Should you fix rates on your mortage?
Welcome back!
Well do you think you should fix your mortgage now? Well with interest rates near the low point in the cycle then it could be the perfect time to fix your mortgage.
Traditionally when the economic talk is still negative and the rumours in the market are for the RBA to make further cuts it is almost perfect time to lock in rates. The markets have all kicked higher with the hope of the economy recovering through 2009 but home owners should not wait till the economy improves as the RBA will but trying to slow the rapid growth that low interest rates will generate.
While interest rates are still low by historical standards it’s hard to imagine they will be at or near similar levels in two years time as the economy is likely to be back in full gear by then.
If your happy to take your chances and ride the cycles stick with the variable rate but if you want any mortgage certainty consider locking in now. Remember it has been along time since the official cash rate was anywhere near current levels.
RBA cut growth forecast to 1.5%
The RBA today announced a cut to the growth forecast to the end of December of 1.5%, this is down from the IMF forecast of 1.8% and the 2% forecast only in August.
The RBA announcement was in the November Statement of Monetary Policy. The RBA also forecast a drop in the inflation rate to 3% by the middle of next year.
It would seem the RBA statement further vindicates future cuts to the RBA rate. The interbank futures are already factoring in a forecast RBA rate of around 4% and various investment bankers expect the RBA rate to fall to 4% by the middle of next year.
Aussie cut rates to 7.65%
Aussie Home Loans have again trumped the major banks by dropping their rate by 0.40% in addition to the cut of 0.50% last week that takes standard variable rate to 7.65%.
John Symonds also unveiled the basic variable rate loan that is below 7% at 6.99%. John Symonds proclaimed the cut as a win for consumers as rates are now on offer below 7%.
The Aussie Home Loans rate changes come into effect from 10 November.
Read the full Media Statement on the Aussie Home Loans site.
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