May 16, 2020
What’s worse than the media when it comes to gossiping about what the banks are doing?
The good old stand around ‘av a chat Aussie BBQ!
I tell you, some of the wildest rumours I hear about the Australian lending landscape are simply a case of Chinese whispers.
So here is the official low down about current lending conditions…
Are lenders still lending?
Yes, absolutely, and we are busier than ever.
What about Job-Keeper – aren’t people on this basically stuffed?
No, we have three lenders on panel accepting job-keeper at normal rates, so no issues there.
What about the self-employed – are they impacted?
Some lenders want the latest BAS, just to prove things are still going ahead, but plenty of them have no change to policy whatsoever. Some are asking for a lot more proof, others didn’t change.
What about people on wages who are NOT impacted – are they in trouble?
Lenders that used to accept payslips 60 days old have clawed back to wanting payslips under 30 or 14 days old, to check no change to their conditions, but that seems fair to us, nothing too crazy.
What about things like the interest rates – what’s happening?
Well, we are seeing the lowest rates on record, it’s a good time to check you aren’t paying too much. Fixed rates are far lower than variable if you wish to punt on the market, be aware of the risks however.
So who is it hardest for, tell me the goss?
Ok so there are some touchy spots for certain types of clients at certain lenders, and we know how to avoid those, or at least how to assist with them. With some lenders, it’s a matter of submitting a simple Covid-19 impact statement to show how Covid-19 has impacted on you as a business owner. With others there is NO change. Lastly, many lenders and clients have not issued changes to their current policy. It’s really not much to write home about. If you hear something at a BBQ (now that you can have them) perhaps direct them to us, we know what to do.
Are Australian banks good?
Australia has a AAA- credit rating with Standard & Poors, and AAA with Moody’s. That is stronger than the United States or China. In fact, it’s 11th in the world. I kid you not, all the red tape, (particularly that added since the Global Financial Crisis) really does put us in good stead. Click here for credit ratings of countries. We are now such a regulated industry that it feels almost straight jacket – like and this is why you almost need to provide your DNA sequence to get a loan approval! Second tier lenders are feeling the global credit pinch though, so we have seen some tightening in their rates and discretionary (negotiated) rates.
So… where to from here?
Really you have to focus on what you can control.
- Are your interest rates good?
- Are you covered if you fall ill or have an accident?
- Have you got insurance?
- Have you got a longer term financial plan?
- Are you minimising your taxes?
- Have you got the best team around you?
There is so much you can do! This crisis really is the litmus test – are we REALLY doing all we can?
If you can accurately tell me what your interest rate is TODAY, what your income protection cover is PER MONTH, and when you are going to retire and with what income. Then YES you are on track!
So …. there you have it! Your straight shooting, jargon free, non-gossip-like analysis of current lending conditions.