Fixed rates surge to 9 month high

I was reading Your Mortgage the other day, and was very interested to see stats indicating that people have started to lock down fixed rate mortgages in light of the ongoing rate cuts. It seems that maybe consumers are seeing an end to the cuts, speculation which would have been confirmed with the recent hold put on the cash rate, and they are committing to current rates as a result.

  

The latest report from mortgage broker Australian Finance Group showed that sales of fixed rate home loans jumped to 6.8% in April from March’s 3.7% which is a fairly significant leap! This followed the increase in the month of February where a jump of 2.5% was seen, indicating that home buyers haven’t been prepared to let these low rates pass them by for a few months now.

  

The increase in sales comes as some banks have already started to raise the interest rates on their fixed mortgages. In late April, CBA added 0.44% to its 3-year fixed rate, taking the figure to 6.19%, and Westpac increased its rate by 0.40%, resulting in 5.79%. ING also got on the bandwagon and increased its rate by 0.20% to 5.89%.

  

As first homebuyers are in the real estate market, this group remained the driving force in the market for fixed rate home loans, and the group accounted for 27.7% of all new mortgages sold in the period. NSW recorded the highest proportion of first homebuyer loan sales at 33.8% while Victoria notched up 27.3%.

  Already many of us in the industry are wondering what the government’s decision regarding the first home buyer boosts will be for the new financial year, and what the impact will be. It will be equally interesting to see what the impact will be on the mortgage industry once the decision is made.

 

Posted by Charles Tarbey on 12/05/2009 at 10:40 AM | Categories:

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