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While economists have been telling borrowers that now is the time to fix, one investor's group is claiming one more rate cut can save borrowers thousands.
Speaking with The Adviser, NSW branch manager of The Property Club Chris Ford said financial institutions don’t have the consumers' best interests at heart in their push for fixed loans.
“We have to remind our investors all the time to not listen to what the banks are saying and to look at independent reports,” Mr Ford said.
“The three biggest profit making companies in this country just so happen to be the banks that service a vast majority of mortgages – they’re out to make money, not to give free financial advice.”
Mr Ford claimed that when banks say to fix, that’s almost certainly not the best course of action.
“Banks were telling investors to fix their loans 12 months ago, and fixed rates have come down from six to less than five per cent in that time," he said.
“At The Property Club, we believe another cash rate cut will occur in the near future, which will reduce fixed rates even further, but until then investors should stay variable.”
And if a borrower must fix in the present climate, Mr Ford suggested to only fix part of the loan.
Last year, brokerage heads, brokers, and even economists claimed that loans should be fixed, and some industry stakeholders even claimed borrowers who were thinking of fixing in 2011 had "missed the boat".
