Interest rates to stay low for 12 months: Smartline

Another 12 months of low interest rates are on the cards, with no increase expected until around February 2015, predicts Smartline Personal Mortgage Advisers.

With some lenders easing their fixed interest rates in recent weeks, the current prediction is that there is unlikely to be any change until next year.

Smartline’s executive director, Joe Sirianni, said that the indicators point to a long period of historically cheap variable rate home loans.

“Those with an owner-occupier property have the opportunity to make some serious inroads into their outstanding mortgage...”

“Even if rates do rise in early 2015, predictions are that this will be only a 0.25% increase, which will still mean rates will be at some of the lowest levels ever seen,” said Sirianni.

There have been some predictions that fixed rates would increase soon, however non-major lenders appear to be reducing their rates increasingly, outpacing the major banks.

“This is not an insignificant difference,” Sirianni said.

“Someone with a $300,000 mortgage would be more than $900 a year better off over the three year period simply by choosing 4.74% per annum rather than 5.09%.”

Sirianni said that these figures, such as variable rates available at 5% per annum, are allowing investors to find properties that provide a return greater than interest costs.

“Those with an owner-occupier property have the opportunity to make some serious inroads into their outstanding mortgage balance by paying off extra while rates are so low,” he said.

“Those who want to maximise the opportunities associated with the current economic environment should be seeking quality mortgage advice on the best approach for them.”