ANZ Bank: Avoid fixing home loan rate

Thursday 07 May 2009

Article by Mozo

Aussie homeowners looking to save money on their mortgages have been urged to hold off on adopting fixed home loan rates as interest rates are likely to fall further in the coming months.

The Reserve Bank of Australia opted to maintain the key rate at three per cent at its monthly meeting earlier this week on signs that the global economy could soon begin to recover.

However, ANZ Bank chief Mike Smith advised mortgage holders that they should "not be in a hurry" to fix interest rates on home loans, even though the cost of borrowing is now at its lowest level in 49 years.

Asked whether the base rate can be expected to fall further, Mr Smith told news.com.au: "I think it can. I think it depends very much on what happens in the next few months."

This comes after Adrian Raftery, chief executive of AccountantsRus, advised buyers looking to get on to the property ladder in Australia that they should wait until the market "settles down" to make a move.

He claimed that low interest rates and government grants have pushed current house prices up beyond realistic levels.

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