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.”