Fixed rates on the rise
Some fixed-rate home mortgage loans have jumped almost a full percentage point in the past week, which suggests the years of record low interest rates are over.
More than one-third of the home loan market has increased its fixed-rate loans by as much as 0.8 per cent in the past week. Some institutions have increased their rates twice in the same time.
Small lender Newcastle Permanent, one of the most competitive lenders in the market, has increased its four and five-year fixed-rate deals twice this month by as much as 0.8 per cent.
Of the big four banks, ANZ is the only lender not to shift its fixed-rate deals this month.
Analysis by financial comparison website RateCity found dozens of lenders had increased rates this month and many more were expected to follow, signalling now could be the right time for borrowers to lock in fixed rates.
Home Loan Experts managing director Otto Dargan said any lenders that had not shifted their fixed rates were likely to do so soon.
“The market has turned and it’s likely that the lenders that haven’t put up their fixed rates are deciding what to do now,” Mr Dargan said. “Nobody can predict the future of interest rates.
“Next year they may be up or down, so fixing is always somewhat of a gamble.”
RateCity spokesman Peter Arnold said the rising cost of funding and a competitive mortgage market had helped drive up fixed-rate deals.
“We have now seen one-third of the market move fixed rates, so that’s a big chunk of lenders and we’ve seen some pretty big increases,” he said.
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