CBA hikes 0.30%

[ROE]

Everyone should write to the bank and said take one rate hike for the team
(your customers) go on do it , go on do it for the team.

or better yet go to the branch and do it

 

[Bill M]

As I said before the CBA is no worse than the others and as a shareholder I think they are doing as required. Nothing is for free, if you borrow you must pay. If you over commit yourself then you must sell or cut down on your not important spending, it isn't rocket science. If you can not afford to borrow then don't do it.

 

[MS+Tradesim]

As I said before the CBA is no worse than the others and as a shareholder I think they are doing as required. Nothing is for free, if you borrow you must pay. If you over commit yourself then you must sell or cut down on your not important spending, it isn't rocket science. If you can not afford to borrow then don't do it.

So the customers have to pay to help the banks dig themselves out of the hole they jumped into in the first place by lowering lending standards and investing greedily into ridiculous debt-backed derivatives? Yep, let's just go ahead and socialise every moral hazard as long as management still get their large payrises and bonuses.

 

[numbercruncher]

Someone should start " The Bank Run Club "

Get a million members and start dictating the terms.

 

[ithatheekret]

http://www.scopical.com.au/articles/BusinessandFinance/2503/Commonwealth_first_to_hike_loan_rates

Im guessing was just a typo, but thought I better clear that up for folks, probably another rise next month ? to make it 9.27

Yep t'was , taa much for that .

I'm (excuse the pun ) safe as houses , don't have a mortgage , thought about it , but we bought outright , thinking I was smart now .

I was contemplating using the cash to bolster investment portfolio , but just the thought of owing money gave me the jitters . Problem I have , if I owe money I tend to struggle sleeping till the debt is cleared .In fact I go all out to get rid of it . Had to borrow for eldest daughters Uni fees etc. got that thorn out of my side last year ( the loan that is ) .

 

[Bill M]

So the customers have to pay to help the banks dig themselves out of the hole they jumped into in the first place by lowering lending standards and investing greedily into ridiculous debt-backed derivatives? Yep, let's just go ahead and socialise every moral hazard as long as management still get their large payrises and bonuses.

The customers took a variable home loan on the risk that they were going to pay less in the near term and weren't worried about the long term. If they had took a fixed term for 5 years at 6% in the beginning then they would be better off now.

If anyone in this world doesn't calculate interest rate increases into their mortgage repayments then I have no sympathy for them, it was always going to happen. The excuses for rates going up is not important, it is the planing you do before hand that is important.

 

[BradK]

I only have around $215,000 home loan - so, that is not much. Most of my friends have around the $350,000 mark.

I would be able uncomfortable at interest rates past 10 per cent - but, I have no credit card, personal loan, or consumer debt.

Its not the mortage that tips you over. Its the extras - the GE card, the Visa, the car loan... and suddenly. Whamo.

Still gotta feel it for the battlers.

Cheers
Brad

 

[MS+Tradesim]

The customers took a variable home loan on the risk that they were going to pay less in the near term and weren't worried about the long term. If they had took a fixed term for 5 years at 6% in the beginning then they would be better off now.

If anyone in this world doesn't calculate interest rate increases into their mortgage repayments then I have no sympathy for them, it was always going to happen. The excuses for rates going up is not important, it is the planing you do before hand that is important.

I only agree to a certain extent. Yes, people should be responsible for making sound financial decisions about their own affairs. But banks should be more responsible to their shareholders by doing better due diligence on loan applicants. Also, they should not have been gambling in junk derivatives. The customers should not be forced to pay for the bank's greed, incompetence and/or duplicity.

 

[Judd]

I only agree to a certain extent. Yes, people should be responsible for making sound financial decisions about their own affairs. But banks should be more responsible to their shareholders by doing better due diligence on loan applicants. Also, they should not have been gambling in junk derivatives. The customers should not be forced to pay for the bank's greed, incompetence and/or duplicity.

Please prove that the major banks in Australia have been gambling in junk derivatives and that they are guilty of greed, incompetence and/or duplicity. I don't hold any bank shares by the way. Just would like to see your evidence.

And just to make everybody very happy, here is a graph of home loan interest rates over the years since 1959.

Seems pretty much tied to economic conditions.

And just to make us all very thankful that we are not dealing in grain in around 700BC there is a tablet at the Metropolitan Museum of Art in New York recording an eight month grain loan at 50% - and annualised rate of 75%.

 

[Mofra]

So the customers have to pay to help the banks dig themselves out of the hole they jumped into in the first place by lowering lending standards and investing greedily into ridiculous debt-backed derivatives? Yep, let's just go ahead and socialise every moral hazard as long as management still get their large payrises and bonuses.

Please explain how the CBA has been complicit in the US lowering of credit standards which is the major cause of the credit squeeze?

If the US had the same standards as Australian lenders I doubt we'd be in this situation.

 

[Smurf1976]

1. You called yourself a superfund bank, dont you source most of your fund from superannuation? so what is sub-prime fallout funding cost got anything to do with ME accessing its money?

Markets are made at the margin. If some of the money needed to finance loans has to be accessed from overseas markets etc then that increases the value of ALL money being used for that purpose regardless of its source.

If it was your super being used to fund the loans then you'd expect to be gaining the benefit of rising rates.

 

[MS+Tradesim]

Mofra and Judd - think as you wish. I know some interesting info and you can disregard whatever you like if it makes you feel better about the banks.

