Mortgage interest spikes following RBA cut

by Phil McCarroll28 Sep 2016
Property buyers have responded positively to the Reserve Bank of Australia’s (RBA) cash rate cut, with figures from one franchise showing a sharp increase in interest following the decision.

According to Aussie Home Loans, mortgage enquiries increased 27.7% over August to 16,585, with that momentum continuing through September as well.

“The RBA’s move to cut rates has certainly stimulated activity in the home loan market, and more borrowers are reconsidering their options since lenders did not pass on the full rate cut,” Aussie Home Loans chief executive officer James Symond said.

“With fixed rates now at all-time lows I urge borrowers to seriously consider fixing if they intend to stay in their properties for another five years or more,” Symond said.

According to Aussie’s figures, its four and five-year fixed rate Aussie Select product has generated the most enquiries, while its two and three-year offerings have also proved popular. Aussie has recently cut the interest rates for both sets of products to below 4%.

While some borrowers appear to be on the hunt for a better deal following the RBA decision, Symond said he believes they’re likely to cost themselves if they choose to go without a broker, especially as he believes Australia’s mortgage market is only going to become more complicated.

“The rate cut should not cause borrowers to load up on their mortgages, but precipitate a move to take advantage of the rate cuts and squeeze their lender for a better deal through the use of a mortgage broker,” Symond said.