 No rush to lock in fixed rate
The cost of a low fixed-rate mortgage may be the lowest it has been for years, but consumers are not taking the bait.
In its statement of monetary policy released last week, the Reserve Bank said the cost of a three-year fixed rate loan was "close to its lowest level in at least 15 years", with the five largest banks charging just 5.85 per cent on average. "Nonetheless, with variable rates below fixed rates at present, and borrower expectations of further cuts to variable housing rates in coming months, the share of owner-occupier loan approvals at fixed rates remains very low," the RBA said.
Many consumers are hoping that rates will fall further and are reluctant to fix their home loan rate now.
Predictions are that the official cash rate could fall from it's current level of 3 per cent to as low as 2 per cent.
The decade high fixed rate average of 11.5 per cent has now fallen to only 2.5 per cent and Baillieu Stockbroking analyst Stewart Oldfield said Australians should think about whether their loans were appropriate for their circumstances.
Australia's largest banks last month increased rates for fixed loans in a move that may have marked the bottom of the fixed-rate market.
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