Hurry : Only days to go to get a big mortgage

The Sunday Telegraph reports banks are urging first home buyers to take out mortgage applications prior to the Melbourne Cup rate rise next week, so they can secure the biggest possible loans.

A mortgage advisor at NAB’s Surry Hills branch told a Sunday Telegraph Journalist “you will need to hurry to get in before there is another rate increase as that will reduce the amount you can borrow”

In what can only be described as a subprime recipe for disaster, First Home Buyers are being coached into loans so large, they can barely make the repayments now, let along after a rate rise or two.

Meanwhile, Wespac’s chief economist Bill Evans has indicated home owners should expect a 50 basis point rise in the official cash rate on Melbourne Cup Day. He believes the 100 basis point cut at the beginning of the year went too far and now the RBA needs to scramble to get rates back to at least 4 per cent.

The current official cash rate is 3.25%, following a 25 basis point rise last month making Australia the first country in the developed world to increase rates.

Official ABS House Price Indices are due to be released on Monday.

» First-home buyers urged to beat rate rise – The Sunday Telegraph, October 25th 2009.

» Rates could spike above expectations – The ABC, 30th October 2009.