news.com.au: Caution keeps loan ratios down

Smaller mortgages are in vogue as house prices soften in Australian capital cities / File Source: The Daily Telegraph
AUSTRALIANS are borrowing less as house prices slide, further entrenching the culture of debt reduction set in train by the financial crisis.
People taking out mortgages last month signed up for smaller loans relative to the value of their property than at any time during the previous six months, according to data from Australia's biggest mortgage broker.
Australian Finance Group statistics show that the average loan-to-value ratio was 64.2 per cent nationally, and the average ratio fell in Victoria, New South Wales, South Australia and the Northern Territory.
Smaller mortgages are in vogue as house prices soften, and in June the average mortgage across Australia was $384,042 - about 1.1 per cent lower than the previous month.

The average mortgage waned in all states except NSW and Western Australia, where it grew 0.5 per cent and 3.3 per cent.
In a sign that Queensland is continuing its gradual recovery from the summer disasters, mortgage sales reached the same level in June as they did in the same month a year earlier for the first time in five months.
Residential property remains subdued, with annual housing credit growth slowing to almost 6 per cent, compared with an average 14 per cent in the past 34 years.
Reserve Bank governor Glenn Stevens yesterday noted the slowdown in household credit and in values of assets.
The central bank gave borrowers another reprieve, leaving the overnight cash rate at 4.75 per cent.
UBS analyst Jonathan Mott last week told clients he expected housing credit growth to slow further thanks to pressure on household budgets caused by higher interest rates and utility, food and petrol prices.
UBS predicts housing credit growth to slow to 4 per cent by 2013, and personal lending to fall to 2 per cent.
For those intent on borrowing or refinancing, deals abound thanks to the big banks muscling in to grab another 1.7 per cent share of the mortgage market in June from their smaller competitors.
View the original article here