No certainty of further rate cuts
 
news

No certainty of further rate cuts

By Staff Reporter

The case for fixing your loan is becoming increasingly compelling, with figures at an attractive level and no certainty of further cuts according to Smartline Personal Mortgage Advisers.

Having calculated the potential savings, with some set to save up to $5,500 per year by locking in their mortgage at the lowest fixed rate available, it’s becoming a good option, said Smartline’s Michael Daniels.

For one major bank, over the past 14 years the basic variable interest rate has averaged 6.85 per cent per annum, he modeled. The same bank now offers 4.99 per cent for a three-year fixed rate, equating to savings of $5,500 on a $300,000 mortgage.

“This is the very reason why a third of our clients are taking out fixed rate loans,” said Mr Daniels. “When you crunch the numbers on the savings, it’s a pretty compelling argument.

“There are many more who are considering a fixed rate, but who don’t want to lock themselves into a fixed rate in case rates drop further.”

He noted this is the most common concern for those looking to fix, but argued, “While fixed rates might drop a little bit further – but I wouldn’t say it’s a certainty – the fact is the fixed rates currently on offer are historically low”.

In fact, he said, when fixed rates go up it happens more quickly than when they come down.

promoted stories

Top Suburbs

Highest annual price growth - click a suburb below to view full profile data:
1.
BERKELEY VALE 46.03%
2.
EDGECLIFF 45.06%
3.
PAMBULA 43%
4.
EAST LISMORE 41.38%
5.
SOLDIERS POINT 37.89%
No certainty of further rate cuts
SPI logo