By Brad Makivoy | July 11, 2017
Mortgage holders have had plenty of good news about their interest rates the past few years. But with the economy improving, some are saying that this could all be about to change.
Former Reserve Bank of Australia (RBA) board member and Economist John Edwards is predicting as many as 8 separate interest rate hikes over the next two years.
This would potentially force the average standard variable rate to a whopping 7%!
What could bring about such a big change you ask?
Edwards’ logic is pretty simple, the RBA’s cash rate, which strongly influences your home loan rate, is currently even lower than after the worst of the Global Financial Crisis. He believes that as the impact of this event fades, so does the need for low interest rates.
If he’s right, and the Reserve Bank starts pushing rates up, the knock-on effect will likely be that banks will also increase their interest rates to us to service the difference.
Locking in Record Low Rates with a Fixed Rate Home Loan
Many Aussies have already started switching to fixed-rate home loans to protect themselves from potential interest rate hikes.
You see, in the past, variable rate home loans made a lot of sense. With rates only heading further down, it was important to have a home loan that would adjust with the market and pass on the savings.
With talk that interest rates have bottomed out, this equation changes.
Switching to a fixed rate loan means you can lock in an interest rate at the current record lows and protect against any hikes that might happen in the near future.
Is Switching to a Fixed Rate Right For You?
Fixed rate home loans aren’t for everyone, and it’s important to go through all the options before making a decision to move onto a fixed rate loan package.
At Savings Hacker, we’ve made this simple. We offer a simple and free way to get a full comparison of your options, as well as advice from professional, hand-picked home loan specialists.
Find out if you could save money by switching to a fixed rate loan, review your home loan now!