Home loan rates to hit 9% by 2013, says expert
Article by Mozo
Mortgage rates will soar to nine per cent and above over the next three years, a leading property expert has predicted.
Frank Gelber, chief economist at research firm BIS Shrapnel, argued that Australia's strong recovery from the economic downturn would force interest rates to rise.
Speaking at a conference in Melbourne, he said: "When inflationary pressure comes through and the Reserve Bank gets aggressive we are going to see housing rates above nine per cent.
"And that means a cash rate of seven to 7.5 per cent."
If implemented, such progressive hikes could prompt more property owners to compare home loans and refinance. As the Herald Sun observed, a rise to nine per cent would add $298 a month to the average Australian $285,000 variable home loan and $517 a month to a $450,000 loan.
Meanwhile, it was reported this week that non-bank lender Mortgage House will next month launch a home loan equivalent to 105 per cent of a property's value as it looks to help first-time buyers enter the market.
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