The property price caps in each state have been revealed for the federal government’s new first home buyer scheme. Read on to find out the maximum value of a property you can purchase under the scheme.

Imagine buying your first home with a 5% deposit and not having to pay lenders mortgage insurance (LMI).

Sounds good, right?

Well, the federal government has finally revealed more details in a draft mandate for the scheme, including the property price caps in each state. (more…)

Are you paid weekly, fortnightly or monthly? New research indicates that how often you’re paid has a pretty big bearing on whether you’re a saver or a spender.

The research, conducted by small business platform Xero, shows that Aussies who receive their salaries weekly are more likely to splash their hard-earned cash than those who are paid monthly due to a term they’ve dubbed ‘payphoria’.

This, in turn, can play a big part when it comes to your ability to save for a home loan deposit.

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Got a large, overdue tax debt with the Australian Tax Office (ATO)? Then best listen up, because certain tax debt information can now be reported to credit reporting bureaus (CRBs).

A new Australian law means the ATO will be able to disclose the tax debt information of a business to CRBs when certain criteria are met.

What does that criteria include?

The ATO will only disclose tax debt information if the business meets all of the following criteria:

– it has an Australian business number (ABN), and is not an excluded entity

– it has one or more tax debts, of which more than $100,000 is overdue by more than 90 days

– it is not effectively engaging with the ATO to manage its tax debt, and

– the Inspector-General of Taxation is not considering an ongoing complaint about the proposed reporting of the entity’s tax debt information. (more…)

You know that infuriating habit the big banks have of failing to pass on the RBA’s cash rate cuts in full? Well, it’s finally triggered the federal government to order an inquiry into home loan pricing.

The inquiry, which is being conducted by the Australian Competition and Consumer Commission (ACCC), comes just weeks after the Reserve Bank of Australia (RBA) slashed the official cash rate by 25 basis points for the third time this year to a record new low of 0.75%.

What really drew the ire of the public and politicians alike, however, was that the big banks only passed on between 0.13% and 0.15% (out of 0.25%) of the latest RBA cut to customers.

This is after they only passed on 0.40% to 0.44% (out of 0.50%) for the previous two RBA cuts. (more…)

The ‘pendulum may have swung a bit too far’ when it comes to the tight lending standards currently imposed on small businesses, says the Reserve Bank of Australia (RBA).

Since the RBA cut the official cash rate to a new record low of 0.75% on Tuesday, most of the attention has been on whether the banks would pass the full 25 basis point cut to home loan customers (spoiler: the big four banks only passed on 0.13-0.15%).

As such, several pointed remarks made by RBA Governor Philip Lowe in regards to lenders’ “tight” lending standards imposed on SMEs have flown under the radar.

(more…)

The Reserve Bank of Australia (RBA) has cut the official cash rate by 25 basis points to a new record low of 0.75%. But will the banks pass on the interest rate cut in full to you?

RBA Governor Philip Lowe said this third rate cut in five monetary policy meetings was made to support employment and income growth.

“The Board also took account of the forces leading to the trend to lower interest rates globally and the effects this trend is having on the Australian economy and inflation outcomes,” he said in a statement.

“It is reasonable to expect that an extended period of low interest rates will be required in Australia to reach full employment and achieve the inflation target.”

The RBA previously cut the official cash rate on July 2, just one month after making its first rate cut in almost three years (since August 2016). (more…)

Three-in-five prospective first home buyers intend to buy soon with a smaller deposit, rather than wait until they have saved a 20% deposit. So how do they plan on doing so?

It usually takes between seven to 14 years for first home buyers to save a 20% first home deposit, according to a new report by Genworth on recent and prospective first home buyers (FHBs).

With that in mind, it’s no wonder that 59% of prospective FHBs are eagerly exploring their options to buy now in the current market, rather than risk waiting until house prices rise.

Indeed, about two-thirds of recent and prospective FHBs are of the opinion that property prices will stabilise or increase over the next 12 months.

So what options are available for prospective FHBs with a deposit of less than 20%?

(more…)

More than one-in-five SMEs are having cash flow problems due to business loans being rejected, according to new research.

The report, by market analysis firm East & Partners on behalf of Scottish Pacific, also shows just one in 10 SMEs believe they are on top of their cash flow.

One of the main culprits?

More than one-in-five business owners cite being rejected from a lending product as the main reason for their cash flow issues, the report states, and a similar proportion of SMEs were unable to take on new work because of these cash flow problems.

“[This] is a massive wake up call to SMEs and their advisors to make sure they are funding their business in a way that optimises cash flow,” says Scottish Pacific CEO Peter Langham.

“A business struggling with cash flow can only stretch working capital so far before something has to give.”

(more…)

Imagine buying your first home with only a 5% deposit and not having to pay lenders mortgage insurance (LMI). Well, that dream is one step closer to reality after the government introduced legislation to implement the First Home Loan Deposit Scheme.

Currently, people with a deposit of less than 20% usually have to pay LMI.

But under the scheme, some first home buyers will be able to borrow up to 95% of the value of their property without forking out for LMI.

The result: first home buyers stand to save up to $10,000 in LMI, allowing them to enter the property market earlier than they would have otherwise.

Now, the scheme is due to commence on 1 January 2020.

But here’s the catch: it’s limited to just 10,000 first home buyer loans each year.

That number is less than 10% of the 110,000 Australians who bought their first home in 2018.

(more…)

Lending to Aussie households spiked 3.9% in July, the strongest growth seen since October 2014, according to the Australian Bureau of Statistics (ABS).

The bumper month follows a 1.9% rise in June 2019, suggesting the tide has finally started to turn in the lending market.

“Whoa. Quite the surge in housing credit in July,” remarked CoreLogic’s head of research Tim Lawless, “haven’t seen numbers like this since 2015/16”.

Lending for investors rose 4.7% in July with rises across all states and territories, while lending to owner-occupiers also recorded substantial gains at 5.3%.

Meanwhile, home loans to first home buyers rose 1.3% in July. This is the fourth consecutive month of growth for this segment.

(more…)