- 77% of fixed rate mortgage holders are stressed about higher repayments
- Mortgage rates might have peaked as lenders cut fixed rates
- 77% of borrowers want to fix their interest rate again if they could
With the fixed rate mortgage cliff looming for many Australian borrowers, a glimmer of hope has started to appear with an expert signalling that some lenders are cutting their fixed rates.
According to Mozo, while current interest rates of over 5% will still be a steep jump from the 2s and 3s that many people fixed at in recent years, there are some lenders that have started to offer lower fixed rates – a sign that they expect the Reserve Bank of Australia (RBA) to keep interest rates on hold.
Mozo’s banking expert Peter Marshall said, “This is a great example of competition in the market working for mums and dads. We have seen reductions in fixed rates on home loans of up to 0.6% by some of the smaller lenders in the past two weeks.”
“Competition is fierce right now so, if you are looking to fix your loan repayments, it’s well worth the ‘shoe leather’ to do some comparisons on our site, and to pick up the phone and drive a hard bargain with lenders.”
Borrowers feeling stressed
Research by Mozo found that 77% of people with fixed-rate mortgages are stressed about being able to afford their repayments when the fixed-rate period ends.
While only around a quarter of people are comfortable that they will be able to make the new level of repayments, with half of those having taken the opportunity to save more during the fixed rate period, or are bracing themselves to make budget cuts in other areas of their lives.
According to Mozo, over three-quarters (77%) of fixed-rate borrowers would like to fix their repayments again if the opportunity presented itself, particularly as a third (32%) believe rates are going to continue to go up.
However, a quarter want to lock in just for another year until the economic uncertainty we are facing now has passed.
