Flagship product range, the Flexi Options Loan

Over the past few weeks, Resi has been focused on spreading the message about their Renew/Restart range which is their Pepper funded specialist lending range.

Their unique pricing proposition with competitive rates along with their special low entry costs have allowed the network to introduce specialist lending into their potential solutions for their clients. However, Resi thought it was timely to remind everyone of their flagship product range, the Flexi Options loan.

Flexi Options be it for Owner-Occupied or Investors provides some great long-term value for your clients.

For Owner-occupied, Resi offers the following rates with no on-going fees (unless an offset account is selected which comes at a cost of $10 per month).

Flexi Options

LVR < 80%

80% < LVR < 90%*

P&I variable owner-occupied

3.79%

4.06%

* LMI can be capitalised on top of the loan amount

In terms of loans to investors, this is where Resi really stand out from the pack, no matter your scenario, we have you covered with a very competitive offer. Principal and Interest (P&I variable investor) remains the more popular option, with sharper rates available. Resi's rates represent a good value no matter how long your client wants to stay with them.

Flexi Options

LVR < 80%

80% < LVR < 90%*

P&I variable investor

3.99%

4.26%

* LMI can be capitalised on top of the loan amount.

If cash flow is a priority for your client and Interest Only is still on the top of their list, while the rates are a little higher, Resi's Interest Only rate (not a honeymoon rate) is among the best in the market.

Once the Interest Only period expires Resi will help your clients by reviewing the rate back to a P&I price point at the time. Resi also offer Interest Only investment right up to a 90% LVR!

Flexi Options

LVR < 80%

80% < LVR < 90%*

Interest Only variable investor

4.39%

4.79%

* 90% hard cap for Interest Only lending.

Resi has some competitive rates for owner-occupied lending, so if you have an investor that needs to release equity from an Owner-Occupied property Resi has you covered there as well.

Rates are also available for construction and even bridging finance (fees apply). Make sure you reach out to the team to discuss your next scenario!

Download Rate Sheet Here

Jason Hulbert - Relationship Manager
E: Jason.Hulbert@resi.com.au
P: 0468 755 419

Tony Wakim - Relationship Manager
E: Tony.Wakim@resi.com.au
P: 0416 409 100

Craig Herden - Relationship Manager
E: Craig.Herden@resi.com.au
P: 0478 537 841

Or e-mail our scenarios team on brokersupport@resi.com.au

Can Shorten and Bowen have a

By Peter Switzer
Published: Monday, February 11 2019

Over the weekend, Treasurer Josh Frydenberg tweeted about the failure of the Labor Party to give an official reaction to the Hayne Royal Commission recommendations. It's not clear what this delay means but it could actually be bad news for the Coalition if the Opposition, which looks like a shoo-in to win the May 18 poll, is actually stopping and thinking about what its policy response will be!

If we must have a Labor government, let's hope it's of a Hawke-Keating ilk, rather than the failed Rudd-Gillard-Rudd show. Bill Shorten and Chris Bowen (his would-be Treasurer) had me worried when they were saying that they would be implementing the recommendations of the RC even without seeing them.

Two weeks ago, a Labor-inclined tweeter piled into one of my twitter debates, even though we weren't arguing over the RC, asking: "Why would anyone even question or want to change any of the Hayne recommendations?"

I wanted to tweet but it was Friday afternoon (close to the nation's happy hour, when frustrated political commentators are on the prowl), so I just let that twit/question go through to the keeper.

I reckon 20,000 mortgage brokers might have an answer to that question and it might be summed up as RC's make recommendations but politicians make policies based on their good or well-meaning ideas but they might have practical and implementation issues.

Also, great law minds aren't always great economic or business minds so discussion, debate and expert opinions are required before politicians support an RC recommendation.

I like the idea that a future Labor government might be a thinking government and I hope that's what Bill and Chris are up to. Their decision on mortgage broking will be their first test.

Their second test will be about the timing of their changes to negative gearing and the reduction in the capital gains tax discount.

Chasing investors out of the housing market as some property prophets of doom are tipping 30% house price slumps in Sydney and Melbourne, doesn't look like smart economics. I think these forecasters are crazy but if we add negative gearing changes to a weakening housing market, just as the RBA is expecting a slowing Aussie economy, then hitting the two strongest and biggest economies in NSW and Victoria, wouldn't look like smart economy-navigation from a future Labor government.

And what if a US stock market slide happens over 2019 or maybe 2020 and a Labor government has reduced the capital gains discount and chased retirees out of the stock market by denying them tax refunds? We could see a policy-created economic pickle.

