No demand for fixed rates
The threat of rising rates is doing nothing to encourage home buyers to refinance into a fixed rate mortgage, according to new research.
Loan Market Group chief operating officer Dean Rushton said the brokerage had not experienced any increase in enquiries for fixed rates.
“Consumers are not convinced rates are on the rise and there doesn’t appear to be any rush to fix loan rates,” he said.
“While consumers are craving stability as they also battle with higher cost of living demands, they realise that locking in a fixed rate can be a risky hedge. The significant swings in rates three years ago are still fresh in many people’s minds.”
Mr Rushton said more than 100,000 Australians committed to fixed rates of more than eight per cent just before the global financial crisis.
“These borrowers missed out on the big reductions in interest rates introduced by the RBA in response to the GFC and many of them are only just coming off those fixed rates,” he said.
“There was much speculation about fixing rates at that time, and unfortunately many consumers had to sit on the sidelines and watch rates dramatically drop in the span of several months.