Home loan rates rising after Donald Trump’s win

Home loan interest rates in Australia are expected to rise following Donald Trump’s victory last week in the US presidential election. Fixed rate home loan rates could start to be repriced upwards as soon as next week. Variable rate home loans may not rise until next year. However, suddenly, pressure to lift rates, in the USA and in Australia, has intensified.

Fixed rate home loan rates often follow the long term bond rate. Since Donald Trump’s upset election victory over Hillary Clinton, bond rates have jumped up significantly.

“Australian 10 year bond yields have risen 25 basis points and in the US it’s 35 basis points,” fixed interest strategist with JB Were, Laurie Conheady told The New Daily.

“That’s quite dramatic,” said Mr Conheady, “We usually see changes of two or four basis points.”

Bond rates are used as a reference to set fixed rate loans, economist Stephen Koukoulas told The New Daily.

 

What is the average home loan rate in Australia now?

 

The average standard variable home loan rate in Australia now (November 2016) is 4.61 per cent according to Infochoice. On a $300,000 25 year loan, that rate would mean monthly repayments of around $1,686.

The average three years fixed home loan rate in Australia is 4.11 per cent. On our $300K mortgage, that would require monthly repayments of around $1,602.

 

What are the lowest home loan rates in Australia?

 

The lowest SVR in Australia right now is 3.39 per cent from Loans.com.au. On the same $300K mortgage, the monthly repayments would fall more than $200 to $1,484.

The lowest one year fixed home loan rate in Australia now is 3.59 per cent from QT Mutual Bank’s Choices Package.

The lowest three year fixed home loan rate now available in Australia is 3.59 per cent from ING DIRECT. That would require repayments of $1,516 per month.

 

Research and compare variable rate home loans here.

Research and compare fixed rate loans here.

 

Source: InfoChoice.com.au

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