Remember, the housing price boom was RBA-created via historically low interest rates, while the house price slide lately wasn't just a demand, supply and excessive prices issue but it was helped by APRA, the RBA and Royal Commission influences.

Opposition leaders often throw caution to the wind in discrediting their Government foes and Bill Shorten is on a roll in that department. But eventually he will have to embrace a leader 'for all Aussies' stance. We saw it with Bob Hawke and Paul Keating when they signed up for deregulation of the dollar, the financial system and other over-protected industries. I remember doing an editorial on Triple M, in the old Doug Mulray show, where I paralleled the change of attitude of the then-PM and his Treasurer to that Bible story of Transfiguration.

The promotion from Opposition leader to PM comes with responsibilities and insights and like the disciples who went up the mountain with Jesus, they should become more knowing and insightful. Well, that's the hope and I'm hoping Bill and Chris are practising being transfigured!

The last poll of 2018 on December 10 had Labor with a 10-point lead over the Government. On 2GB, Labor stalwart Graham Richardson said it was all over, telling listeners that "people have stopped believing in miracles". His jousting rival, News Ltd's Andrew Bolt agreed that the new Morrison Government was doomed.

"They hoped that Scott Morrison might've pulled a rabbit out of the hat. He might've if they'd given him the chance but you see how Malcolm Turnbull has done his best to destroy his chances."

The only bright spot for the Coalition was that ScoMo was preferred PM but Bill Shorten never seems to be able to win that 'beauty contest!'

Fast-forward to the first Newspoll of 2019 and low and behold, some good news for ScoMo. This is how news.com.au reported it: "This week's Newspoll, conducted January 24-27 from a sample of 1,630, gave Labor a 53-47 lead, a two-point gain for the Coalition since the last Newspoll in early December. Primary votes were 38% Labor (down three), 37% Coalition (up two), 9% Greens (steady) and 6% One Nation (down one). This is the equal closest Newspoll result since Scott Morrison replaced Malcolm Turnbull as PM."

Coalition voters are impressed with Scott Morrison's campaigning and believe he might have been a good chance, if he'd been in the top job for more than a year. But he still has to live down the revolving door of leaders in the past few years and he has a rival team that looks strongly unified.

Unlike Paul Keating, who won "the sweetest victory of all" election in 1993, Scott Morrison doesn't have an opponent with a 15% GST and I don't think he can get Aussies as scared as they were 26 years with a scare campaign on changes to negative gearing, the capital gains discount and retirees' tax refunds!

Over the years, I've wondered why 4.7 million employees in small business can't be mustered by employers and the Coalition to support them at election time. The simple answer is that many business owners care about their business, they don't relate to policy issues and they are not political with their staff.

The interesting issue for this year's election will be if the Coalition is right that 800,000 retirees will be affected by the tax refund ban. If these Aussies campaign to their families and in particular if they remind their loved ones that Bill and Chris will "shrink your inheritance", then it could be a hip-pocket issue that more voters could get concerned about.

It looks like a plan but if history is any guide, the Coalition hasn't been especially good with PR, unless it was bad PR!

Given that, I'm praying Bill and Chris have a "come to Jesus" moment ASAP.

Actions Taken to Combat the Recent RC Recommendations

Following on from Frank's recent communications, I wanted to update you on what action has been undertaken to combat the recent Royal Commission recommendations and the Government's response

The Royal Commission has signalled changes that could threaten your business. We have been preparing for this since the release of the Interim Report in September 2018, and now it is time to act.

1. Mark Bouris: continues to meet with Government and Opposition leaders, including media appearances. We will continue to leverage Mark's connections on both sides of politics to ensure we communicate the importance of the mortgage broker to the consumer. If you haven't yet had the chance to hear Mark's interview on 2GB discussing what impact the Royal Commission Recommendations may have on the mortgage broker industry, small business owners and the consumers. Listen to the full interview here Please think about passing this on through your social media.

2. FBAA campaign using lobbyists: We have contributed to and are working with the FBAA on engaging several lobbyists. They will 'open key doors' that cannot otherwise be open. This strategy is critical if we are to maximise the opportunity and ensure we don't have politicians saying things to get elected, and then do the complete opposite post being elected or keep us all feeling good about ourselves only to find out they are knifing us regardless.

3. MFAA campaign above the line & petition:

We are also been involved with the MFAA and will become more deeply as we move forward. You may not see our logos initially but they will begin to appear in further media including TV commercials. Please click here to see the MFAA media release.

