Interest rates may be at their lowest level in eight years but the industry is confident there are more rate cuts – and better deals – to come.
Of the 643 respondents to Mortgage Business’ latest straw poll 82 per cent said now was not a good time for borrowers to lock in a fixed rate loan.
Just 14 per cent said it was a good time while four per cent were unsure.
With the cash rate having dropped a record three per cent in just four months to 4.25 per cent there’s little doubt brokers have seen an increase in borrower enquiry around fixing their mortgage.
Ann Folbigg of Mortgage Force said the time to fix was edging nearer but it hadn’t quite arrived.
“I think we’re close, but everyone is expecting further rate cuts in February or March, so I don’t think we’re quite there yet,” she said.
“Once we’ve seen a further reduction in the new year we should be at or close to the bottom of the cycle, so the best time to fix will probably be then, or just before,” she said.
Ms Folbigg said borrowers wouldn’t be doing themselves a disservice if they fixed now, however she was confident there would be even better deals to come.
Mark Mellick of Auspak Finance said fixing had become a topical issue among his clients but he hadn’t moved to lock in any loans as yet.
“I still don’t believe it’s a good time to fix rates. I think there’s still more of a correction to come and we’ll definitely see rates drop again early in 2009,” he said.
Mr Mellick said the ideal time to fix could be around May or June next year
At Tiffen and Co and The Mortgage Detective, director of operations Alison Whittle said the focus was on coaching clients so they would understand when the right time to fix would be.
“We can’t advise our clients but what we can do is provide them with the knowledge they need to make an informed decision on fixing their loan.
“We’re concentrating on educating our clients, making them aware of what’s going on with the economy and interest rates, so that they can make the right choice when the time comes.”
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