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Borrowers told to wait before fixing rates

30/01/2012

Mortgage customers who fix their rates now could be signing up too soon with variable home loan rates likely to continue falling, banking experts say.

According to betting on futures markets, there is a 66 per cent chance that the Reserve Bank will next month cut the official cash rate by 25 basis points to 4 per cent.

Analysts say variable rates are unlikely to rise unless inflation accelerates, forcing the RBA to lift the cash rate.

Mortgage industry experts said some low short-term fixed rate loans were proving popular among borrowers nervous about volatility in interest rates, but many were prepared to gamble on falling variable rates.

Source: Herald Sun



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