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ISCOVER
Jessica Darnbrough
Fixed rates are officially back en vogue, with analysts predicting an upswing in demand over the coming months.
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BIS Shrapnel’s managing director Robert Mellor said the time to lock in a fixed rate is now.
“Fixed rates are currently very reasonably priced. Lenders have seen that there is a market there and they are slashing their rates accordingly,” he said.
When discussing which fixed rates offered borrowers the greatest bang for their buck, Mr Mellor said a five year fixed rate was definitely better than a three year rate.
“If a borrower locked in a three year fixed rate, they will find themselves looking for a variable rate when interest rates are climbing back towards historic highs,” he said.
But despite his comments, many lenders continue to promote three fixed rate products.
Yesterday, Bankwest slashed 44 basis points off its three year fixed rate product, taking it to 6.94 per cent.
The lender’s head of mortgages Dean Gillespie told The Adviser that the bank bill swap rate has come down significantly, giving lenders the ability and reason to slash the pricing on fixed rate products.
Mr Gillespie said demand for fixed rate products will inevitably start to pick up, especially as lenders continue to sharpen the pricing.
“Where ever we can, we will sharpen our product pricing so that is competitively priced with the rest of the industry. We have recently been given that opportunity and we were not going to let it get away from us,” he said.
