The mortgage market has become more complicated, and that Australia’s biggest banks are shaking up their fixed home loan rates is just the tip of the iceberg of the complexity.
At the end of September, Commonwealth Bank cut its 3-year fixed rates for owner-occupiers and investors while increasing one and four-year rates. It’s incredibly confusing and just another reason why almost 70% of residential mortgages are now written by finance specialists such as Our Broker, according to research from the Mortgage and Finance Association of Australia (MFAA)’s Industry Intelligence Service report (IIS)[i].
As for why fixed rates seem to be heading in different directions, Craig Betalli, a senior broker from Our Broker, says it’s not entirely clear why this scattergun approach to rates is occurring. Perhaps lenders are attempting to balance their portfolios to have a smoother spread of shorter- and longer-term fixed rates.
With most borrowers currently opting for variable-rate home loans, it could be a marketing ploy to encourage some customers to consider a fixed rate. Cashback offers attract many customers to refinance their mortgages to variable-rate loans.
As Craig says, borrowers need assistance to get a better rate and find out if they can borrow enough for their new home or investment. Then there are the life events, such as how we prepare for having a child. How do we move forward after divorce, or how do we finance a renovation, a new business or help our children into property? Or what are the best ways to fund a car?
A finance specialist from Our Broker can suggest a range of products based on your situation, enabling you to compare several options rather than simply going with a lender you already bank with, for example. If you don’t have the time to research home loan options, a mortgage broker can do that work for you.
If you’re considering your next property move and would like to know your finance options, talk to Our Broker today on 1800 913 677.