What we need to keep in mind is that the Banks often act independently of the Reserve Bank from time to time, and we saw another example of this during the week when Westpac decided to bump up the interest rates on some of their fixed rate loans.
If you missed the announcement, Westpac lifted both its four and five-year fixed rates by 30 basis points, which effectively ended what was formerly one of the cheapest rates on a four-year fixed mortgage of 1.89 per cent. Westpac’s new rate is now 2.19 per cent for a four-year fixed-term rate, while their five-year rate now comes in at 2.49 per cent.
This decision by the second largest home lender in the country could signal a move by other home loan lenders to follow in its footsteps on fixed rate loans, so homeowners may well be asking the question, “Is now the right time to lock in my home loan rate while rates are still low?”
Not surprisingly, the answer to this question really depends on your own situation.
If you are currently in the process of looking for your next home, whether you are a first-time buyer or upgrading, you might be wise to exercise a degree of caution until you know you have your next purchase approved and fully funded. Yes, you could talk to your mortgage broker about what deals are out there, but the period between signing your contract and settling your new purchase is not the time to be restructuring your financial commitments.
However, if you are currently in a home that you intend to stay in for the foreseeable future, now is certainly a good time to be shopping around for the best deal, and to weigh up whether locking in at least part of the loan on a fixed rate could bring you real savings. There’s certainly no harm in having a chat with an experienced, independent mortgage broker to find out what refinancing deals are available in the current market.
Remember, if you need any advice or assistance, even if it’s just a referral to a caring mortgage broker to help you assess your options, the team at Barry Plant Frankston is always happy to help. Feel free to give us a call this week on 9781 3100.
Barry Plant Real Estate
Frankston & Cranbourne