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Investors should contemplate fixing their home loans before interest rates inevitably rise again, a financial comparison website has contended.
The Reserve Bank of Australia yesterday opted to leave the cash rate on hold at 2.50 per cent.
Finder.com.au money expert Michelle Hutchison said in the current low rate environment, more borrowers should consider taking advantage of affordable fixed home loan rates.
“Borrowers have been shying away from fixed-rate home loans for almost a year and shouldn't be waiting around for the Reserve Bank to raise the cash rate before they decide to fix their home loan,” she said.
Ms Hutchison warned that major economists surveyed by Finder.com.au expected interest rates to begin rising again later this year.
“If variable rates move back up to the historical normal level of seven per cent, that will cost borrowers with the average $300,000 mortgage an extra $313 every month in repayments,” she said.
According to Finder.com.au data, the proportion of fixed home loans financed has fallen since April 2013, from a peak of 20 per cent to just under 17 per cent.
Western Australian borrowers were most likely to opt for a variable rate, with only 13.48 per cent of borrowers fixing their loan.
On the other hand, Queensland buyers tended to be the most cautious about rate rises, with 21.09 per cent opting to fix.
In New South Wales 18.56 per cent of borrowers chose a fixed rate, compared to 13.98 per cent in Victoria.