Home loan borrowers are seeking to make the most of low interest rates as economists predict that there may be more changes to rates in 2015.
During the closing months of 2014, economists were predicting that there would be possible rate hikes in 2015. This news has prompted many borrowers to look critically at their financial options and to seriously consider refinancing their home loan.
As a result, home loan refinancing rose to 37.5 percent of all home loans in December of 2014. This was a 5 percent increase on September figures.
Home Loan Interest Rates Fell in 2015
But given that economic growth is well below forecasted levels, many economists are changing their previous predictions of a rate rise during 2015. The Reserve Bank of Australia (RBA) made a rate cut to a record-low 2.25% and economists are now suggesting that the RBA may make more rate cuts during the year.
Home Loan Trends are Changing
As a result, fewer borrowers are seeking to fix their home loans. In fact, December 2014 fixed rate home loans fell to 14.5 percent from 17.1 percent in November.
Introductory home loans, or those designed to encourage borrowers to change lenders, rose by 5.8 percent in December, up from 4.7 percent in November.
Lenders are said to be offering far more competitive lending packages, with many able to offer better-than-advertised rates. Many borrower’s are finding these packages attractive due to further discounts.
When it comes to refinancing home loans, of the states, Victoria led the way recording the highest level of refinancing with 42.2 percent. South Australia followed closely behind on 41.7 percent along with Queensland, which recorded 39.9 percent. Western Australia and New South Wales recorded 36.7 and 31.8 percent respectively.
First home buying, nationwide, reportedly fell by 6.9 percent during 2014. It is expected that this is due to many first home buyer incentives no-longer being available.
The End of a Year and the Beginning of Another Act as an Incentive for Change
Christmas and the New Year are times when many borrowers have time to review their financial situation. Many will also make New Year’s resolutions that involve financial changes, so that they can increase their cash flow.
Are you thinking of refinancing? If so, then contact eChoice and find the right home loan for YOU today.
Written by eChoice