Compare home loans to find good fixed rates, expert says

Thursday 24 June 2010

Article by Mozo

Australians should compare home loans in search of strong fixed-rate offers, an expert has said.

John Kavanagh, a finance columnist for the Sydney Morning Herald, observed that interest rates on a number of fixed-rate home loans are currently lower than the variable rates of about 7.4 per cent that are being offered by many lenders.

He argued that with the Reserve Bank likely to raise official interest rates over the next 18 months, "the question of whether to fix all or some of the borrowing should be accorded serious consideration".

Mr Kavanagh noted that the best two-year fixed rates are currently below 7.2 per cent, with those offered by RAMS, the Bank of Queensland, HSBC, Nationwide Mortgage and Commonwealth Bank among the most competitive.

He also pointed to three-year rates below 7.5 per cent from RAMS, Heritage Building Society, Westpac, National Australia Bank, Better Option Home Loans and Greater Building Society.

"With signs of mortgage stress growing, borrowers need to make sure they are taking every opportunity to manage their debt burden efficiently," commented Mr Kavanagh.

Meanwhile, it was reported last week that the Australian Securities and Investments Commission (ASIC) has been granted new powers to crack down on excessive home loan exit fees.

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