For the last few months, we've been working with the MFAA on the 'Don't Kill Competition' campaign, an integrated national campaign of public relations, government advocacy, mass media and digital advertising, and grassroots customer activation.

The industry has come together like never before, with aggregators, lenders and other suppliers pooling their resources to fund this campaign, which is designed to utilise the support of everyday consumers and voters to amplify the message intended for decision-makers and politicians.

Over the past three weeks, the MFAA has been working to convince journalists and commentators that a ban on broker commissions would kill competition, reduce access to credit and make getting a home loan harder and more expensive. This PR campaign was aimed at laying the foundation for the larger 'Don't Kill Competition' campaign - it has driven significant positive media coverage and an improved understanding of our industry.

But the real battle begins now. The Royal Commission has recommended policy changes that would greatly damage our industry, and each of us must now take action.

MFAA Industry Defence Campaign - The MFAA launched the defence of the mortgage broking industry, with a national campaign - Don't Kill Competition - designed to show consumers and politicians what a world without mortgage brokers would look like.

The campaign comprises advertising across newspapers, radio, outdoor (billboards), television and digital platforms and is designed to demonstrate that banning commissions would be a great outcome for large lenders with branch networks, but a terrible outcome for everyday Australians.

The campaign kicks off with full-page advertisements in national newspapers (the Australian Financial Review and The Australian), before leading into television and the other outlets over the weekend.

It also features a microsite at www.brokerbehindyou.com.au which has the relevant facts and content for you to share and promote, including pre-populated letters for both brokers and consumers to send to their local MP to show their support - our website will automatically populate an email to your local Federal MP, based on your postcode.

You can use the MFAA material to support the cause by making your voice heard. This means we need all brokers to do four things in the coming week:

1. Take action with your local politician: Contact your Federal MP and let them know how you feel, by going to www.brokerbehindyou.com.au, clicking the link and sending the pre-populated letter to your local MP. This will take you less than one minute and has a significant impact.

2. Get others involved: Talk to your family, friends and your customers and ask them to go to the site and contact their Federal MP as well - there is a separate letter of support designed for consumers to send.

3. Sign and share the petition: There is a petition available at www.brokerbehindyou.com.au please sign and share the petition to ensure policy makers understand the weight of support behind the channel.

4. Share the campaign: Additional campaign advertising collateral will be made available on the MFAA website and can be used to share and promote on your social media platforms daily over the next week and beyond.

Now, more than ever, we must unite as an industry and remind our politicians and policy makers that mortgage brokers are vital for healthy competition in the home lending market, are highly valued by their customers and are out there, every day, driving great outcomes for Australians.

This campaign is going to be a marathon, not a sprint, and as it develops the MFAA will make new resources available which can be used to promote the campaign and activate your customers.

I urge each of you to take the time this week to support this campaign.

What else can you be doing yourself?

1. Look after your book - This is the most valuable asset you have and the longer the book stays post 1st July 2020 the more valuable it will be. Proactively contact your customers, ensure all their needs are being met e.g. Insurances, car finance, additional lending, business lending

2. Social Media - Keep the conversations going. Share, post, tweet, comment or like Mark's radio interview and media appearances

3. Contribute to the MFAA campaign - I will send more detail on how you will be able to help fund an ongoing MFAA campaign. This will enable us to continue the campaign for a longer period of time and more broadly.

4. Talk with your local member and opposition member - As well as using the above MFAA material, I have attached a letter template that you can customise. I have spoken at PD days on how you can explain to your local Federal member on how important you are in the local community and the impact you have. By materially changing the way a broker is compensated for what they do will have unintended consequences.

Here are some additional guides for you to download:

MBIG Report - Broker Cover Letter
MBIG Report - Summary
Posting & Sharing on Social Media

EACH OF US MUST TAKE ACTION NOW!

Clive

MPs slam call to ban upfront commissions

by Charbel Kadib

Coalition government MPs have railed against reforms that would "ride roughshod" over brokers and enhance the power of the big four banks in the mortgage market.

Addressing the House of Representatives following the release of the standing committee on economics' fourth report into its review of the four major banks, Coalition MPs Barnaby Joyce and Ted O'Brien cautioned against the full implementation of the banking royal commission's recommendation to ban commission-based remuneration in the broking industry.

In his final, three-volume report, Commissioner Kenneth Hayne recommended that lenders be prohibited from paying trail commission to mortgage brokers in respect of new loans within about 12 or 18 months, and within a further 12 to 18-month period, prohibited from paying any other commissions to mortgage brokers.

