Enquiries for fixed rate home loans have risen 20 per cent over the past quarter due to interest rate rises and attractive deals being offered by some lenders, says mortgage broker Loan Market.
Loan Market Chief Operating Officer Dean Rushton said the fixed rates market had become highly competitive with several lenders recently offering big cuts following six rises in official rates by the Reserve Bank of Australia (RBA) since last October.
“The Loan Market Call Centre has received approximately a 20 per cent increase in fixed rate enquiries over the last three months,” Mr Rushton said.
“Not all of them are opting to take out the fixed rate products, but it shows people are seriously considering fixing their home loans again due to the appealing offers and the uncertain interest rate climate.”
Mr Rushton said home owners concerned by the possibility of the RBA raising the cash rate from its current level of 4.5 per cent had a number of appealing fixed rate options.
“Some fixed rate packages currently on offer are only slightly higher than some of the standard variable rates,” he said.
Mr Rushton said while variable rates are influenced primarily by the RBA, fixed rate pricing is driven by financial markets.
“Variable rates are still lower than most fixed rates so it is important to consider your financial situation and motivation for fixing to determine if a fixed rate home loan is appropriate for your circumstances,” he said.
“But in an unpredictable interest rate environment they do offer peace of mind to some people.”
Mr Rushton said the RBA was likely to leave rates on hold when it next meets tomorrow.
“The fact that the RBA moved so early in the cycle means that interest rates are going to be on hold now for some time,” he said.
“There is even a possibility that the next interest rate move could be downwards if economic conditions deteriorate.”