Homeowners on a fixed home loan should act now to get ready for anticipated rate rises.
Last year, the number of fixed rate loan applications were at an all-time high, this is due to borrowers taking advantage of record low interest rates in response to the pandemic. Those who took out these fixed rate loans need to start investigating their options as many are now coming or will be coming to an end with large financial impacts on borrowers.
$99 billion worth of fixed rate mortgages are ending in the second half of 2023 from Australia’s two biggest banks alone, Westpac and CBA.
As forecast by ANZ and Westpac, if the RBA cash rate rises another 1.25 percentage points to 3.85%, many of these fixed rate borrowers could be looking at revert rates of between 6 and 7%. That could mean an increase in repayments for the average household of over $20,000 annually.
If you are in this position, acting now can help relieve the stress associated with these potential rate rises from your fixed rate loan ending.
Here are a few ways you can prepare.
It’s a competitive market for lenders, and some are prepared to tighten rates for refinancers willing to make the switch.
If you have any questions regarding fixed rates or finding a better offer, our team is always here to help.