How Rising Inflation Affects Interest Rates

For everyday Australians, this latest jump in inflation isn’t just a number on a chart — it directly influences the cost of living and, more importantly, the direction of interest rates. When inflation rises, it signals to the RBA that the economy might still be running hotter than ideal. As a result, rather than easing interest rates to give borrowers some breathing room, the central bank may decide to hold steady or even wait longer before making any cuts.

The Biggest Price Hikes Driving Inflation

The Australian Bureau of Statistics (ABS) reported that the Consumer Price Index (CPI) rose by 3.2 per cent over the year to September, driven by higher housing, transport, and recreation costs. Electricity prices surged 9 per cent during the quarter, contributing heavily to overall price growth. Annual electricity costs have jumped a staggering 23.6 per cent as several state government rebates have come to an end. Property rates and council levies also saw their largest rise in over a decade, pushing household budgets even further.

What This Means for Homeowners

For homeowners, this means the cost of running a home — from energy to council rates — continues to climb. Even though rental inflation has eased slightly, the broader picture remains challenging for both property owners and those looking to buy. A higher inflation rate often delays relief on mortgage repayments, since rate cuts are less likely when the economy still shows strong price pressures.

Banks Adjust Their Forecasts

The big banks have already adjusted their outlooks in response. The Commonwealth Bank of Australia (CBA) noted that the unexpected strength in trimmed mean inflation makes a rate hold more likely for a “prolonged period.” Westpac and Bendigo Bank have also hinted at pushing back their forecasts for the next rate cut, with some now expecting any movement to come as late as February 2026.

What Borrowers Can Do Now

For borrowers, this means the current higher-rate environment could stick around a little longer than hoped. It’s another reminder of how closely inflation and interest rates are tied — and how shifts in one can ripple quickly through household budgets. While this may feel discouraging, it’s also a good opportunity for homeowners to review their current loan, explore refinancing options, or speak with their broker about strategies to stay ahead of rising costs.

Inflation may be rising, but with the right advice and a proactive approach, homeowners and borrowers can still navigate the challenges and keep their financial goals on track — no matter what direction the next RBA decision takes.

Get in touch with our team today. We’re here to help you explore your options and find the right solution for your financial goals.

The post The Plot Twist No One Wanted: Inflation Makes a Comeback first appeared on Mortgage Brokers Brisbane Gold Coast.

Arrears Edge Higher—But Still Historically Low

Data from the March 2024 quarter shows a slight increase in mortgage arrears, rising from 1.64% to 1.68%, based on figures from the prudential regulator. Despite this minor uptick, mortgage arrears remain well below levels seen during the pandemic and are still lower than international benchmarks.

Cotality, formerly CoreLogic, noted that borrowers with high loan-to-value ratios (LVRs) and loan-to-income ratios saw peak arrears in early 2024—around 2.5% for high LVRs and 1.5% for high loan-to-income borrowers. Both groups are now trending lower.

Why Are Arrears Staying So Low?

Cotality’s research director, Tim Lawless, attributes the ongoing stability to a combination of strong employment, tighter lending standards, and minimal risky lending activity. Most significantly, less than 1% of mortgage holders are in a negative equity position. This means that households facing financial strain are typically able to sell their property before defaulting, preventing broader mortgage stress.

The strengthened mortgage serviceability buffer—raised from 2.5 to 3.0 percentage points in October 2021—has also played a key role in shielding borrowers from default risk, despite mortgage rates climbing more than 3 percentage points since the ultra-low interest rate period of 2020–22.

Brokers: A Key Support System for At-Risk Borrowers

Mortgage brokers remain an important line of defence for borrowers experiencing repayment stress. Cotality economist Kaytlin Ezzy said brokers can offer tailored guidance to struggling borrowers by explaining available options and steering clients toward financially sustainable outcomes.

Ezzy emphasized that early broker intervention could help prevent borrowers from falling into arrears by restructuring loans or recommending alternative financial strategies.

