Fixed rate demand set to slump
Borrower interest in fixed rate products could wane as a handful of lenders raise the interest on their fixed rate suite.
Last week, ANZ lifted the interest on its one and three year fixed rates by 10 and 20 basis points respectively.
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And ANZ wasn’t the only lender to lift the interest on its fixed rate products last week.
Suncorp Bank also increased its residential and investment two year fixed mortgage rates by 16 basis points to 6.14 per cent.
Greater Building Society, Queensland Police Credit Union, MyState, RAMS Home Loans, Illawarra Credit Union, Catalyst Mutual and Mortgage House have also lifted various rates since last Tuesday.
While all of the rates are still largely competitive, these recent rate increases could stop many borrowers from taking out a fixed rate home loan.
Over the past few months, the popularity of fixed rate products has been on the rise, with data from AFG found fixed rates now account for 23.2 per cent of all loans – far higher than the 12.6 per cent recorded in December 2010.
Last week Westpac chief executive Gail Kelly said while some borrowers will be “put off” by the small fixed rate increases, they should get used to them.
“I expect to see more lenders make smaller rate moves more often,” Ms Kelly told media last week.
