(15 April 2011 – Australia) Thousands of mortgage holders would be freed from their three year fixed interest rate mortgage in the next month.More than 100,000 homeowners had taken on their loan rate of more than 8 percent and missed out on the sharp cut in interest rates by the Reserve Bank of Australia (RBA) during 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 percent 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 percent from a near record low of 3 percent, it is still well below the level when a fixed-rate loan was taken out in 2007/08.
This year the loan market had a 30 percent jump in inquiries to move out of a fixed rate loan.
Mr Rushton said the good news for those applying now is that they are entering a competitive market where lenders have a range of special offers and rate discounts.