 

[Judd]

EDIT: Nor do I feel any need to provide evidence. My source works in a major and knows some inner problems. I am not prepared to divulge any such information in this forum. You (Mofra and Judd) can disregard that in any way you see fit that makes you feel better about their activities.

No probs, bro. My old man knew a bloke, who knew a bloke who worked for the CIA and that man knows the true story behind the Grassy Knoll.

PS: I beat your edit LOL

 

[MS+Tradesim]

No probs, bro. My old man knew a bloke, who knew a bloke who worked for the CIA and that man knows the true story behind the Grassy Knoll.

Exactly why I changed my response. I am not prepared to go into any detail and you can discount that however you like. You reaction, however, has no relevance whatsoever to what I know. I expected such childish responses.

 

[Smurf1976]

The customers took a variable home loan on the risk that they were going to pay less in the near term and weren't worried about the long term. If they had took a fixed term for 5 years at 6% in the beginning then they would be better off now.

If anyone in this world doesn't calculate interest rate increases into their mortgage repayments then I have no sympathy for them, it was always going to happen. The excuses for rates going up is not important, it is the planing you do before hand that is important.

Hit the nail on the head there. A variable rate mortgage is speculating on future interest rates whether borrowers acknowledge it or not. Don't speculate if you aren't prepared for rates to move in BOTH directions - down AND UP.

Some may point to certain politicians harping on about low rates over the past few years. Anyone who puts their faith in politicians to tell the truth is either incredibly naive or stupid.

It's like looking at the weather or anything else that is variable and able to be predicted only over the very short term. If the temperature in, say, Adelaide is anywhere between 0 and 48 then that's within the normally expected range. If you're too hot or cold then you should have bought warmer clothes, an air-conditioner, heater or whatever but you can't say it's unexpected whilst it's within the historic range of recorded temperatures. Only if it goes significantly outside the historic range, either above 50 or well below zero in this example, do you have ANY excuse for not being prepared.

Likewise you know that cars can break down, flights can be cancelled, the power supply can be disrupted, your hot water tank could blow up, mobile phones aren't certain to always work, nightclubs refuse entry for no obvious reason, milk goes off before the use by date, rats find their way into the bed, concert tickets sell out in minutes and so on. All little challenges in life but NONE of these are unexpected as we all know they happen from time to time and that situation isn't likely to change.

Interest rates at the moment are well within historic norms and are nowhere near the upper limits of what can, judging by history, be expected. Actual rates aren't high and the rate of change hasn't been overly fast. Thus there's no excuse to not be prepared.

 

[Mofra]

Mofra and Judd - think as you wish. I know some interesting info and you can disregard whatever you like if it makes you feel better about the banks.

You haven't actually provided any info.
Are you honestly going to argue that Australian & US lending standards are the same? They are barely even similar!

Eg. Australian Low Docs are almost always limited to 80% & Metro postcodes only (without limit restruictions), no NINJA loans, Low Start loans are virtually non-existant and non-genuine savings loans must be CRAA clear.

Credit quality in Australia is miles ahead of the US market.

 

[Judd]

The customers took a variable home loan on the risk that they were going to pay less in the near term and weren't worried about the long term. If they had took a fixed term for 5 years at 6% in the beginning then they would be better off now.

If anyone in this world doesn't calculate interest rate increases into their mortgage repayments then I have no sympathy for them, it was always going to happen. The excuses for rates going up is not important, it is the planing you do before hand that is important.

A bit of thread drift here.

Have the fixed rate borrowers who may now be coming out of the 5 year fixed mentally prepared, or capable, of accommodating the higher repayments? They have been used to repayments based on 6% and now they are facing repayments based on around 8.5% to 9%. Should be interesting. Suppose it depends on how they originally structured their repayments.

 

[numbercruncher]

A bit of thread drift here.

Have the fixed rate borrowers who may now be coming out of the 5 year fixed mentally prepared, or capable, of accommodating the higher repayments? They have been used to repayments based on 6% and now they are facing repayments based on around 8.5% to 9%. Should be interesting. Suppose it depends on how they originally structured their repayments.

Very good point, I wonder how many mortgages are facing this ?

The US ARM resets that ended in carnage reset by an average of 2.5pc higher

But on the flip side with house prices seemingly still holding here, people with Homes/Mortgages originating 5 years ago should see significant equity in there properties.

 

[MS+Tradesim]

You haven't actually provided any info.

Yes, because I know some interesting internal stuff and I'm not about to spread it over this forum. Believe as you will. I'm not trying to change anybody's mind. Just don't be so naive as to think the banks have it together.

 

[Mofra]

Yes, because I know some interesting internal stuff and I'm not about to spread it over this forum. Believe as you will. I'm not trying to change anybody's mind. Just don't be so naive as to think the banks have it together.

Given I have worked in the banking & finance industry for the majority of my adult life, I am fully aware of the errors some banks & lenders make in their margin calculations & market reactions. The margins all lenders are adding now are due to treasury costs of sourcing funds - to assume that one lender has made a mistake when every lender on the planet is having problems scraping together their MBS/CDO offerings at a decent funding rate is ridiculous.

I doubt you actually know any "interesting info" as you have not posted as scerrick of this info (nobody is interested in a source of non-existant info so I don;' think you have anyhting to be worried about)