More people to fix as interest rates come down, experts say
10/02/09 10:06 AM
INTEREST
rates are tipped to hit a record-low by winter -
and analysts say this makes fixed-rate home loans a
good idea again.
The popularity of fixed-rate loans collapsed to a record-low last year as the Reserve Bank of Australia slashed rates aggressively.
This left some families paying interest rates of more than nine per cent while others on variable rates saw their mortgages drop.
But fixed mortgages are now seen as possible insurance against a surprise rise in rates.
The popularity of fixed-rate loans collapsed to a record-low last year as the Reserve Bank of Australia slashed rates aggressively.
This left some families paying interest rates of more than nine per cent while others on variable rates saw their mortgages drop.
But fixed mortgages are now seen as possible insurance against a surprise rise in rates.
Aussie Home
Loans founder and executive chairman John Symond
says the overnight cash rate will hit two per cent
by mid-2009, down from the present 45-year low of
3.25 per cent.
"I do believe the cash rate will get down to 2 per cent within the next three to four months," Mr Symond told AAP.
The official cash rate has not approached this level since the RBA was legislated in 1959.
With interest rates on home loans now also at four-decade lows, Aussie's Mr Symond said fixed-rate borrowing was starting to look like a good option again.
"We're getting very close to where fixed rates may be very appealing," he said.
"I would think consumers should keep their eyes out for the next month.
"My feeling is if you can lock in a fixed rate within half a percent of record lows, you've done very well."
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"I do believe the cash rate will get down to 2 per cent within the next three to four months," Mr Symond told AAP.
The official cash rate has not approached this level since the RBA was legislated in 1959.
With interest rates on home loans now also at four-decade lows, Aussie's Mr Symond said fixed-rate borrowing was starting to look like a good option again.
"We're getting very close to where fixed rates may be very appealing," he said.
"I would think consumers should keep their eyes out for the next month.
"My feeling is if you can lock in a fixed rate within half a percent of record lows, you've done very well."
Full Story