Powered by MOMENTUM MEDIA
SUBSCRIBE TO OUR NEWSLETTER SIGN UP
Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Rate hikes ‘normal’, says former MFAA chief

Francesca Krakue 4 minute read

The former CEO of the Mortgage & Finance Association of Australia has suggested that the recent rise in fixed-rate mortgages is a “normal characteristic” of the market.

Siobhan Hayden, the former chief executive officer of the MFAA and now adviser at HashChing, said that lenders’ recent decisions to make “small, moderate corrections” to their fixed rates is “a normal response to changes in funding costs”.

“Lenders need to constantly recalibrate their risk and pricing structures for these products, and I don’t think there’s anything untoward happening,” Ms Hayden added.

She pointed out that in January this year, wholesale funding costs rose for the big banks due to global financial market turbulence, which in turn had a direct impact on rates offered to customers.

Advertisement
Advertisement

“In May, we saw a slight correction in the global debt markets which improved rates,” she elaborated. “Recent changes to fixed rate loans is a direct result of international funding turbulence and market uncertainty. Australian lenders source a large proportion of their wholesale funding internationally and these funds are subject to cyclical and market change.”

Ms Hayden said that the changes to fixed rates this year demonstrate that the costs involved with providing fixed rates over the coming years is slightly increasing.

“Is this rise based solely on Donald Trump being elected? I would say no. The source of funding is based on a level of uncertainty, and there are multiple drivers of that. Trump may well be just one of the components that is driving the uncertainty,” she said.

“It’s at times like these that consumers need to ensure they are receiving a competitive rate with their current lender,” she concluded.

[Related: Home loan rate cuts diverge from RBA hold]

PROMOTED CONTENT


Rate hikes ‘normal’, says former MFAA chief
default
TheAdviser logo

The not-to-be-missed Accountants Daily Strategy Day will travel through Melbourne and Sydney in August to equip accounting professionals with the latest industry updates and tips for modern practice management as well as the latest cutting-edge technology, processes, strategies and trends shaping the future of accounting. Visit the website for more information: www.accountantsdaily.com.au/strategy-day

default

 

more from the adviser
Greater Bank Newcastle Perm merger

Breaking News

Two banks announce intention to merge

Two large customer-owned banks have announced that they are inten...

Paul Herbert AMP Newsroom

Breaking News

AMP hires intermediary head

AMP Bank has recruited from MyState for its new head of intermedi...

Theo and Alex Shore Financial

Breaking News

Brokerage officially launches white-label loan

North Sydney-based brokerage Shore Financial has officially launc...