David Friend’s Blog: The Lowest Interest Rates in History and What It Means for You

By: David Friend (Director)

Not in the 13 years that I have been a mortgage broker, have I ever seen interest rates as low as they are now. Even when the GFC hit, interest rates didn’t go this low.

When the RBA made the surprise announcement in May to cut the cash rate by 25 basis points to 2.75%, no one expected the banks to pass it on. One lender even passed on 27 basis points!

We have also seen a drop in the fixed rates with most lenders offering rates below 5% on their 3 year fixed rates. This is unprecedented! There are some three year fixed rates currently on offer at a record low of 4.94%.

This is extraordinary when we consider that traditionally variable rates are lower than fixed rates. At the moment, however, we’re in the unique position of having the 1-3 year rates lower than the variable rates. What’s more, there is so much uncertainty in the market and economy at the moment (with no real end in sight), that I would expect rates to remain this low for at least a few more years.

So what does this mean for you? Well, depending on your situation, it may be a great time to look at your structure and take advantage of the record low rates for at least a part of your borrowings. You can fix a portion of your mortgage with these terrific rates and take advantage of the amazing savings.

One thing to watch out for, however, is the pitfalls associated with going directly to the bank to take advantage of these rates. There are fees charged by different lenders (depending on the products), so it’s always better to utilise the professional services of your mortgage broker to ensure these fees are waived.

My advice is to book and come in for a free meeting so you can enquire about taking advantage of these massive savings and ensure you don’t get stung with hidden surprises. Call the office on 6260 7880 today.