Big Four's mortgage exposure a “systemic risk”

Font size :
Big Four's mortgage exposure a “systemic risk”
Banks’ increasing exposure to housing loans may prompt regulators to force the Big Four to hold more capital against risk, which will drive up mortgage costs. David Murray, a former Commonwealth Bank chief executive tasked by the government to look at the issue, described the rapid rise of mortgage exposure as a “systemic risk” in his 460-page interim report. The Big Four are allowed to hold much less capital in reserve than regional banks because their size theoretically insulates them from shocks. This lower capital requirement gives them a strategic advantage against regional rivals, arguably incentivising them to overweight their portfolios in home mortgages. Smaller banks have been agitating for their larger rivals to come under the same constraints. Read the full story here.
Brokers don't always provide the best deal 
About half of prospective home buyers use a mortgage broker during the loan application process to answer questions, lodge paperwork, track progress and help with settlement. Brokers are often better negotiators than their customers. But those who use mortgage brokers also look at only about a fifth of the lenders one might find going it alone – particularly online lenders like UBank and UBank and The difference may cost customers money, said Canstar research manager Mitchell Watson. "A broker has a panel of lenders and they'll provide you the best option from that panel but outside of that, people should also consider what else is out there and online is a growing space with new lenders coming through regularly," Mr Watson says. Read the full story here.
Three ACT suburbs … and Melbourne … take top places for the fastest growing areas of Australia
Three new ACT suburbs – Crace, Bonner and Casey –  lead the Housing Industry Association Economics Group list of fastest-growing areas in its Population and Residential Building Construction report. All three of these areas recorded population growth in excess of 40 per cent between 2012 and 2013. It helps that in each case, the area was essentially empty before a wave of construction populated them. Melbourne stands out in the list, given its large existing population, simply because it’s harder to outgrow the country when you’re already the second-largest city on the continent. Suburbs required to population growth faster than the national average to make the list, along with approved residential building work in excess of $100 million, for regions in New South Wales, Queensland, Victoria and Western Australia, or in excess of $50 million for South Australia. The Northern Territory and ACT were required to record over $20 million. In Tasmania the threshold was $5 million. Only 50 suburbs met both criteria. Read the full story here.

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now

Mortgage News and Articles

How to tell when a housing market is cooling How to tell when a housing market is cooling

You need to check clearance rates, listings, and the price gap, among other factors Read more

Growing demand for green apartments in Sydney Growing demand for green apartments in Sydney Both owner-occupiers and investors favour eco-friendly buildings for their energy-saving features and reduced environmental footprint ... Read more

Are property investors as rich as they appear? Are property investors as rich as they appear? A multi-property portfolio doesn’t guarantee easy millions ... Read more

Be proactive about getting a better mortgage deal Be proactive about getting a better mortgage deal Apathy could be costing you a considerable amount of money over the lifespan of your loan ... Read more

More mortgage news and articles

Sponsored Links

Thursday, Sep 21, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
  • How much do you want to borrow?
  • How much deposit do you have?
  • How much is your house worth?
  • How much do you still owe on your mortgage?
  • What type of mortgage do you have?

  • How much is your new home?
  • How much do you want to borrow?
  • How soon do you want a mortgage?
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords