If, like most homeowners in Victoria, you’ve been keeping one eye on home loan interest rates, you’ll be aware that most of the news coming out of the Reserve Bank has been suggesting that we are unlikely to see any increase in official rates for at least a couple of years.
However, history has taught us that the Banks have been known to act independently of the Reserve Bank from time to time, and we saw another example of this independence during the week.
In case you missed the news, Westpac has announced that it is lifting the interest rates on its four and five-year fixed rate home loans, adding 0.3 to their published rates. This means that what was one of the cheapest fixed rate deals in the market has now moved from 1.89 to 2.19 per cent on a four-year fixed-term loan, while their five-year rate has now moved to 2.49 per cent.
Whilst this move by the second largest home lender in the country is not a caused for immediate concern, some observers are suggesting that move be the first of a trend among the major lenders after a period of competitive tightening of interest rates in the search for additional business.
Of course, if this move has got you wondering if now is the time to lock in the interest rates on your own home loan, it is important to consider your own situation and plans for the future before making a move.
On one hand, if you currently have no immediate plans to sell or move to another property, this is certainly a good time to be shopping around for the best home loan deal, particularly if you haven’t looked at what is available for several years. After all, there is no harm in having a chat to an experienced, independent mortgage broker to find out what refinancing deals are available in the current market and discussing whether locking in at least part of the loan on a fixed rate will bring you real savings.
However, if you are currently in the process of looking for your next home, whether you are a first-time buyer or upgrading, you would be well advised to exercise a degree of caution until you know you have your next purchase approved and fully funded. Given the time delays that many home loan applicants are currently experiencing, the time between signing your contract and settling your new purchase is probably not the time to be rethinking your financial commitments.
Keep in mind that no matter how good your relationship is with your bank, we would always recommend that you talk to an experienced and objective mortgage broker before finalising your plans. Not only can they save you money on your interest repayments, they can also help you find a loan that will best match your specific priorities and plans.
Of course, when it comes to getting experienced and objective advice on your next property sale or purchase, the team at Ian Reid are ideally placed to assist you in every aspect of your property dealings, so why not give us a call on 9430 0000 today to talk about your options?
You’ll also find lots of helpful tips in our free booklet, “Fatal Real Estate Traps Exposed”.