Despite Interest Rate Cuts, Fixed Rate Loan figures are on the Rise
Over the past month, consumer interest in fixed rate home loans has increased despite the fact that it appears the RBA will announce another rate cut before the end of the year.
Many experts believe that another rate cut is necessary in order to create a smooth transition in the economy from the mining investment boom.
Despite the predictions that variable rates will almost certainly drop further, Loan Market, a mortgage broker, has reported that 40% of it’s enquiries in June were regarding fixed rate loans. This is the biggest level of monthly inquiries into fixed rate loans the mortgage broker has had since the global financial crisis.
Mark De Martino, director of Loan Market, claimed that he can understand peoples interest in fixed rate home loans. He attributed this to the fact that over the past 12 months people who had fixed interest rates have experienced rates that are approximately 100 base points lower than those who have a variable rate home loan.