Official figures show that 16.8 per cent of new home-loan customers chose a fixed rate in December 2013 suggesting that many feel this is as low as fixed rates are going to go.
Many economists expect the next direction for interest rates to be up, so it's a good time for borrowers to consider a fixed-rate mortgage.
The number of fixed rate loans being taken out tends to increase dramatically before interest rates rise. The latest official figures show the proportion of new home-loan customers who chose a fixed rate in December was 16.8 per cent, which is above its long-term average, suggesting that many feel this is as low as fixed rates are going to go.
The main advantage of a fixed rate home loan is the peace of mind borrowers have in knowing what their monthly repayments will be for a set (or fixed) period of time. This helps with budgeting and planning.
The downside is that they are generally less flexible than a variable rate home loan, especially if the fixed term needs to be broken for whatever reason. Fixed rate borrowers also tend to be restricted from making additional payments.
One way around these restrictions is to choose a fixed loan that has a smaller term. The most popular fixed rate mortgages tend to be for three-year terms but a range is available.
Resi offers a two-year fixed home loan that is one of the most competitive on the market from a full-service lender: 4.69 per cent per annum (5.33 per cent comparison rate). It also allows borrowers to make additional payments of up to $20,000.
While refinancing is a relatively simple process, borrowers should remember to compare any new fees when comparing different loans and to make sure they are satisfied a new loan will be leave them better off financially.
About Resi Mortgage Corporation:
Resi is an award winning, market leading non-bank lender specialising in home loans, commercial loans, investment loans and financial services. Resi is an Australian owned and operated lender with over 25 years experience dedicated to providing Australian's with low cost, innovative products to help them own their dream. Resi provides a full service operation that includes local lending specialists and an Australian based customer service team.