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The majority of brokers believe the Reserve Bank of Australia (RBA) has acted prematurely in its decision to raise rates.
According to Mortgage Business’ most recent weekly straw poll, 83.8 per cent of brokers believe the RBA has raised the cash rate too soon.
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Of the 668 respondents, only 15 per cent thought the RBA had taken the right action, while 1.5 per cent were unsure.
Ian Fraser from Fraser Financial Services said he thought the RBA had reacted too strongly to the positive data that was flowing through the industry.
“There has been a lot of good news lately, with unemployment dropping marginally last month however, I am still unsure as to whether we have reached the bottom of this downturn.
“There could still be worse to come,” Mr Fraser said.
Smartline personal mortgage advisor, Kevin Lee, agreed that there was plenty of evidence to refute the recent stance taken by the RBA.
“We are not out of the woods yet in an economic sense and I believe it was premature to increase interest rates last week,” Mr Lee said.
According to Mr Lee, the recent rate rise was causing customers to panic about whether or not they should fix their rate.
“In my opinion the time to fix your loan was six months ago.
“I advised all my clients at the time to take a good hard look at their loans as I was fixing mine at that time. Some institutions had two year rates at 4.99 per cent and three year rates were 5.19 per cent,” he said.
LJ Hooker Financial Services finance manager Tracie Palmer said she had noticed a sharp increase in the number of people wanting to fix their home loans.
“People panic when they hear something on the news.
“That aside, I am confident that this recent rate rise will not have a huge impact on my business because I am fortunate enough to have a large network of referrer’s and a well maintained customer data base.
Let’s face it, most people are still on very low interest rates and even if rates went up 2 per cent most people would only be looking at a rate in the low 7 per cent,” she said.
