Brokers lukewarm over ‘record-low’ fixed rates

by Caroline Dann03 Oct 2012

An Australian Broker Online poll has revealed brokers are uncertain about passing on fixed rates to clients.

 
Of the 153 votes, 32% said they would recommend fixed rates at the moment, 48% said no, and 20% sat on the fence with a ‘maybe’ response.
 
This overwhelmingly ambivalent response comes despite lenders scrambling to claim the ‘lowest rates’ in the industry.
 
Adelaide-based broker Cathy Anderson recently told Australian Broker Online the trick was to combine a fixed rate with variable for “flexibility.”
 
“It’s more based on affordability. If you’ve say got a $400k loan, maybe you should fix $300k and have the other $100k variable, so that you’ve got that flexibility,” she said.
 
Interestingly, ME Bank announced yesterday it was extending its fixed rate offer of 5.39% for one to three year loans, as demand was so high.
 
“Fixed rates have continued to be in high demand now jumping to 45 per cent of all applications, up from 14 per cent which we were experiencing earlier in the year,” said Ian Hendey, group executive sales at ME Bank.
 
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COMMENTS

  • by Incognito 3/10/2012 10:16:24 AM

    Does anyone know if we actually can recommend fixed or variable?

    Does that become financial advice, or as (MFAA) Credit Advisors / ACL holders can we now make these recommendations?

    I'm still hesitant to 'steer' the client on fixed vs variable.

  • by Peter 3/10/2012 1:46:17 PM

    As a Broker I need to look at teh COmparison rates. It has been interesting to note that 1-3 fixed rates are invariably higher than some variable rates! Why would I recommend them to my clients when the objective is to save money?