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Jessica Darnbrough
With more than 40 lenders slashing the interest on their fixed rate products in the last month, now is the perfect time for borrowers to lock in a competitive fixed rate, several brokers have claimed.
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Last week, data from RateCity found 46 lenders had slashed the interest on their three year fixed rate products since July – taking the average fixed rate home loan to its lowest level in over three years.
Westpac became the latest lender to drop, cutting 10 basis points from its three year home loan just last week.
With competition obviously increasing in the fixed rate space, many brokers are telling their clients to take a “good look” at the fixed rate home loans on the market.
Speaking to The Adviser, Aussie’s Matthew Rogers said fixed rates are now so low that borrowers wouldn’t be doing themselves a disservice if they locked in their mortgage.
“I tell my clients that if a fixed rate home loan has a five in front of it, then it is definitely worth considering,” he said.
According to Mr Rogers, many borrowers are doing just that, with almost 80 per cent of his clients currently “asking” about their fixed rate options.
“There are definitely a lot of people interested in fixed rates at the moment. I would say the vast majority of my clients are considering fixing if they haven’t already.”
Mr Rogers’ comments were echoed by Finance Made Easy’s Tony Bice, who said more clients are now open to the idea of fixing.
“I think clients are in one of the best environments seen for a long while when it comes to getting a great rate. Most clients these days understand the benefits of fixing their loan and the risks that go with this should rates continue to fall,” he said.
“If you can get a fixed rate under six per cent, you are doing very well.”
But it is not just brokers who believe borrowers would do well to fix their home loan.
Earlier this month, Suncorp’s general manager intermediaries Steven Heavey said the static cash rate has opened the door for clients to think about fixing all or part of their mortgage.
“The fixed rates on offer at the moment are incredibly competitive and borrowers would do well to lock in part or all of their mortgage,” he said.
