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Rising rates to drive refinancing activity in 2010

by Staff Reporter7 minute read
The Adviser

Three rate rises in the final months of 2009 with further increases expected in 2010 will prompt an upswing in homeowners looking for a better mortgage rate according to Resi's Head of Consumer Advocacy, Lisa Montgomery.

"With rates now widening between loan providers and some borrowers feeling frustrated at an absence of customer empathy from their lender, now is the ideal time of year to decide whether you can work within the features of your existing mortgage to improve your cash flow," Ms Montgomery said in a statement.

The cash rate increased by 75 basis points in three consecutive quarter per cent rate rises between October and December this year however some borrowers have seen their mortgage rates rise even further.

Most lenders, with the notable exception of NAB, have already increased their mortgage rates above the RBA as funding costs continue to rise

AMP has forecast that the cash rate will hit 4.75 per cent in 2010 though the banks are likely to continue to push above the RBA.

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