Brokers: Rate speculation "fuelled by media"

by BN09 Oct 2009

Brokers reacted to yesterday's bank interest rate rises and stronger than expected employment figures with cautious optimism. There was anger, however, at the role the mainstream media had played in stirring up public concern.

"With the media already out there predicting [another rate rise] it's hard to know what [the RBA] are going to do," said Graeme Inglis, principal at Smartline in Pennant Hills, NSW. "I think they've pushed [rates] up too early at the moment."

Lee Seabrook, principal at Aussie in West End, Queensland, blamed the mainstream media for worrying his clients. "A lot of it is fuelled by media," he told Broker news. "Information is good, but I just wish they'd give all of the information."

Seabrook said many clients had wanted to fix their mortgage after hearing reports of rising interest rates on television. None of those clients were aware that fixed rates were already higher than variable rates.
The savvy borrowers, Seabrook said, now opted for loans with low exit costs.

"I'm not in a position to be able to say [any lender] has a particularly good track record and they'll be good going forward," he said. "Let's just try to protect ourselves by having a low out-cost lender. That way you can say, 'If they don't play nicely, we'll move.'"

Inglis said rising consumer sentiment was reflected in the fact that unemployment fell in September from 5.8% to 5.7%. "People are getting more confident, that's for sure," he said. "Most people are comfortable on the variable rate - they're not too concerned about rates skyrocketing."


  • by Peter 9/10/2009 8:58:23 AM

    in relation to the article Rate speculation "fuelled by media" as a Financial Planner (and Mortage Broker), we have been dealing with the media in our industry for the last two years regarding "market Crash".

    I think mortgage brokers shouldn''t be concerned over rate rises if they have a great relationship with thir clients.

  • by John C 9/10/2009 9:12:05 AM

    I agree that the RBA has been too quick. They are relying on historical figures which have been artificially fuelled by the Rudd Government stimulus package. With the FHOG Extensions being removed by the Government, no more $900 handouts for the general economy, with money for loans in short supply for business, which means that businesses can''t grow, Business Investment Allowance being removed in December this year, with the rest of the world still in recession.... In my view the ability for Australia to recover from this recession has been put back by months even a year... I think the RBA should have waited until 2010 to put brakes on if it was warranted. It will be very interesting to see what Christmas trading is like this year.

  • by Derek Miles 9/10/2009 9:52:03 AM

    When talking to clients I use this great little fixed vs variable rate simulator to demonstrate whether it is worth fixing or not. It will calcualte the difference based on what clients perceive the variable rate to do over 5 years. We do not provide any assistance in predicting rates. It is a simulator only. I also give them my article called "To fix or not to fix" which outlines reasons why or why not to fix rates. See this article and simulator on
    Happy reading.