Lenders 'might reduce variable rates on home loans in the coming months'

Tuesday 12 April 2011

Article by Mozo

People hoping to compare home loans might be more inclined to consider a variable-rate option in light of recent suggestions that lenders are planning to cut interest rates.

Variable rates 'might be reduced'

Since November, rates have risen by around 0.45 per cent, but a senior executive suggested that one of the major banks is likely to reduce these by winter, reports the Daily Telegraph.

Yellow Brick Road founder Mark Bouris told the publication that the softening environment could be seen by the financial institutions as an opportunity to increase its share of the home loans market.

"If you look at some fixed rates, they are starting to look pretty good, lower than the variable rates," he asserted.

Mr Bouris explained that this is usually a good sign that the lenders will reduce their variable rate in the near future.

However, those who want to be able to budget carefully for their home loan repayments might benefit from heeding the advice of Smarter Property Investment author Peter Cerexhe, who said in a piece for the Sydney Morning Herald that fixed-rate mortgages can be useful for this.

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