By: Staff Reporter
Mortgage managers and originators are increasing their competitive edge in the industry, accounting for half of all Canstar Cannex’s top five-star rated home loan products.
According to the Canstar Cannex report, the majors were only awarded 12 per cent of the 5-star category, which rated 130 home loans.
Julian Mitton chief executive officer of Homestar Finance believes true competition is active again, which is an encouraging sign for borrowers.
“Borrowers will become more price sensitive and may switch to fixed rates to find relief from cash rate rises under the swelling economy,” Mr Mitton said.
“RBA governor Glenn Stevens has openly stated the cash rate would most likely move by another 1 to 2 per cent in 2010, which will force more borrowers to reconsider their loan options,” he said.
Economists from Macquarie Bank and CommSec are predicting the RBA’s official cash rate will hit 7.25 per cent by 2012. Taking into account increased bank margins that would translate to an average retail variable mortgage rate of 10.1 per cent.
Mr Mitton is currently encouraging his borrowers to look at their current loan now and make provisions for an increase in repayments or fix part of their exposure to further rate rises.
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