Fixed rate home loans to rise

Sixty percent of new fixed rate home loans in Australia are expected to rise in the next week, according to comparison website, RateCity.

The research found that most fixed home loans are now up for review, because they were last re-adjusted in June 2009.

The increase in fixed rates should provide more work for mortgage brokers with consumers shopping around for the best rate.

Borrowers who have just applied for a home loan and are waiting for settlement or are rolling over a loan from refinancing may be caught out with a higher fixed rate, warned RateCity CEO Damian Smith.

Last week Westpac, St George and Bankwest all increased their fixed rates by up to 0.45%, setting a new benchmark for three to five-year fixed rates to 7% percent and above.

The market rate for a three-year fixed home loan is currently 6.89%, a four-year fixed market rate is 7.24% and it is 7.59%.

Related stories:

Fixed rate mortgage demand stagnates - Demand for fixed rate mortgages has remained at only 8% of all loan approvals for the second month in a row, according to July data from Mortgage Choice.