Mortgage rate rises 'will be less than feared'
The Reserve Bank of Australia’s (RBA) recent decision to maintain official interest rates at their previous level has meant that home loan rates will be lower than feared this year, a commentator has observed
Nick Gardner, a personal finance columnist for News Limited, noted that the financial markets have altered their prediction of a cash rate of 5.5 per cent at the end of the year to a rate of less than 4.5 per cent.
He said that such a re-evaluation means that variable rates are unlikely to rise by as much as was expected while fixed rates could also be repriced downwards trends that could encourage Aussies to compare home loans in search of the most favourable rates.
In addition, Mr Gardner argued that fluctuating rates would particular affect the owners of investment properties who hold a second mortgage in addition to the one on their family home.
He quoted advice by mortgage broker John Manciameli of Mortgage Choice who said that while there are ways to reduce the impact of a rate rise on an investment property, it is sensible to opt for a fixed-rate mortgage on a family home or principle residence.
Last week, the Herald Sun reported that a range of independent home loan suppliers are set to challenge the supremacy of Australia’s major lenders.
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