Demand for fixed rate home loans is at a 5-year high says Richmond Mortgage Choice broker Andrew Heath.
One question I’m often asked by Richmond and Hawkesbury home owners is whether now is the right time to lock into a fixed rate. There’s no doubt fixing is popular at present.
Research by Mortgage Choice shows fixed rate home loans soared to 33.06% of all new loans written in December. That’s significantly higher than the 30.56% recorded the month before. In fact it’s the highest demand for fixed rates seen by Mortgage Choice since early 2008.
Why are borrowers flicking to fixed rates?
There are a few reasons why fixing is so popular right now.
First, while some lenders have raised their fixed rates in recent months, there are still some very attractive fixed rates on offer. Secondly, the Reserve Bank’s cash rate is at a historic low of 2.5%. That’s means there’s not a lot of room for rates to drop but plenty of room for rates to go up.
Is fixing right for you?
- Fixing offers Hawkesbury home owners some useful advantages:
- Certainly of monthly repayments
- Protection from future rate hikes – for the duration of the fixed term at least
- More flexibility than in the past. Some fixed rate loans allow extra repayments, and even redraw
- A competitive fixed rate if you shop around.
On the downside, if you decide to prematurely bail out of a fixed rate, you could face ‘break costs’. This means it’s a case of weighing up the pluses against the potential downsides to determine if fixing is right for you.
Good advice helps
Look, fixing is an important decision and I reckon Hawkesbury and Richmond mortgage holders can benefit from expert advice before committing to a fixed rate.
The team at Mortgage Choice Richmond can help you make an informed decision. Call in any time to our office at 1/37 Lennox Street, Richmond or to arrange a free consultation, call us on 45789904 or 0411 550 600 7 days a week. Or simply email me at Andrew.firstname.lastname@example.org.