Locking in Low Home Loan Rates…
HOME owners are rushing to fix there mortgage loans amid speculation rates can only rise from the current historic lows.
The Reserve Bank of Australia is keeping its cards close to its chest after last year’s official rate cuts to a record low 2.5 per cent.
Property experts say they have seen a major rise in home owners moving away from variable rates—despite many suggesting it could be as late as the end of the year before the Re- serve Bank actually lifts rates.
Australian Bureau of Statistics figures show the number of borrowers fixing part, or all, of their home loans more than double over 2013—climbing from 16.35 per cent in January to 33.06 per cent in December.
Several banks have already lifted their middle and longer-term fixed-rate home loans since the start of the year and this trend is expected to continue.
Many fix the home loans so that they know exactly how much they are expected to pay each week.
In today’s volatile financial landscape, consumers are looking for stability, which is why home-owners might be attracted to move into a fixed rate. In these times, people crave calm.
So, to fix or not to fix? If you take a fixed- rate loan today you might shave 40 to 60 points off your annual repayments. But the bond markets are forecasting rates cuts so it might be prudent to wait. If the unemployment rate really does start rising rapidly, the RBA could cut rates by a full onto to two percentage points