» No Guarantee of Lower Mortgages

There is no guarantee that mortgage rates will decrease in the near future, there is no concrete way that interest rates will go down due to the banking reforms that the government will introduce. Interest rates are set by the Reserve Bank of Australia and other aspects, aside from government reform, can come into play when interest rates are determined.

The banking reforms were introduced by Treasurer Wayne Swan and they were geared to make the non-banking sector more competitive against the major Australian banks which can keep mortgage rates low. The reforms include the cancellation on mortgage exit fees and the monitoring of rate adjustments by the big four banks.

Competition can bring prices lower and the market’s liquidity can improve. On the other hand, Swan is happy about the support for the reforms from the community especially the smaller lenders and non-banking lenders. However, the situation of the global economy can cancel out the reforms that will be made.

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