“Banks remain willing to lend”: APRA boss

“Banks remain willing to lend”: APRA boss

Australia’s chief banking regulator has dismissed the idea that the country is experiencing a credit squeeze.

APRA chairman Wayne Byres, in his opening statement to the Senate Economics Legislation Committee, said that while growth in home loans is slowing, this slowdown isn’t occurring simply because banks are reluctant to give mortgages.

“It also reflects a range of other factors, including a natural reduction in the demand for new credit at a time of declining prices, and when existing household debt levels are already very high,” he said.

“Banks remain willing to lend, and continue to provide competitive offers to the market: as a number of banks have noted, while approval timeframes may have lengthened and maximum loan amounts reduced, neither approval rates nor loan sizes have materially declined.”

Lenders well placed to handle market downturn

Mr Byres noted that property markets in Sydney and Melbourne are falling after a long period of rapid growth, while some other capitals are experiencing a gentler downturn.

He said that APRA had worked hard in recent years, particularly in 2015-17, to make sure that lenders were in a position to manage the “inevitable softening” of the market.

“The sounder lending standards and robust capital positions that have been put in place in recent years have positioned the banking system to withstand the adjustment process,” he said.

“As we have said on many occasions, sound lending standards need to be applied through the cycle, regardless of whether housing prices are rising, falling or moving sideways.”

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Home loans spanning 40 years are offered by select lenders, though the loan period is much longer than a standard 30-year home loan. You're more likely to find a maximum of 35 years, such as is the case with Teacher’s Mutual Bank

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Even though these lengthier loans 35 to 40 year loans do exist on the market, they are not overwhelmingly popular, as the extra interest you pay compared to a 30-year loan can be over $100,000 or more.

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Also known as a construction home loan, a building in course of erection (BICOE) loan loan allows you to draw down funds as a building project advances in order to pay the builders. This option is available on selected variable rate loans.

How will Real Time Ratings help me find a new home loan?

The home loan market is complex. With almost 4,000 different loans on offer, it’s becoming increasingly difficult to work out which loans work for you.

That’s where Real Time RatingsTM can help. Our system automatically filters out loans that don’t fit your requirements and ranks the remaining loans based on your individual loan requirements and preferences.

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NAB will then verify all your information and check your credit score, and if the details stack up, you should be given a conditional approval certificate. This certificate stipulates how much money NAB is willing to lend you and is typically valid for 90 days. 

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Why should you trust Real Time Ratings?

Real Time Ratings™ was conceived by a team of data experts who have been analysing trends and behaviour in the home loan market for more than a decade. It was designed purely to meet the evolving needs of home loan customers who wish to merge low cost with flexible features quickly. We believe it fills a glaring gap in the market by frequently re-rating loan products based on the changes lenders make daily.

Real Time Ratings™ is a new idea and will change over time to match the frequently-evolving demands of the market. Some things won’t change though – it will always rate all relevent products in our database and will not be influenced by advertising.

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How much deposit do I need for a home loan from NAB?

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