In response, the Morrison government committed to banning trailing commissions from 1 July 2020 but stopped short of removing upfront commission-based payments to brokers, as recommended by Commissioner Hayne.

However, the federal Labor opposition has noted its intention to adopt all 76 recommendations outlined in the banking royal commission's final report, including a complete ban on commissions to brokers and the introduction of a consumer-pays model.

In his address to parliament, Barnaby Joyce, federal member for the seat of New England and former deputy prime minister, called for "temperance" in the legislative response to Commissioner Hayne's recommendations, flagging risks to competition if commissions are banned entirely.

"We have to make the appropriate changes, but we can't ride roughshod over every broker," Mr Joyce said.

"I think brokers have played a substantial role in spreading the customer base away from the four major banks and into minor banks.

"If we lose sight of that, we are actually going to reduce competition."

Mr Joyce claimed that the commission's recommendations may have contributed to the rise in the major banks' share prices as a result of the perceived implications on competition.

Following the release of the commission's final report, the share prices of ASX-listed brokerages Mortgage Choice and the Australian Finance Group fell sharply, dropping by 25 per cent and 29 per cent, respectively.

In contrast, the Commonwealth Bank of Australia's (CBA) share price, for example, increased by 4.6 per cent on the same day.

"I believe that might have been one of the reasons where, after the banking royal commission was brought down, the more observant realised that the price of the major banks should go up, because they could see a reduction in competition," Mr Joyce added.

"That's certainly something we didn't want, and we certainly did see a rise in share prices of the major banks after the royal commission came down."

Member of the federal seat of Fairfax Ted O'Brien also weighed in on the debate, noting his concerns regarding a move to ban upfront commissions, despite expressing support for the introduction of a "best interest duty" and the banning of trailing commissions.

"(I) do have concerns around the idea of banning, abolishing upfront fees and upfront commissions. By doing that, plus the trails, mortgage broking would be over," he said. "Mortgage broking as a sector would be dead."

Mr O'Brien stated that he spoke to mortgage brokers in his electorate, who he said were "baffled" by the Labour Party's commitment to introducing a consumer-pays model, which he said would see the industry "completely destroyed".

"They signed up to that without even reading it," he continued. "This is the incompetence of the Labor Party."

Mr O'Brien concluded: "(We) cannot stand for that, and I for one will be standing up for the 125 mortgage brokers in my electorate of Fairfax, whose industry should not be destroyed outright by the blindness of the Labor Party."

However, in its analysis of the commission's final report, Deloitte claimed that Commissioner Hayne's call for a borrower-pays remuneration model and introduction of a "best interest duty" would not "sound the death knell for the industry".

The consultancy firm claimed that the proposed reforms could serve as "opportunity" for the third-party channel.

Deloitte, however, warned that it is "critical" that policymakers "progress with care" and "focus on protecting robust and healthy competition in the market".

The broking industry has strongly opposed such changes, with industry leaders flagging the risks of structural changes to the broker model on competition in the mortgage market.

The industry has also launched campaigns promoting the broker proposition, with the Mortgage & Finance Association of Australia funding a "Don't Kill Competition" campaign, which aims to demonstrate to a mass audience the negative ramifications of potential policy changes.

Grass-roots campaigns have also been launched, which include petitions with over 40,000 signatures.

05:50 AM, 14 Feb 2019 Source: The Advisor

Banking Royal Commission Update - from Peter White

It's been almost a week since Commissioner Kenneth Hayne handed down his report from the banking royal commission - a report that stunned our industry.

Rather than focusing on bank culture and misconduct as was the brief, Commissioner Hayne turned it into a review of broker commissions, despite the fact that these reviews have been done already by regulators.

You have a right to be outraged, and the FBAA spent the days following the release of this report by responding immediately and directly to politicians of all colours. I was also interviewed on behalf of the FBAA by over 70 media outlets last week including Sky News, ABC News, SBS News, Ten News, Nine News, Radio National, ABC PM, 2GB with Ross Greenwood, 3AW, many News Corp and Fairfax publications and others.

I say this not to promote the association, but to keep you informed of what we've been doing on your behalf. This was our focus last week, and resulted in significant momentum for the industry. In fact Sky News took the questions I raised directly to the Treasurer, who then defended our sector by committing to protect the 20,000 small business operators who make up our industry.

There is a lot of angst across the broking sector, and justifiably so. There has also been a lot of commentary and efforts to defend the industry, which is excellent.

