One of Australia's biggest mortgage insurers QBE LMI, is confident that despite expected interest rate hikes and rising unemployment, we will not see large scale defaults.
The report, released today, stated that lower LVRs mean first home buyers are "more likely to borrow within their means". "Moreover, with the [first home owners grants] likely to form the entire 5% of the purchase price, or in some cases the total 10% deposit, there is also a requirement by many lenders and lenders' mortgage insurers for purchasers to demonstrate genuine savings of 5% of purchase price to ensure that some of their own money is also at risk in the purchase."
The report also found that the average loan to first home buyers has increased from $264,500 in October 2008 to $280,600 in February 2009.
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