What to Expect as Rates Continue Falling

Looking ahead, Cotality expects arrears to decline further as the Reserve Bank of Australia continues its rate-cutting cycle into 2025. With inflation now within the RBA’s target band, the cost-of-living burden is expected to ease, offering some relief to household budgets.

Ezzy noted that falling interest rates and rising property values should reduce the likelihood of borrowers entering negative equity, which in turn supports overall market resilience.

Borrowers Adjust Spending to Prioritise Debt

Cotality’s analysis highlights how many households have embraced the so-called “wagyu and shiraz” scenario—cutting back on discretionary spending in order to meet debt obligations. This shift in spending behaviour, combined with strong employment and higher home equity, has helped prevent a surge in arrears even in a high-interest environment.

Tim Lawless summed up the outlook, stating: “It’s likely mortgage arrears will trend lower from here as mortgage rates continue to reduce and cost-of-living pressures ease further. With housing values once again on a broad-based rise, instances of negative equity are expected to remain a tiny portion of Australian housing stock, providing further resilience to default.”

Need help navigating rate changes or exploring your options? Contact us today to explore your options and stay on top of your financial goals.

The post Mortgage Market Stays Strong as Arrears Defy the Odds first appeared on Mortgage Brokers Brisbane Gold Coast.

A Trusted White Label Funder Comes to an End

Advantedge, a division of NAB, has long been a key player in Australia’s mortgage market, funding simple, cost-effective home loans through a range of aggregator-branded products. These include well-known offerings such as AFG Home Loans Edge, Mortgage Choice SmartSelect, Loan Market’s Go Edge, Connective Essentials, Astute Simplicity, and Yellow Brick Road Home Loans Select.

Originally established as Challenger Mortgage Management before becoming Advantedge, the lender built its reputation on streamlined processes, digital service, and competitive pricing. Over the years, it has helped brokers offer clients a compelling alternative to traditional bank-branded loans.

Key Dates and What’s Changing

According to NAB’s announcement, Advantedge will stop accepting new loan applications from 30 September 2025. While borrowers will still be able to request changes—both credit-critical and non-credit-critical—beyond this date, a cut-off for all variations is expected to follow in due course.

From 2026, existing Advantedge customers will be gradually transitioned to NAB-branded home loans. During this time, all servicing requests will continue to be handled as normal. However, once a loan is moved over to NAB, all future servicing will need to go through NAB’s systems and teams.

Importantly, NAB has confirmed there will be no changes to commissions or clawbacks, and the online servicing platform StarNet will remain available until further notice. This assurance will come as a relief to brokers currently managing large books of Advantedge clients.

Why Is NAB Making This Change?

NAB says the decision reflects its commitment to enhancing the customer experience by offering more features, greater flexibility, and improved digital tools under its own brand.

In a message to brokers, the bank explained:

“Customers will benefit from additional features, including access to up to 10 offset accounts, transactional banking, and expanded functionality via the NAB App.”

The move also aligns with NAB’s broader strategy to focus on proprietary lending channels. CEO Andrew Irvine has previously outlined plans to increase direct lending activity, and NAB’s latest financial results suggest that strategy is well underway.

A Shift in Strategy Backed by Data

NAB’s half-year financial results for the six months to March 2025 revealed that proprietary lending is on the rise. New NAB-branded home loans (excluding UBank) increased 25% year-on-year, reaching $16.6 billion.

At the same time, loans originated through the broker channel dropped from 64.6% to 59.6%—an 8% decline. This indicates a clear shift in distribution preference, with NAB doubling down on channels it can more directly control and integrate.

For some in the broker community, this pivot has been met with disappointment. Many brokers rely on white label lending options to offer clients more tailored or cost-effective solutions. The closure of Advantedge reduces that diversity in the market.

What This Means for Brokers and Borrowers

For brokers, the next 12 to 18 months will be critical in terms of client communication and planning. Existing Advantedge customers will receive updates and notifications, and their loan documents will be reissued under NAB branding.

