Following the RBA decision to lower its cash target rate by 0.75% ASL will lower its interest rates from 15 November 2008 for all new loans* as follows -
| Term | Interest Rate | Difference |
| 1 Year Fixed | 8.20% | -0.50% |
| 2 Year Fixed | 7.85% | -0.75% |
| 3 Year Fixed | 8.30% | -0.50% |
| Variable Rates | 8.80% | -0.50% |
Rollovers from 15 December 2008 will reflect these changes from that date. Interest rates are subject to change at any time and are set by ASL on the supply and demand for cash in the market place at the time a loan is being processed as well as the nature of the property being used as security.
*Rates are applicable to 60% LVR loans. Does not include loadings for repayment options or building works. Higher LVR's attract higher interest rates.
In line with the RBA decision to lower the cash target rate by 25 basis points, ASL has lowered its interest rate for variable rate loans by 0.25% from 15 September 2008, as ASL's variable interest loans are always aligned with the cash target rate. The RBA is expected to lower the cash target rate to 6.5% before Christmas.
ASL's fixed interest rate for new loans was lowered by 0.15% today, reflecting the limited supply of funds available for mortgage securities in the Australian market. The supply of funds must rise before banks can afford to lower their interest rates to small business and domestic clients.
Investors, who have enjoyed the benefits of consecutive rate rises over three years, now earn a significantly higher income from their investments. Their income is unlikely to diminish significantly in the forthcoming year if their funds have been invested in fixed interest mortgages. Investors who time their repayments may average their interest income to balance the highs and lows of interest rate cycles.
ASL's interest rates always reflect the supply and demand of funds in the market place. The demand, or lack of it, works to pull up or push down interest rates. ASL's investors and finance clients have enjoyed the benefit of ASL's 84 years of unrivalled financial service by fixing rates to suit their cash flow requirements. Certainty and caution should not be forgotten in a market showing early signs of interest rates falling further.
Twelve successive interest rate rises highlight the merit of locking into an interest rate to suit both income and expense budgets. Chasing the higher income or lower cost loan can make money but many will tell of their loss. In ASL's experience, spreading investments over a cycle or locking in an affordable interest rate gives certainty and reduces stress. The post sub prime era is different. Many reputable lenders have closed their doors. Not all loans will be readily refinanced as clients learn to adopt to stricter lending criteria and less competition for loans. Supply of funds usually from overseas is not expected to run as freely as in the past.
Australian Securities Limited announced today that many of its finance clients will not have to pay the increased compliance fees which are effective from 1 August 2008. The result is that the majority of ASL's finance clients will receive an effective annual performance reward of 0.25% per annum.
This is a tangible benefit for borrowers using private finance to fund their borrowing requirements.
The increased fees are necessary to counter the negative impact of the sub prime mortgage melt down on the financial markets. Today this is greater regulatory intervention, tighter credit, more bankruptcies, volatile market activity, restrictions to access finance, increased levels of fraud, Court delays to process non performing loans and distressed borrowers receiving sub standard financial advice.
Finance clients with a good credit history with ASIF will not pay the increased compliance fee. Clients with a low performance loan history will be eligibly for the discounted fee after demonstrating a good performance over 12 consecutive months.
Australian Securities Limited is an advocate of positive credit score ratings to encourage an Australian savings culture and sensible use of good debt for the long term benefit of Australians and their families.
On 17 July 2007 the Channel 9 tabloid TV program A Current Affair broadcast statements by the Consumer Action Law Centre about late payment fees paid by a former finance client of Australian Securities Limited. The broadcast was sensationalised with previews which insulted ASL. ASL was refused the opportunity to respond.
ASL respects the privacy of its finance clients and the requirements of the Privacy Act which prohibit the exchange of financial and personal information about any person without their consent.
Channel 9 journalists would not give ASL the opportunity to respond to their proposed program. Their lawyers also confirmed before the program went to air that they would not reconsider this decision when ASL was warned of the existence of the program from sensationalised previews leading up to the broadcast.
On 12 June 2008 Australian Communications and Media Authority found that Channel 9's A Current Affair breached the Commercial Television Industry Code of Practice by not providing a fair representation of viewpoints.
ASL has an 84 year history providing financial services to its investors and finance clients. ASL's interest rates and fees are fairly priced in every transaction. Despite the breach of the Code, apologies from either Channel 9 or Consumer Action Law Centre have not been forthcoming.
Click here for more information from the Australian Communications and Media Authority website.