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After months of cuts, lenders may be starting to once again raise the interest on their fixed rate mortgages.
New research from Mortgage Choice has found that for the first time in three months there was a jump in the average weekly interest rate for three year fixed rate products – climbing to 7.37 per cent from 7.33 per cent.
The average one year fixed rate also rose to 7.03 per cent from 7.02 per cent, while the five year fixed rate was steady for the second week at 7.81 per cent.
This compares to an average basic variable rate of 7.07 per cent and standard variable rate of 7.36 per cent, both of which have held steady for two successive weeks.
Mortgage Choice spokesperson Kristy Sheppard said interest rate data from the brokerage’s 24 lenders on its panel shows a rise in the average rate for three year fixed term home loans – the most popular type – after 14 consecutive weeks of falls.
“At 0.04 of a percentage point it’s not a large increase but it is one that leads us to question whether fixed rates are now on their way up,” Ms Sheppard said.
“Over the three months previous to this week our panel’s average three-year fixed interest rate had dropped by 0.46 percentage points. On a 30-year $300,000 principal and interest loan this is a monthly repayment difference of almost $95.”
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.