Nervous borrowers looking to lock in

by Adam Smith20 Mar 2012

Wary borrowers are locking in their rates as the gulf between the banks and the RBA widens.

A Loan Market poll has asked borrowers if they will consider fixing their rate given recent decisions by the RBA and the ensuing rate changes by lenders. The survey found 60% of respondents were considering a fixed rate.

The poll indicated 46% of respondents were definitely looking to fix their home loan rate, while 14% said they would consider fixing part of their loan. Thirty-six per cent said they would eschew fixed rates altogether.

A Loan Market spokesman said out-of-cycle moves by the banks have left consumers shaken.

"The banks acting independently of the RBA and lifting their variable rates has caused quite a bit of concern and confusion among consumers. Home loan customers are uncertain about the direction rates are heading while the RBA has left the cash rate at 4.25%, yet the banks increased their variable rates by modest amounts," he said.

The spokesperson commented that the combination of attractive fixed rates and ongoing uncertainty over the European debt crisis could cause borrowers to flock to fixed rate products.

Related stories:

Fixed rates creeping up

Fixing falling out of fashion

Fixed rate frenzy easing off