Fortunately, NAB has stated that interest rates, fees, and charges will remain the same during the transition. AFSH Nominees will continue acting as an agent and credit representative of NAB until all loans are fully transferred.

Meanwhile, NAB is promising to keep brokers, aggregators, and customers informed at every step through regular updates and milestones.

Looking Ahead

Although change can be challenging, it also brings opportunity. NAB’s shift toward proprietary lending and enhanced digital capabilities may open new doors for borrowers seeking more functionality, and for brokers who adapt quickly to the evolving lending environment.

As this transition unfolds, staying informed and proactive will be essential—for brokers looking to maintain strong client relationships and for borrowers seeking clarity around their loan’s future.

If you currently hold an Advantedge loan or are unsure how this transition may affect your lending options, we’re here to help.

Get in touch with us today to review your current home loan, explore refinancing opportunities, or simply get clear answers on what to expect. We’re committed to supporting you every step of the way during this industry shift.

The post NAB to Retire Advantedge: What It Means for Borrowers and Brokers first appeared on Mortgage Brokers Brisbane Gold Coast.

Refinancing Activity Hits New Highs

According to the Australian Bureau of Statistics, external owner-occupier refinancing jumped by 12% in the final quarter of 2024 compared to the previous quarter. This increase reflects a broader shift in borrower behaviour, as homeowners seek to reduce monthly repayments and escape higher interest rates locked in during previous loan terms.

This surge is supported by positive sentiment: over 80% of borrowers now feel either optimistic or neutral about their financial outlook, according to research from the Mortgage & Finance Association of Australia (MFAA).

Why Are More People Refinancing Now?

Several factors are driving the refinancing wave:

• RBA rate movements: Earlier this year, the Reserve Bank of Australia paused and then slightly eased the cash rate, which signalled to many borrowers that now is a good time to act.
• Lower refinancing hurdles: Lenders can now apply a reduced 1% serviceability buffer (instead of the standard 3%) for simple, like-for-like refinances. This regulatory change makes it easier for some borrowers to qualify for a refinance.
• Desire to beat the “loyalty tax”: Borrowers are realising that staying with the same lender doesn’t always pay off. New customers often receive more competitive rates than existing ones.

Mortgage Stress Is Easing – But Not for Everyone

While mortgage stress has decreased—falling from 49% to 24% of brokers reporting high levels of client stress over the past year—it hasn’t disappeared. Some borrowers, despite steady income and good repayment history, still struggle to refinance due to tight lending standards.

These borrowers often find themselves in “mortgage prison,” where they can’t qualify for a new loan even though it could lower their repayments. That’s why understanding your options—and getting professional advice—is more important than ever.

Mortgage Brokers Are in High Demand

With lending conditions varying across banks and non-bank lenders, navigating the refinancing process can be overwhelming. This is where mortgage brokers play a vital role. They can:

• Compare interest rates and loan features across multiple lenders
• Assess borrowing capacity under new rules
• Advocate for better deals with current or new lenders
• Help first-time refinancers understand the process

As the market becomes more complex, more borrowers are seeking out broker support to make informed decisions.

Is Now the Right Time to Refinance?

Refinancing isn’t for everyone, but for many Australians, it’s a smart financial move—especially in today’s rate environment. If your current home loan is more than two years old or your financial circumstances have changed, it may be worth reviewing your loan with the help of a professional.

By understanding the current trends and taking advantage of the latest lending changes, you can reduce your repayments, gain more flexibility, and regain control of your financial future.

Whether your fixed rate is ending soon, your circumstances have changed, or you simply want to see if there’s a better deal out there—we’re here to help.

Book your free home loan review today and let’s see what refinancing options are available for you.

The post Why Refinancing Is More Popular Than Ever in Australia first appeared on Mortgage Brokers Brisbane Gold Coast.