After many months of fixed rates lower than variable rates, December and early January saw fixed rates start to creep upwards which would suggest that at least the fixed rates have bottomed.
New data has found a growing proportion of borrowers are seeking the security that comes with a fixed rate home loan.
According to the latest national home loan approval data from a leading mortgage broker, fixed rate home loans accounted for 22.04% of all loans written in December, up from 19.51% in the month prior. The fourth consecutive month that has seen fixed rate demand increase.
With speculation mounting that the Reserve Bank of Australia may soon lift the official cash rate, it is clear that a growing proportion of borrowers wish to beat any potential rate hikes by opting for a fixed rate home loan.”
Current market conditions combined with a spate of rate increases by Australia’s lenders before and after Christmas has meant a rate rise by the Reserve Bank this year was now more likely than not.
It is also noted that the Reserve Bank of Australia has stated that the time for easing the monetary policy setting has now passed. All of these factors combined would suggest that a rate increase by the Reserve Bank could be right around the corner.
Borrowers understand this and that is why a growing proportion of mortgage holders are opting for fixed rate products to beat the threat of rising rates. Some are also switching to ‘combo’ products which allow the loan to be split into a fixed and variable component.
At Brickhill Financial Solutions we have access to many fixed rate products from a range of Australian lenders. Please give us a call to discuss your options and find out more.
Brickhill Financial Solutions – 1300 252 088