Fixed home loan rates in Australia are at an all time low. In some cases, you can shave almost a percent off variable home loan rates. Banks and lenders are offering some of the lowest rates for fixed rate home loans that have been seen in over a decade, with many lenders saying that the mortgage market is the most competitive it’s been for as long as they can remember.
Will the Cash Rate Fall Further?
The biggest question many Australian home loan holders are asking is, “Are lenders offering lower fixed rates, because they know the cash rate will fall further?” The answer to this question lies in the Reserve Bank of Australia cash rate statements, which suggest that interest rates will remain stable for some time to come. This is due to escalating unemployment and softer economic growth. Consumer spending, and business growth is also marginal, and inflation remains steady at 2 to 3 percent. The RBA appear to be waiting to see how current monetary policy fairs before they’ll consider moving the cash rate up or down.
Independent economists, on the other hand, appear torn. Some are suggesting another rate cut is likely during 2014, while others are hinting that rates are likely to begin to head-on up.
Fixing Your Home Loan
With some interest rates being a percent less than the current variable rate, switching home loans can save you a great deal of money. But, you need to do your homework before you consider making any changes to your home loan. Work out what your exit costs will be, and then work out how much you’ll save by switching. Make sure you include application fees and that you know what rate you’ll be on after your fixed loan term expires. Always use a home loan comparison calculator to compare home loans and make sure you consider your personal circumstances. For instance, if you’re thinking of selling in the near future, then fixing your home loan may not be ideal for you, as the bank costs could far out weight any benefit.
Looking to fix your home loan? Then contact eChoice and find the right home loan for YOU today.
Written by eChoice