Rising interest rates are expected to encourage more Australians to choose fixed mortgage products over variable rates, according to FirstMac.
In response, the non-bank lender has released a new, competitively priced capped rate product, FightBack II home loan.
The home loan features a capped option and a professional pack option.
It also comes with a 6.19 per cent p.a variable interest rate capped for 2 years at 7.49 per cent p.a, so if interest rates fall, the product rate will also fall.
However if rates rise, the product rate won't go above the 7.49 per cent capped rate during the capped rate period.
FirstMac managing director Kim Cannon said that the non-bank lenders sector was emerging from the disruption of the past year as a strong and viable alternative to the major four banks which have dominated the Australian mortgage market.
“We are picking up on a rising level of concern from borrowers about the potential for interest rate increases this year and the FightBack II capped rate product should come into its own as the year progresses,” he said.
FightBack II follows the lenders original capped mortgage product, FightBack, which was launched in November 2008 with a one year fixed rate mortgage of 2.99 per cent.
“This is the sort of innovative product which FirstMac believes will continue to give borrowers real alternative choice to the majors. Ensuring a competitive environment should be a key thrust of Government policy as we enter the next economic growth cycle,” he said.
“The Federal Government’s injection of $4 billion of secured funds in AAA rated Residential Mortgage Backed Securities (RMBS) to non-bank lenders over the past 18 months had provided the sector with improved stability during the global financial crisis; and Australia’s consumers would now reap the benefits through competitive products like FightBack II.”
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