Drop In Fixed Home Rates Sparks Interest

Drop In Fixed Home Rates Sparks InterestHOME loan providers are offering fixed rate mortgages as much as 1.5 per cent below standard variable rates, prompting a rash of inquiries from potential customers.

Mortgage broker Loan Market said it has seen a 15 per cent increase in interest for fixed-rate home loan products in what is an unusual position in the market.

At the time of the Reserve Bank of Australia’s last official interest rate rise to 4.75 per cent last November, three-year fixed-rate home loans were around 0.5 per cent higher than most variable rates.

In the initial months of the global financial crisis they were almost two per cent higher.
“(This) highlights the extraordinary position the market is in right now,” Loan Market chief operating officer Dean Rushton said in a statement today.

In recent weeks, financial markets have been factoring in a strong chance of the next move in official rates being down due to a volatile international economic climate and sluggish domestic consumer confidence.

Read more: http://www.news.com.au/money/interest-rates/drop-in-fixed-home-rates-sparks-interest/story-e6frfmn0-1226120472028