With more than 40 lenders slashing the interest on their fixed rate products in the last month, now is the perfect time for borrowers to lock in a competitive fixed rate, several brokers have claimed.

Last week, data from RateCity found 46 lenders had slashed the interest on their three year fixed rate products since July – taking the average fixed rate home loan to its lowest level in over three years.

Westpac became the latest lender to drop, cutting 10 basis points from its three year home loan just last week.

With competition obviously increasing in the fixed rate space, many brokers are telling their clients to take a “good look” at the fixed rate home loans on the market.

Speaking to The Adviser, Aussie’s Matthew Rogers said fixed rates are now so low that borrowers wouldn’t be doing themselves a disservice if they locked in their mortgage.

“I tell my clients that if a fixed rate home loan has a five in front of it, then it is definitely worth considering,” he said.

According to Mr Rogers, many borrowers are doing just that, with almost 80 per cent of his clients currently “asking” about their fixed rate options.

“There are definitely a lot of people interested in fixed rates at the moment. I would say the vast majority of my clients are considering fixing if they haven’t already.”

Mr Rogers’ comments were echoed by Finance Made Easy’s Tony Bice, who said more clients are now open to the idea of fixing.

“I think clients are in one of the best environments seen for a long while when it comes to getting a great rate. Most clients these days understand the benefits of fixing their loan and the risks that go with this should rates continue to fall,” he said.

“If you can get a fixed rate under six per cent, you are doing very well.”

But it is not just brokers who believe borrowers would do well to fix their home loan.

Earlier this month, Suncorp’s general manager intermediaries Steven Heavey said the static cash rate has opened the door for clients to think about fixing all or part of their mortgage.

“The fixed rates on offer at the moment are incredibly competitive and borrowers would do well to lock in part or all of their mortgage,” he said.

THE ADVISER

Overall housing affordability has reached the "healthiest" levels since 2003, says the Housing Industry Association (HIA).

Overall housing affordability has reached the "healthiest" levels since 2003, says the Housing Industry Association (HIA).

A wave of rate reductions has forced fixed rate home loans to their lowest level in over three years.

According to new research by RateCity, 46 lenders have dropped their three-year fixed home loan rates since July, including all four major banks: ANZ, Commonwealth Bank, NAB and Westpac.

Westpac was the latest to drop its three-year fixed rate, cutting 10 basis points from its interest rate.

Of the 46 lenders, the average rate cut was 9 basis points, however eight lenders have cut their rates between 30 and 40 basis points.

RateCity spokesperson Michelle Hutchison said she expects more borrowers to take up fixed home loans this year

THE ADVISER

A majority of borrowers expect the Reserve Bank to cut the official cash rate again before the end of the year.

According to a new poll conducted by Loan Market Group, 64 per cent of home owners believe there will be another rate cut within the next few months.

Loan Market corporate spokesman Paul Smith said 46 per cent of respondents thought rates will drop by 25 basis points, 15 per cent expect rates to fall 50 basis points while three per cent predicted a cut of more than one percentage point.

Mr Smith said 36 per cent of the 865 online poll respondents said there will be no reduction in the current official rate of 3.5 per cent.

“Although many economic forecasters are tipping the RBA to stay on the sidelines, the consumer sentiment is clearly in favour of further rate relief,” Mr Smith said.

He said the 75 basis points reduction in the cash rate over May and June had been beneficial, but a cloud remained over the housing and retail sectors.

“The RBA has been keeping rate cuts in reserve in the event of any deterioration of the domestic economy or more bad news from Europe,” he said.

“But consumers would clearly like another helping hand from the RBA and rate relief could provide a welcome boost to their confidence in the lead up to Christmas.”

THE ADVISER

 BY JOHN MCGRATH - SWITZER BROKER

Published: Tuesday, August 14, 2012

The number of properties for sale in WA remains a big concern for analysts.

AUSTRALIAN BROKER ONLINE

A leading financial comparison site is urguing borrowers to beware "desperate banks" that will employ tactics to encourage spending, not saving.

Spokesperson Michelle Hutchison said the past two rate cuts were "a blow to lenders, which are already experiencing a tougher home loan market."

"Some lenders are getting desperate and we've noticed new tactics they are using which are encouraging borrowers to spend their money rather than save on their home loan."

"For instance, some borrowers with savings sitting in their home loan are being told they can absorb their savings by paying smaller than the minimum home loan repayments," she said.

She said yesterday's decision to keep the rate unchanged wouldn't deter banks from finding ways to recoup losses from previous cuts.

AUSTRALIAN BROKER ONLINE

The HIA has made an interesting U-turn, replacing its GFC-level low predictions with a positive assessment of the property market.

The HIA has made an interesting U-turn, replacing its GFC-level low predictions with a positive assessment of the property market.