Low interest rates almost at tipping point: Mortgage Choice

Low interest rates almost at tipping point: Mortgage Choice
Jonathan ChancellorFebruary 24, 2015

All the advertising around low home loan interest rates was stimulating activity, the outgoing head of Mortgage Choice Michael Russell told an investor briefing.

But rates will get to a point where it will not be material enough to bring forward future buying demand, he suggested.

"We have to be getting close to that point now," he added, though not for refinancing loans.

Mortgage Choice Limited today announced its financial results for the six months ending 31 December 2014. 

The company's net profit after tax was $10 million, up 3.3% annually. Total group revenue was $97 million, up 11% on 1H14 with its total loan book reaching $48.4 billion. 

"This was up 4.5% from $46.4 billion at 31 December 2013 and is poised to hit $50 billion by 1H16," Russell advised.

"We are about to smash through the $50 billion milestone," he told the investor briefing. He said the biggest lending boost within their boost had been derived from CUA lending given their sharp lending rates.

Some $6.9 billion worth of housing loan approvals were written in the six months to 31 December 2014, up from $6.2 billion in 1H14. 

It's annual share of new home loans remained at 3.9%, although strong growth was achieved especially on Queensand's Gold Coast were it held a 10% plus market share.

Micheal Russell said the group had adopted a "steely focus" to boost its lending book.

"Victoria was starting to hit its straps," he said in what was the mortgage broker chief executive's swan song half year results.

Mortgage Choice has previously announced the appointment of John Flavell as its chief executive officer, set to join the company in April 2015.

Michael Russell will work alongside Flavell in a transition phase and then depart the business at the end of the 2014/15 financial year.

Russell joined Mortgage Choice as CEO in 2009, developing two three-year plans to expand the company.

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

Editor's Picks

First look: Surfers Paradise riverfront set for more new apartments
Capio to bring family-friendly, parkside living to Carlingford
The Melbourne suburbs that will see the biggest uplift in apartment values after interest rate cuts
The Sydney suburbs that will see the biggest uplift in apartment values after interest rate cuts
ANGLE secures new Camberwell apartment project