Steve and I discuss the latest in interest rate movements, refinancing, and the impact on household budgets. We look at how households can save significantly and ensure they have the best deals on mortgages and savings rates.
We know that many are still not on the best available rates and as a result are paying more than they need to, which may benefit bank profits, but which do not help individual household cashflow.
Steve Mickenbecker is in Canstar’s Group Executive Team, bringing more than 30 years of experience in the Australian financial services industry. As a financial commentator for Canstar, Steve enjoys sharing his expertise across topics such as home loans, superannuation, insurance, mortgages, banking, credit cards, investment, budgeting, money management and more.
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My latest Friday afternoon chat with Journalist Tarric Brooker, as we walk through the key charts as we come to the end of 2022. So, what might 2023 look like?
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With the latest rises in rates of 3% flowing through to the markets, we look at the impact, now and ahead with Steve Mickenbecker from Canstar.
CONTENTS 0:00 Start 0:53 Housing Shortages and Stress 11:40 Interest Rates Moves 20:00 Fixed Rate Cliff Ahead 25:30 Credit Card Issuing Up 34:00 Refinancing Risks 40:30 Deposits 49:00 Financial Homework For The Holidays
Steve Mickenbecker is in Canstar’s Group Executive Team, bringing more than 30 years of experience in the Australian financial services industry. As a financial commentator for Canstar, Steve enjoys sharing his expertise across topics such as home loans, superannuation, insurance, mortgages, banking, credit cards, investment, budgeting, money management and more.
Given we now have mortgage rates 3% higher than at the start of the year – analysts are asking whether there are yet signs of mortgage portfolio risks in the banking system.
We certainly know that households cash flows are under pressure, from our own mortgage stress analysis, and Roy Morgan’s research on consumer confidence and their own mortgage stress analysis.
And we know that APRA’s 3% “Buffer” is being breached now, and it is even worse when they had set a 2% buffer earlier on.
But all that said, there is a lag between rate rises and delinquency – of months, if not years, so I would not be expecting much movement yet – that comes later. This also aligns with recent incoming data too.
For example, according to the latest Quarterly Statistics from APRA, the banks wrote fewer high loan-to-value ratio mortgages and decreased high debt-to-income lending over the September quarter, which the prudential regulator has welcomed.
They welcomed the fact that the banks have been “improving” the risk characteristics of their new residential mortgage lending, after finding that both high debt-to-income (DTI) and high LVR lending had reduced over the September quarter and suggested that the figures were largely promising given the strength of the banks’ profitability and liquidity positions as well as the reduction in “riskier” lending.
Today’s post is brought to you by Ribbon Property Consultants.
Digital Finance Analytics (DFA) Blog
Are There Signs Of Bank Mortgage Portfolio Stress Yet?
With the latest rises in rates of 3% flowing through to the markets, we look at the impact, now and ahead with Steve Mickenbecker from Canstar.
CONTENTS 0:00 Start 0:53 Housing Shortages and Stress 11:40 Interest Rates Moves 20:00 Fixed Rate Cliff Ahead 25:30 Credit Card Issuing Up 34:00 Refinancing Risks 40:30 Deposits 49:00 Financial Homework For The Holidays
Steve Mickenbecker is in Canstar’s Group Executive Team, bringing more than 30 years of experience in the Australian financial services industry. As a financial commentator for Canstar, Steve enjoys sharing his expertise across topics such as home loans, superannuation, insurance, mortgages, banking, credit cards, investment, budgeting, money management and more.
Another outing thanks to Cookie’s research on property price falls on the portals, plus my own analysis based on DFA stress, this time looking at the falls across the Illawarra.
Whilst not statistically significant necessarily, it does reinforce the down trends. Thanks again to Cookie.
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A quick market update and a deep dive in the UK’s budget announcement, which was as political as it gets! The headline is households will go backwards, as unemployment rises, and a 2-year recession is likely. Worse, personal income tax bands are frozen, so the total tax take will be bigger than ever!
Investment allowances have been cut, and the future Government spending cuts have been pushed out beyond the next election.
The cost of debt to the Government rises.
This scenario is one we should expect to see playing out in other economies too. Living standards will drop.
Today’s post is brought to you by Ribbon Property Consultants.
Digital Finance Analytics (DFA) Blog
The Biggest Drop In Living Standards In Many Decades... [Podcast]
The fallout from the RBA cash rate rises is starting to show in surveys from new home sales, consumer and business confidence. So, we look at some of the latest data and consider the consequences for Christmas spending and beyond.
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