The recent Royal Commission into the banking and financial services is set to shake up the industry and impact on borrowers’ applying for loans now, and into the future, reports JR Mortgage Broker and Finance.

One of the major focus areas to come from the commission is personal living expenses. Living expenses are broken down into a number of different categories.  They include Child Care, Education, Clothing & Personal Care, Groceries, Insurances, Investment Property Utilities, Medical & Health Costs, Owner Occupied property costs, Recreation and Entertainment, Telephone & Other Communication Services, Transport and Rent/Board. As a result, mortgage brokers must now scrutinise 3 months’ worth of bank and credit card statements and obtain monthly averages of the above-mentioned categories.

‘Recreation & Entertainment’ is the biggest area of concern for lenders at the moment. Getting regular food deliveries (which we all know is getting all too easy these days!) will not help your case, especially in the 3 months leading up to your loan application. All lenders will be taking a long hard look into these type of expenses.

Managing Director of JR Mortgage Broker & Finance, Julie Rashleigh says another key element that loan assessors will be targeting is recurring expenses of any type, such as post-payment schemes such as Afterpay or the alike.

“You can’t go to a lender and say that your living expenses will be curtailed once you purchase a property – you need to demonstrate to any lender that your spending and budgeting is evident now.”

Deposits Required

Investment Purchases

The minimum deposit required for the purchase of all inner-city apartments is between 20% and 30%, depending on the lender and the actual complex.  Some lenders will do to a maximum of 80% but require Lenders Mortgage Insurance (LMI) above 70%.

Owner Occupied Purchases

Again, the minimum deposit is usually between 20% and 30%.  However, we do have a lender that will do to 95% Including LMI.

Current Interest Rates

Investment Loans

Interest Only Repayments

Variable Rates range between 4.39% to around 5.00%

2 Year Fixed Rates range between 4.15% to around 5.37%

Principal & Interest Repayments

Variable rates range between 3.99% to around 5.00%

2 Year Fixed Rates range between 3.95% to around 4.94%

Owner-Occupied Loans

Variable rates range between 3.72% to around 4.92%

Please email Julie Rashleigh on  julie@jrmbf.com.au with any questions you may have in regards to your finance choices.