Trending Financial News 19 August

New Westpac loan rules in effect tomorrow

Westpac has announced new loan rules that come into effect tomorrow for all new Westpac, St George, Bank of Melbourne, and BankSA home loan applications.

The Westpac group is updating and adding new categories to its household expenditure measures to reflect industry guidelines.

Applications for loans that lead to a borrower’s total liability exceeding total income by more over seven times will be reviewed by a credit assessment officer.

All the big banks face court action

Commonwealth Bank, Westpac, National Australia Bank, ANZ Bank, Macquarie Bank and AMP Bank will all face court action from the corporate regulator, the Australian Securities and Investments Commission in coming weeks said ASIC deputy chair Daniel Crennan.

“We will issue proceedings before Christmas,” said Mr Crennan.

ASIC is working on 13 matters referred from the Hayne royal commission into financial services as well as some matters that were used as case studies in the royal commission hearings as well as 39 other matters covered in the commission.

Mr Crennan told The Australian that ASIC was no longer very interested in seeking negotiated ‘enforceable undertakings’ from banks.

“We have little appetite for undertakings which do not come with admissions of guilt”.

Young people live at home, dream of homebuying

60 per cent of young people 18 – 24 years and 70 per cent of those aged 25 – 34 dream of buying their own home according to a new survey from the Australian Housing and Urban Research Institute (AHURI).

66 per cent of adults under 25 live their parents while 20 per cent of people aged 24 – 35 live at home with mum and dad.

John Mohnacheff from Liberty Financial told Australian Broker that many young people may not know that some lenders will help them into the market.

“Many first home buyers may not realise that with custom lenders like Liberty, those with credit blemishes, low deposits or gifted deposits have options.”

Stamp duty bracket creep hits homebuyers

Home buyers are being hit by big stamp duty bills because home prices have risen steeply over the last ten years.

Victoria’s top rate of stamp duty (5.5 per cent) applies to homes with a value of $960,000. When the tax rates were set in 2008 just 6.6 per cent of homes sold for prices over $960,000, now that has risen to 28.4 per cent.

The Victorian state government has increased stamp duty revenue from $2.8 billion to almost $7 billion in ten years, the Herald Sun reported.