Mortgage inquiries up as housing affordability improves

Potential home buyers are rushing to ask about taking out mortgages, as a new report shows houses are more affordable than they have been in years.

A Wizard Home Loans Affordability report yesterday showed a sharp reduction in mortgage rates drove housing to its best level of affordability in 3 years in November.

Since then, a 1.5 percentage point drop in the official cash rate on December 4 has driven rates down further.

Mike Pero Mortgages chief executive Shaun Riley said someone with a new $200,000 mortgage would now pay about $100 a week less in interest than they would have at the height of the housing boom.

That was bringing between 50 and 100 per cent more people to his door asking about mortgages compared with a month ago, he said.

Those locked into existing mortgage rates would not yet benefit from the savings. But first-home buyers were in the best position they had been in years, he said.

The proportion of an after-tax median income needed to service the mortgage on a median priced home dropped to 63.9 per cent in November, from 67.9 per cent in October.

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Posted: 16 Dec 2008

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