September Update – Millbrook High Yield

A timely update on market conditions from our Managing Director, David Lyall. If you would like to discuss anything in more detail, please contact David directly.

1. Significant enquiries for loans continues
Our Mortgage Broker channel is finding the banks very slow to deal with and this is meaning more clients are looking to use the non-bank lenders. This is a good thing as we have more deals to choose from.

2. Valuers are reducing values
Valuations are reducing as we lend say 60% against the reduced value, which does not really affect us. Properties still seem to be selling but there is not as many buyers.

3. Arrears and Borrower defaults
We are not seeing any stress from our Borrowers and surprisingly we have never had a request for assistance during Covid. Our interest rates for current Borrowers will not increase and rates for Borrowers and Investors are fixed.

4. Investor interest rates rising
There is now the opportunity to increase Investor rates on our First Mortgages, I see these being 8% – 9% going forward. There is a lot of wholesale money available and competition for deals is strong. I see Second Mortgage rates staying in the 12% – 20% range.