Investors warned: 85 lenders have upped fixed rates

While Property Observer previously reported about the Big Four upping their rates on certain fixed products, it appears that new data shows a number of lenders upping their fixed home loan rates under the radar of many.

As investors wonder if they should be fixing soon or risk missing the bottom of the rate cutting cycle, RateCity's latest data pointing to 85 lenders increasing the fixed rates since early October, has CEO Alex Parsons saying they've missed it already.

Longer term fixed rates, such as five year terms, were the first to be adjusted upwards, with shorter terms now following the pattern, said Parsons.

“Fixed rates appear to have bottomed out and are now starting to rise, with 85 lenders increasing some of their fixed rates in the past month,” he said.

“We know fixed rates usually start to rise well before variable rates, and borrowers often miss the lowest point. After all, the banks have a far better chance of predicting future rate movements than the average borrower.”

With fixed rates still below the long-term average, he said that there are still opportunities for those looking to fix soon, with data pointing to a three-year fixed rate average of 5.09%, but possibilities of rates as low as 4.69%, and down to 4.29% for one-year terms. The historic average of three-year fixed rates is 6.94%.

“Fixed rates are starting to go up and it’s likely they will continue to do so. But there is no guarantee they will continue on an extended upward trend – it’s always a bet between you and bank,” said Parsons.

“People often fix their interest rates out of panic; in the lead up to the GFC, fixing got progressively more popular as rates increased, to the point where one quarter of new loans were fixed at over 9% in March 2008.”