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Is this the time to lock in your rate?

If you’ve been following the coverage of official interest rates in recent months, you’ll already know that the most recent statements from the Reserve Bank of Australia have indicated that homeowners can probably expect official rates to remain at their current record lows for the next few years.

However, as we all know, the Banks tend to act independently from the Reserve Bank from time to time, so we shouldn’t have been surprised by the decision from Westpac during the week to bump up the interest rates on some of their fixed rate loans.

If you missed the news, Westpac lifted both its four and five-year fixed rates by 30 basis points, which effectively removed what was previously one of the cheapest offers 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 move by the second largest home lender in the country could signal that other home loan lenders may follow in its footsteps on fixed rate loans, which raises the question… “Is this the right time to lock in my home loan rate while rates are still low?”

You won’t be surprised to know that the answer to this question really does depend on your own circumstances.

For example, 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 consider whether locking in at least part of the loan on a fixed rate will bring you real benefits. I would certainly be taking the time to chat with an experienced, independent mortgage broker to find out what refinancing deals are available in the current market.

If you are currently in the process of looking for your next home, whether you are a first-time buyer or upgrading, then I would be exercising a degree of caution until you know you have your next purchase approved and fully funded. Certainly, talk to your mortgage broker about what’s out there, but the time between signing your contract and settling your new purchase is not the time to be rethinking your financial commitments.

Remember, if you need any advice or assistance, even if it is just a referral to a caring mortgage broker to help you assess your options, the team at Barry Plant Thomastown is always happy to help. Feel free to give us a call this week on 9466 3233.

Cheers,

Con Constantinou

Barry Plant Thomastown