The unchanged rate brings some good and bad news for brokers
The RBA announced yesterday (4 April) it is keeping the cash rate at 1.50%. This marked the 18th consecutive meeting where the rate has remained constant, since August 2016.
A stronger global economy over the past year, growth in a number of advanced economies, low unemployment rate, and a low global inflation outlook are some key reasons behind the April rate, RBA governor Philip Lowe said in a statement yesterday. He also cited the slowing housing market in Sydney and Melbourne, with prices experiencing decline in some areas.
The latest economic sentiment tracker from Finder.com.au has determined household debt is the number one area of concern for 55% of its 32 expert survey panellists. Likewise, 56% of them said they think up to two rate rises could put riskier borrowers into financial trouble.
"Mortgage repayments are king of household debt, but other costs like personal loans and credit cards also comprise a large chunk of household debt — and they roll in like clockwork," Finder.com.au insights manager Graham Cooke said in a statement.
Nearly 53% of brokers said they noticed a drop in the total number of loan approvals in 2018, compared to last year, likely as a result of the banks tightening their credit policies.
Fifty-four percent of brokers said that the recent negative attention the industry has faced as a result of the royal commission have not had a significant impact in their business so far, with 36% unsure if it has.
However, the royal commission has prompted 14% of brokers to review the viability of their business based on commentary regarding changes to commission structures, with 90% of those reviewing changes to both upfront and trail.
"It is important to acknowledge that mortgage brokers have been the key driver of delivering competition to a $1.7trn industry, which previously was heavily concentrated to the majors," HashChing COO Siobhan Hayden said.
