Thousands freed from high fixed-interest rate loans

Apr 15 2011 / 4:32 am Was written by Atwell & Co. Comments Off

MORE than 100,000 homeowners will be sighing with relief that their three-year fixed-rate mortgage has run its course.

This group would have taken on their loan at a rate of more than 8 per cent and missed out on the sharp cut in interest rates by the Reserve Bank during the heat of the global financial crisis.

Mortgage broker Loan Market chief operating officer Dean Rushton said many of these borrowers are now coming off their fixed rate terms and looking to obtain a lower interest rate.

“Thousands of people who fixed their rates during 2007 and early 2008 when the cash rate reached 7.25 per cent have had to sit back and watch interest rates drop dramatically to combat the GFC,” Mr Rushton said.

He said that while the cash rate has crept back to 4.25 per cent from a near record low of 3 per cent, it is still well below the level when a fixed-rate loan was taken out in 2007/08.

The loan market has witnessed a 30 per cent jump in inquiries this year to move out of a fixed rate loan, most of which had been stuck at a rate obtained in 2008, he said releasing these findings on Thursday.

“The good news for these borrowers coming off fixed rates is that they are entering an extremely competitive market where lenders are wooing customers with a range of special offers and rate discounts,” he said.

Article – News.com.au

Read the full article here : http://www.news.com.au/money/property/thousands-freed-from-high-fixed-interest-rate-loans/story-e6frfmd0-1226039134600

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