Fixed rates set to rise

Fixed rates set to rise

by 0 comments

Staff Reporter

The popularity of fixed rate mortgages will increase dramatically before the end of the year, one consumer advocate has claimed.

According to RateCity’s chief executive Damian Smith, the threat of rising interest rates will see the number of fixed rate mortgages rise after nine months of stability.

“The home loan market has been quiet this year mainly due to the Reserve Bank keeping the official cash rate at 4.75 percent since November 2010. The fixed mortgage market has been quieter still, with no significant movement since August 2010,” Mr Smith said.

Commonwealth Bank chief executive Ralph Norris last week said the Reserve Bank would more than likely increase interest rates two times before the end of the year.

“That means the typical household with a $300,000 mortgage at the average basic variable rate of 7.11 percent will see their monthly repayments increase by $97 with two 25 basis point rate rises,” Mr Smith said.

“The average three-year fixed rate is currently 7.41 percent and if borrowers are concerned with rising interest rates, locking in at this rate could save you over $1,200 in three years if variable rates rise by 0.50 percent.”

Staff Reporter

The popularity of fixed rate mortgages will increase dramatically before the end of the year, one consumer advocate has claimed.

According to RateCity’s chief executive Damian Smith, the threat of rising interest rates will see the number of fixed rate mortgages rise after nine months of stability.

“The home loan market has been quiet this year mainly due to the Reserve Bank keeping the official cash rate at 4.75 percent since November 2010. The fixed mortgage market has been quieter still, with no significant movement since August 2010,” Mr Smith said.

Commonwealth Bank chief executive Ralph Norris last week said the Reserve Bank would more than likely increase interest rates two times before the end of the year.

“That means the typical household with a $300,000 mortgage at the average basic variable rate of 7.11 percent will see their monthly repayments increase by $97 with two 25 basis point rate rises,” Mr Smith said.

“The average three-year fixed rate is currently 7.41 percent and if borrowers are concerned with rising interest rates, locking in at this rate could save you over $1,200 in three years if variable rates rise by 0.50 percent.”

promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2017

With a combined sales volume of over $14 billion in 2017, the Top 100 Agents ranking represents the very best sales agents in Australia. Find out what sets them apart and learn their secrets to success.

featured podcast

featured podcast
Marnie Seinor on structure, database DNA and connecting with her local community

There’s no such thing as an “off switch” in real estate – so says McGrath agent Marnie Seinor, who came in at number 78 in this year...

View all podcasts

Does the benefit of being part of a branded group outweigh the cost?

Yes
No
Depends on the group
Do you have an industry update?