So in the midst of all this talk and reaction, let's pause for a moment and review the current situation and what needs to be done now. Firstly I want to make it clear that from the FBAA's perspective, it's all about our members, and we will not allow you - or for that matter any other broker who is also a vital part of our industry - to be the victim of what can only be described as a poorly drafted response by a commissioner who clearly was out of his depth when it came to understanding the role of our industry.

Let me make this clear that based on my discussions and engagement with politicians, my view is that up-front commissions will not go, fee-for-service will not be implemented in Australia, and the conversation over trailing commissions has not finished. If these are seen as fighting words, be assured they are! But this is also a rational and measured response when all things are considered.

Here are some points to note:

  • These are recommendations only, and a lot of legislation has to be passed before they become reality. There is time to bring some sense and balance to this debate, and we've already started this on your behalf.
  • Survey after survey has shown that brokers enjoy the widespread support of borrowers, who also support brokers being paid commissions.
  • Many expert commentators have slammed this report, noting that if these recommendations are implemented, competition will decrease and the big banks will be the winners.
  • These recommendations also affect aggregators and non-major banks who can't afford to create hundreds of branches to compensate for the loss of the broker channel, which would surely happen if fees replaced commissions. Again, competition will be dealt a blow.
  • Politics must ensure common sense. The Morrison Government has acknowledged that the recommendations need reviewing and Labor - for all its political posturing - will gain no political advantage from an attempt to destroy an industry as valuable to the nation as ours.


Where do we go from here? The FBAA is your voice and we will continue - on your behalf - to talk with MPs across political divides including independents, and make our case clear. We will also partner with other groups and stakeholders across our industry to present a united industry voice that is heard.

What can you do?

  1. The most important thing all finance brokers can do is to keep writing loans and doing business, looking after clients with excellent service, and complying with regulations. This will ensure our industry remains strong.
  2. We would also urge you and all you know - including clients - to support an independent petition which will be used to show politicians the level of support for our industry. Remember every signature is a vote and votes count, particularly in an election year. Go to https://www.change.org/p/federal-treasurer-josh-frydenberg-save-the-mortgage-broking-industry
  3. Here is a link to a letter you can download from our website, which we need you to modify and customise and send to your local federal MP and all candidates in your area for the upcoming election. We must ensure that this issue is front and centre during the election campaign and that our industry secures their support.

We will also be communicating regularly with you, by email, via social media and through our website. It's important to move forward together, in unity and with one voice. It's vital to keep perspective and not overreact, but also to stand firmly for what is best for our industry and for Australia.

A strong broking sector means more competition, lower interest rates and better customer outcomes. This is the message Australia must hear.



Sincerely,

Peter White

National Property Investment Rental Yields Hit 4%

By Paul Bennion, Managing Director, DEPPRO

A combination of more competitive property prices and rising rents has seen national rental yields for residential investment properties rise to 4%.

National rental yields are now on the rise following historic lows with rental yields now rising strongly in a number of capital cities.

This uplift in national rental yields is good news for the national property market and especially for capital cities where rental yields are above the national average.

Historically, higher rental yields have been a major drawcard for property investors seeking to invest major capital city markets.

The latest CoreLogic figures for February 2019 shows that Darwin now offers property investors the most attractive rental yields in Australia at 5.9%

Capital City Rental Yields

1. Darwin 5.9%
2. Hobart 4.9%
3. Canberra 4.8%
4. Brisbane 4.5%
5. Perth 4.2%
6. Melbourne 3.6%
7. Sydney 3.4%

Source: CoreLogic

Rental yields are also very positive in Hobart (4.9%), Canberra (4.8%) and Brisbane (4.5%) while in Perth (4.2%) they are on the rise.

The weakest capital cities for rental yields are Melbourne (3.6%) and Sydney (3.4%).

Falling property values combined with weaker rental returns should see a weakening in property investor activity in both Melbourne and Sydney during the coming year and a pick-up in investor actively in other capital cities especially Darwin and Brisbane where rental yields are much higher.

For example, CoreLogic figures show that property investors account for 47% of all new lending (excluding refinancing) in New South Wales and 38% for Victoria.

In contrast, property investors only account for 30% of all new lending in the Northern Territory and Queensland.

With investors now being able to lock in fixed interest rates for around 4%, capital city property markets that can offer rental yields of 4.5% or higher will prove very attractive to investors during 2019.

DEPPRO has already experienced rising demand for tax depreciation reports in both Darwin and Brisbane during 2019 as investors are now taking advantage of positive rental yields to buy investment properties in these cities.

The generous tax benefits associated with depreciation combined with the positive rental yields make the holding cost of these properties investment affordable with the potential for rising capital growth over the coming years.