1 MIN READWestpac forecasts higher interests rates: Borrowers warned to brace for higher repayments
Monthly repayments could soon cost borrowers a lot more cash if Westpac’s predictions for rate rises do come to fruit...
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The time to fix is now, according to one mortgage broker.
1300HomeLoan’s managing director John Kolenda said the time was right for borrowers to lock in their home loan, as fixed rates are currently sitting at historically low levels.
According to Mr Kolenda, in the last 20 years fixed rates have rarely fallen below 6 per cent but are now available for as little as 5.74 per cent over a 3-year fixed term.
“Lenders are clearly pricing in further interest rate cuts due to global economic weakness,” Mr Kolenda said.
“As fixed rates are forward looking any further reductions in the RBA cash rate may not flow through to fixed rates.”
Mr Kolenda said that if history was a guide, the window of opportunity for locking in a low fixed-rate home loan was likely to be short lived.
“No-one can be confident of picking the exact bottom of the cycle but this is certainly not a bad time to look at fixing,” Mr Kolenda said.
“With the prevalence of splits now, which allow borrowers to fix only part of their loan, borrowers have even more options to manage their interest rate exposures.”
“We have been through many crises over the past 20 years including the 1997 Asian crisis, the tech bust, 9/11 and the GFC and only rarely have fixed rates been as low as this.”
A broker is a real estate agent that is licensed and has completed additional training, working independently, and can hire other agents to start their brokerage firm.
A broker is a real estate agent that is licensed and has completed additional training, working independently, and can hire other agents to start their brokerage firm.
Interest is the amount of money charged by a lender or financial institution for a loan, which is calculated as the percentage of the principal amount paid over the loan term.
Mortgages are loans that are used to buy homes and other real estate where the property itself serves as collateral for the loan.
Mortgages are loans that are used to buy homes and other real estates where the property itself serves as collateral for the loan.
Property refers to either a tangible or intangible item that an individual or business has legal rights or ownership of, such as houses, cars, stocks or bond certificates.
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