Westpac hike fixed rate home loans - a prediction of things to come?
Article by Ceyda Erem
After big bank CommBank made cuts to a majority of its fixed rate home loans last Friday, it seems that Westpac is playing hard to get, hiking fixed rates by up to 40 basis points for both owners occupiers and investors.
Westpac’s owner occupier, principal and interest standard loans with 1, 4 and 5 year fixed rates jumped by 10 basis points, while investors on the same loan terms saw a jump of 30 basis points. Investors looking at a packaged home loan were also slugged with increases of as much as 40 basis points.
Unlike the changes made by CommBank, which were mostly rate reductions but with the notable exception of 5 year fixed loan rates, Westpac raised rates almost across the board, except 2 and 3 year interest only options.
“These changes from two big banks could be an indication that fixed rates will rise over the next 6 months,” said Mozo Data Manager, Peter Marshall.
Mortgage trouble on an international scale
With experts now predicting that the 10-year US Treasury bond could hit a four-year high of 3%, Marshall has predicted that Aussie borrowers could see higher fixed rates, particularly on longer term home loans, relatively soon.
“As rates and bond yields in the US increase, the cost of overseas funding for Australian banks may rise, which in turn pushes up fixed interest rates for borrowers here."
With all the talk of potential rate rises, Marshall has encouraged Aussies considering a long term fixed rate home loan to move quickly.
“If you’re looking at locking in a fixed rate for 3, 4 or 5 years, I’d say now is actually a really good time to do it, before all these changes start really taking an effect on interest rates,” he said.
So if you’d like to lock in your interest rate for a few years, make your next stop our home loan comparison tool!