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With fixed rates sitting at record lows, new research shows borrowers who fix could potentially save $5,500 a year.
According to Smartline Mortgage Advisers, over the past 14 years, the banks’ basic variable interest rate has averaged 6.85 per cent per annum.
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That said, some of Australia’s leading lenders are currently offering 4.99 per cent for a three-year fixed rate.
A saving of 1.86 per cent per annum on the 14-year variable average equates to a saving of about $5,500 per annum on a $300,000 mortgage.
Smartline’s Michael Daniels said the figures would give many homeowners “plenty of food for thought”.
“This is the very reason why a third of our clients are taking out fixed rate loans,” he said.
“When you crunch the numbers on the savings, it’s a pretty compelling argument.
“There are many more who are considering a fixed rate, but who don’t want to lock themselves into a fixed rate in case rates drop further. It’s probably the question Smartline Advisers are asked the most these days – ‘Will they go lower?’.
“While fixed rates might drop a little bit further – but I wouldn’t say it’s a certainty – the fact is that the fixed rates currently on offer are historically low.
“Cheap is cheap – most people should be delighted to be paying something like 4.99 per cent, compared with the long-term average variable rate of nearly 7 per cent.”
