Interest rates: lock it in, experts say

Interest rates: lock it in, experts say

Posted on Thursday, August 29 2013 at 10:23 AM

Property investors should consider locking in their interest rates, according to some financial service providers.

Slack-Smith, owner of Investors Choice Mortgages, says borrowers should take
advantage of currently low interest rates as they look likely to rise into next

have interest rates as low as they’ve ever been and you should really consider
tapping into your equity now before it gets tougher,” she says.

says although the property market has strengthened, lenders are looking to
tighten their criteria.

“Economists are saying that overseas economies are
looking better, business confidence worldwide is looking positive, and there
are predictions of the Australian dollar falling.

“At the moment Sydney, Perth and Canberra are at
their highest median prices, Melbourne is 4.4 per cent below its highest
historical median and Brisbane is 10 per cent below.

“What’s going to happen to interest rates long term
if the economy is improving is that they’ll begin to start going up.”

Belinda Williamson, head of corporate affairs at
Mortgage Choice, says although there are competitive offers from lenders right
now, some have already begun increasing their interest rates.

“We’ve noticed that the one, two and three-year
swap rates started to edge up since about mid-August.”

says lenders have competitive offers at present that borrowers should look at.

“Lenders currently have offers of fixed rates for
less than five per cent. Even this week we’ve seen four lenders drop their
fixed rates, so over the shorter term we’re likely to continue seeing fixed
rates fall, however it’s worth noting that there are glimpses of very marginal
increases in longer term fixed rates.

“Typically, fixed rates are higher than variable
rates so given that many fixed rates at the moment are lower than variable rates,
it certainly is a consideration for many borrowers at this point in time.”

Toole, owner of mortgage broker Custom Finance Group, says picking movements is
difficult and events that influence rate changes need to be monitored

things that have happened since Christmas (2012) have kept the trend going
down, but that can stop very quickly.

had one client who locked in around March because she was under the impression
rates were going to go up. Since then we’ve had half a per cent reduction.”

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