Major Banks Flooded!
Low interest rates, tighter lending policy, first home buyer surge and shrinking non bank lender market have led to long delays within some major lenders processing areas. Potential buyers should be aware of these delays as they can cause unnecessary stress when purchasing a home, especially when there are cooling off periods and contract deadlines to adhere to. There are still a variety of lenders and loan products which borrowers can choose from, borrowers should investigate all options and confirm how long it will take for their application to be approved before selecting a lender.
Fixed Rates is it time?
Since September, the RBA has cut 425 basis points from the cash rate to spur growth in the economy. The current interest rate is at a 49 year low of 3%. With the Latest Rate cut of 25 basis points most banks only passed on a fraction of this to the customer with CBA and Westpac only cutting 10 basis points off the variable interest rates.
This week three of the Australian big four banks have increased their fixed mortgage interest rates, following National Australia Bank’s (NAB) lead last week in raising their fixed rates citing higher funding costs as the reason, despite expectations of further interest rate cuts by the Reserve Bank of Australia.
Commonwealth Bank has said that the rates on fixed interest loans ''reflect the recent increases in the wholesale market swap rates that the bank funds fixed term home loans from.''
Borrowers are enjoying generational low interest rates at the moment but should consider switching at least a part of their home loan to a fixed mortgage whilst fixed rates are still low.