Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
From The AFR. Westpac, the nation’s second largest mortgage lender, is ditching mortgage and equity-release products in a high-level review of its product range and underwriting standards. The top-down review is expected to reassess dozens of loans and lending packages, which include credit and insurance products, as the bank and its subsidiaries adjust lending criteria … Continue reading “Westpac Tightens Mortgage Underwriting Some More”
Traditional thinking is that higher loan to value loans are more risky than lower loan to value loans. We see this in the way banks price in risk, through their underwriting standards, and Lenders Mortgage Insurer premiums rise as LVR rises. However, portfolio analysis from our core market model shows this is a myopic view … Continue reading “Where Are The Mortgage Risks Lurking?”
From The Real Estate Conversation. Despite most economists predicting the Reserve Bank board will leave rates on hold at today’s board meeting, many Australians expect mortgage rates will rise this year, and are considering switching to fixed rate loans. Despite most economists predicting the Reserve Bank board will leave rates on hold at today’s board meeting, many Australians expect mortgage … Continue reading “Aussies expect mortgage rates will keep rising”
Digital Finance Analytics Core Market Model is now being used by a growing number of financial services companies and agencies who want to understand the true dynamics of the current mortgage market and the broader footprint of household finances across Australia. The DFA Approach By combining our household survey data, with private data from industry … Continue reading “Digital Finance Analytics – Quenching The Thirst For Accurate Household Mortgage Data”
An excellent research piece from institutional investment fund JCP Investment Partners, picked up in the AFR today. Their granular analysis of the mortgage sector (including leveraging our data), underscores the risks in the mortgage books, and explains the RBA’s recent change of tune on household finances. As a young bank analyst learning the trade in … Continue reading “Mortgage Book Risks – LTI The Key”
From The Adviser. Mortgages will bear the brunt of the federal government’s new big bank tax, according to one analyst, who believes rate hikes will not be enough to prompt customers to switch lenders. The surprise levy in Tuesday’s federal budget has widened the rift between government and the banks. All four majors have now … Continue reading “Investor loans to be ‘hardest hit’ by mortgage repricing”
Today using our latest mortgage stress and probability of default data, we explore the top ten highest risk post codes across the country. Specifically, we look at where we expect the largest number of mortgage defaults to occur over the next few months. We explore the latest mortgage stress and default modelling, using data to … Continue reading “The Latest Top 10 Post Codes In Risk Of Mortgage Default”
From The Adviser. Mortgage brokers have an important role to play for the increasing number of households experiencing mortgage stress, as they are a “very good source of advice” according to a market analyst. Around 52,000 households are now at risk of default in the next 12 months, according to mortgage stress and default modelling … Continue reading “Brokers have ‘important role to play’ for stressed households”
From Investor Daily. The Australian mortgage market’s heavy reliance on brokers increases system-wide bank risk, warns Spectrum Asset Management. In a ‘Spectrum Insights’ article released recently, Spectrum Asset Management principal Damien Wood put forward his views that the third-party channel is a significant risk that could spark problems for Australia’s banks. Mr Wood noted that … Continue reading “Banks exposed to mortgage broker risk”
From Australian Broker. A staggering 57% of mortgage holders could not handle a $100 increase in their loan repayments, according to new research by Finder.com.au. This additional $100 is equivalent to an interest rate rise of just 0.45% based on the national average mortgage of $360,600. This means the average standard variable rate of 4.83% … Continue reading “$100 tipping point for 57% of mortgage holders”