Borrowers seek safety of fixed rates
Borrowers are rushing to fix their home loans to try to escape the impact of rate rises but it may be too late. The latest data shows that there were 65,831 home loans taken out in November, an increase of 4 per cent from the previous month. 24 per cent of these were fixed for two or more years, double the average rate of the past 15 years. However banks have been increasing their fixed rates so that on average they cost 0.4 percentage points more than a variable rate loan, meaning that two 0.25 per cent increases would be required before borrowers saved any money. General manager of InfoChoice, Denis Orrock, said that many borrowers would choose a fixed rate even if it meant paying more just so they had some certainty on their repayment levels for the next few years.
By Sydney Morning Herald