Compare home loans ahead of rate hikes, says broker

Wednesday 26 January 2011

Article by Mozo

Australian mortgage holders have been urged to compare home loans and consider refinancing before expected interest rate rises come into force later this year.

Compare home loans ahead of rate hikes, says broker

Dean Rushton, chief operating officer of national mortgage broker Loan Market, noted that the Reserve Bank (RBA) is widely expected to keep the official cash rate at 4.75 per cent during the first quarter of the year.

However, he said the RBA was still likely to move rates again in 2011, with some economists predicting a lift in the official rate to as much as six per cent by the end of the year.

Mr Rushton said that in the current economic climate it was beneficial for homeowners to act now to determine whether they could get a better deal or structure their home loan differently.

"Homeowners should be preparing for rates to keep rising after four increases during 2010," he added.

The advice comes as the latest National Australia Bank (NAB) Residential Property Index showed that home prices are expected to fall by 0.5 per cent over the next 12 months, with Brisbane set for the biggest decline of 1.7 per cent.

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