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Borrowers flocking to fixed rates amid rate hikes

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Reporter 6 minute read

Mortgage holders are increasingly looking to lock in a fixed rate to avoid further out-of-cycle interest rate hikes, according to one Sydney-based mortgage broker.

Speaking to The Adviser, broker at Your Mortgage Provider Melissa Mascioli noted that many of her clients are looking to refinance their home loan with a fixed rate amid out-of-cycle interest rate increases from several non-major lenders.

Over the past few months, several lenders — including Macquarie Bank, AMP, ING, Bank of Queensland, Heritage Bank and Auswide Bank — announced increases to their variable rate home loan offerings, with most attributing their decision to a rise wholesale funding costs.

However, many of the aforementioned lenders have announced reductions to their fixed rate home loan offerings of up to 56 basis points.


“There’s a lot of talk about interest rates, so a lot of my clients are looking at good fixed rates at the moment. Even a lot of my investor clients are looking to fix their rate,” the broker said.

However, Ms Mascioli noted that there are several factors that influence a client’s refinancing decision.

“The client is just looking for great service, as well as a good rate, and obviously theyre looking at what fees theyre going to be paying with that bank,” she added.

“At the moment, a lot of the bigger banks are offering the cash back for the refinance, so that [also helps].”

“We’re entering into a different space”


Further, Ms Mascioli highlighted the challenges that borrowers are facing when applying for credit, off the back of tighter lending policies imposed by banks.

“We often have a lot of clients that come to us that have been to one of the major banks and maybe had a pre-approval that is not honoured, and then theyve come to us, but they cant proceed with it.

“That automatically shows me that were entering into a different space in the market.

“[Brokers have] access to different lenders and different policies, so we try and help the best we can.”

The Sydney-based broker added that such lending policies have also prolonged the application process, with brokers now having to ask for more information upfront.

“[Lenders] are asking for more extra information, which is fine, but [brokers] are having to constantly go back to the client and just getting that little bit of extra information,” the broker said.

“As a business now, were asking for that extra information upfront, rather than continuing to go back to the client.”

Ms Mascioli is a finalist for the Mortgage and Finance Broker of the Year category at this year's Women in Finance awards.

The Women in Finance Awards, presented by Momentum Media together with principal partner NAB, aims to highlight the outstanding work of women within financial services and put them on a national stage to support the continuing growth and development of women in the financial arena.

The finalists for all 27 awards, which recognise individual and group performance, have now been released.

Winners of the second annual Women in Finance Awards will be announced at a black-tie event at The Star Event Centre in Sydney on 20 September 2018. Tickets are selling fast, so ensure you secure yours now.

The full interview with Melissa Mascioli will be published in the October edition of The Adviser magazine.

[Related: More lenders succumb to funding pressures]

Borrowers flocking to fixed rates amid rate hikes
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