Fixed Rate Loans at record levels

The Reserve Bank has pegged the interest rates at a historic low of 2.5%, and home owners are taking advantage of this by locking in their mortgage loans. Fixed rate loans have surged to 33% of total home loans, its highest level in more than 5 years.

There has been a drastic increase of borrowers considering fixed rate options, from 16.35% in January 2013, to 33.06% in December of the same year – around the same time the RBA met and kept the interest rates at its current low rate.

Fixed rate loans are a great option to pay your mortgage, making the repayment process stress free, as you have a clear figure on your monthly dues. Borrowers are also encouraged to weigh in on the long term benefits of this repayment scheme, as any extra repayments with fixed rate loans normally come at a fee, as compared to variable rate loans where any extra repayments are free. Consult a financial planner to verify what the perfect repayment scheme is for you.

Read more about this on the Herald Sun Website.

Fixed Rate Loans up in December

Fixed Rate Loans have jumped to 33.06% last December of 2013, signs that Australians are looking for more certainty in their home loans. The last time this level was reached was in March of 2008. Fixed rates have increased by 2.5% from November.

All capital cities and states have seen an increase in Fixed Rate mortgage loans except in New South Wales where it dropped by 0.58%. Queensland recorded the highest increase, accounting for 44% of all home loans in December.

Variable rates are still popular, as it accounted for 66.94% of all loans in December, but the consistent increase in Fixed rate loans show that Australians are trying to be more careful as lenders and borrowers alike hold their breath for the next interest rate result from the Reserve Bank.

Read more about this Property Observer website.