CUA has dropped interest rates on its three year fixed rate home loan from 4.89% to 4.79%.
Its comparison rate is now 5.29%.
CUA’s Jason Murray says the product is now the equal lowest rate in the market and 30 basis points lower than the lowest rate offered by the big four banks on an equivalent product.
“The market is fiercely competitive at the moment and as a result, it’s an ideal time for Australians to shop around for a great deal on their home loan,” Murray says.
According to CUA, over the three year fixed rate term of a $300,000 loan, paying principal and interest, its three year fixed rate home loan at 4.79% could save homebuyers $43 per month – or $1,551 in interest payable over the full term of the loan (three years), when compared to the average rate of the big four banks' equivalents.
It is - but with a comparison rate of 5.29%, you are still paying a premium over the discount variable rates around, in return for locking that rate in for 3 years of coruse. My variable rates are down to 5.08% now.
For Aussie property bears, "denial", is not just a long river in North Africa.....
i always fix my interest rates, it always costs me money, but i don't care. I never consider interest rates when making an investment. I look at the investment and if i think it may fit i buy and fix the rate. I then know what my repayments are. I can sleep at night. People say interest rates are up, interest rates are down. I say i fix the rate. They say that costs you. Ok. Peter from Perth :pop:
i wouldn't fix again for the reasons that I mentioned earlier. But its the same as forex rates, no one of us mere punters really know what those people that set rates will do with them next.
Property investors should consider locking in their interest rates, according to some financial service providers.
Jane Slack-Smith, owner of Investors Choice Mortgages, says borrowers should take advantage of currently low interest rates as they look likely to rise into next year.
“We have interest rates as low as they’ve ever been and you should really consider tapping into your equity now before it gets tougher,” she says.
Slack-Smith says although the property market has strengthened, lenders are looking to tighten their criteria.
“Economists are saying that overseas economies are looking better, business confidence worldwide is looking positive, and there are predictions of the Australian dollar falling.
“At the moment Sydney, Perth and Canberra are at their highest median prices, Melbourne is 4.4 per cent below its highest historical median and Brisbane is 10 per cent below.
“What’s going to happen to interest rates long term if the economy is improving is that they’ll begin to start going up.”
Belinda Williamson, head of corporate affairs at Mortgage Choice, says although there are competitive offers from lenders right now, some have already begun increasing their interest rates.
“We’ve noticed that the one, two and three-year swap rates started to edge up since about mid-August.”
Williamson says lenders have competitive offers at present that borrowers should look at.
“Lenders currently have offers of fixed rates for less than five per cent. Even this week we’ve seen four lenders drop their fixed rates, so over the shorter term we’re likely to continue seeing fixed rates fall, however it’s worth noting that there are glimpses of very marginal increases in longer term fixed rates.
“Typically, fixed rates are higher than variable rates so given that many fixed rates at the moment are lower than variable rates, it certainly is a consideration for many borrowers at this point in time.”
Mark Toole, owner of mortgage broker Custom Finance Group, says picking movements is difficult and events that influence rate changes need to be monitored continuously.
“The things that have happened since Christmas (2012) have kept the trend going down, but that can stop very quickly.
“I had one client who locked in around March because she was under the impression rates were going to go up. Since then we’ve had half a per cent reduction.”
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