers can now borrow more because APRA has gotten rid of the 7% serviceability buffer, which means banks are willing to hand over a larger loan,” said Mozo’s property expert, Steve Jovcevski.

“And with the RBA’s back-to-back rate cuts, they can also lock in a great deal, as the market currently has variable rates of under 3% or really good fixed rates for 4 or 5 years.”

The CommBank app gets a facelift

The CommBank app, a multi-Mozo Experts Choice Award winner, has just undergone a facelift. CommBank app 4.0 was rolled out this week, promising users a smorgasbord of new insights and features. 

Not only will it tell you if you’ve accidentally paid a utility bill twice and remind you if any grace periods on any subscription services are wrapping up, but it will also give you helpful tips for what to do with your tax return once it arrives.

Business owners - start the new financial year right

The 2017-18 financial year is behind us, and business owners are likely cracking open the books and drawing up plans for the year ahead. And with a number of legislative changes entering the picture, there’s a lot they’ll need to get their heads around. If you’re a business owner, we’ve compiled four tips to help you keep your head above water.

Investor rates shaping up

Since June 1 - just before the first RBA rate cut of the year - the average home loan rate for investors paying principal and interest has dropped by 0.35%, while the average rate for interest only loans has fallen 0.37%.

And while the gap between owner occupier and investor rates isn’t set to close any time soon, the reductions have seen sentiment among investors improve.

“It’s encouraging that as well as rate cuts for investors paying principal and interest, we’re seeing a downward movement on interest only loans,” said mozo’s property expert, Steve Jovcevski.

“This time two years ago property investors were staring down average interest only rates of 5.12% and lenders were handcuffed around the volume of loans they could issue by the APRA cap.” 

Whether you're looking for your next investment property or your future home, it pays to keep an eye on the sorts of rates that are available. Be sure to check out our home loan comparison page for an idea.

*WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

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