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ISCOVER
Jessica Darnbrough
The static cash rate has opened the door for brokers to talk to clients about fixing part or all of their mortgage, Suncorp’s general manager intermediaries Steven Heavey has claimed.
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Speaking to The Adviser, Mr Heavey said many borrowers have put off fixing their mortgage because they believed the Reserve Bank may choose to cut rates once more.
However, by choosing to leave the cash rate on hold at 3.5 per cent for the second consecutive month, Mr Heavey said borrowers would be keen to review their mortgage options.
“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.
“At the moment, Suncorp is offering some unbeatable rates on its one, two, and three-year fixed rate loans, ranging from 5.74 per cent for a term of 12 months, to 5.57 per cent for three years.
"Because of this, I do expect to see demand for fixed rate mortgages start to pick up."
According to Mr Heavey, fixed interest rates are lower than they have been for a long time, providing borrowers with the perfect opportunity to review their mortgage options.
“Ongoing international market volatility and the flow-on effects for consumers in Australia, combined with fluctuations in petrol prices and the cost of living, have left many craving certainty around their household budget, of which home loan repayments often make up the largest proportion,” Mr Heavey said.
“It’s a great time for consumers to review their home loan and consider switching to a better offer, particularly with the highly competitive rates currently in market.
“While there are suggestions that rates could fall even lower over the coming months, consumers who are not willing to take that gamble and are looking for some peace of mind when it comes to their mortgage repayments should consider the full range of options available, taking into account their own individual needs and keeping in mind that home loans are a long-term commitment.
“The advantage of a fixed rate loan is that you know exactly how much you have to repay each fortnight or month and can budget accordingly, which can be especially beneficial for first home owners as they adjust to having a mortgage.
“However, one drawback is the loss of flexibility. For example, you generally can’t make large additional repayments on fixed loans.
“Consider partially fixing your loan and keeping the other portion at a variable rate if you want to hedge your bets.”
