There’s nowhere to hide.

It doesn’t matter what Federal Treasurer Wayne Swan says, does or for that matter, what colour he turns, funding costs are what they are and even relatively safe, well capitalised Australian financial institutions are simply paying higher margins to obtain funds and they are passing it on.

When will it end? Not even PB16 reflecting on Australian cuisine from his retreat out at Kenthurst can tell us that but we’ll have a go. Read more

Some fantastic news to kick off the financial year!!

Low doc commercial property loan to $1,000,000

· Available for individual and non-personal borrowing entities (Pty Ltd or Discretionary Trust).

· ABN registered for at least 24 months.

· GST registered for at least 12 months

· Line of credit capped at $500K (maximum loan amount- can mix products to obtain $1M total loan)

· Same rates as fully documented loans

· 6 months trading statements are required (previously 1 month) Read more

As fearlessly, or recklessly, predicted, variables rates have continued to settle down with both the 30 day and 90 day rates dropping slightly again this week to be placed at 7.6617% and 7.8167% respectively. Read more

Just when you thought it was safe to go back in the water (cue the Jaws music), interest rates have risen sharply in recent days on a tide of veritable economic woe.

We even have some economists reviving Paul Keating’s infamous “Banana Republic” warning amidst stronger than expected economic growth, rampant oil prices and signs of inflation becoming entrenched, perhaps even verging on stagflation. Well hold my elephant gun Minnie, the sky hasn’t fallen in just yet. Has it? Expect some normality and stability to resume over coming days. Read more

Variable rates held steady again this week with both the 30 Day and 90 Day rates tightening a fraction to now sit at 7.5700% and 7.7717% respectively. There certainly seems to be a greater stability surrounding the bank lending rates in recent times but the gap between these and the official cash rate remains stubbornly high. Read more

Rates have come down fractionally this week with the 30 day rate now in to 7.5833% and the 90 day rate tightening to 7.7867%. Fixed rates over 1-5 years continued to fall and are down by 0.14%-0.29% to range between 7.29% and 7.73%.

John Stewart, CEO of NAB, commented last Friday that he believed, on balance, further rate rises by his bank by greater than further official rate movements looks unlikely. This is an interesting statement and suggests NAB has formed the view that credit markets have become more stable with the bank cost of funds now more predictable.

What Do We Mean By Rollover Risk?

A commercial lender we represent offers commercial property borrowers a loan for a 25 year term. Borrowers can elect to take the first few years as interest only, which most tend to do.

Most other commercial lenders offer short term, interest only, loans. These loans require repayment or re-negotiation at the end of the term, which is usually 3 or 5 years.

The “Rollover Risk” applies to borrowers who have a short term loan reaching maturity. The borrower faces the following uncertainties: Read more