Rate Hikes Pushes People to Online Lenders
Due to hiked variable rates from the three of the big four banks, many homeowners are pushed to go to challenger lenders such as Reduce Home Loans to be able to keep up with their budget. “Online lenders have been giving the big banks a run for their money for a while now and with the majority of the big four increasing their rates, it’s put a bad taste in the mouths of customers,” said Mozo Product Data Manager, Peter Marshall.
Aussies who are looking forward to purchase their first home this year are now reluctant whether to fix their mortgage to protect themselves from future rise of rates. However, while fixing your home loan might sound like the right way to go, according to Marshall, unless you’re in it for the long haul, it might not make that much of a difference.
“If you’re after certainty or the assurance that your rate won’t change, then a fixed rate could be a good option – but you might have to pay a premium for it,” he said. “Lenders have started to price in a potential cut to the cash rate this year, particularly for their longer-term rates, so if you’re after certainty in your repayments over the longer term there are some sharp deals around.”
3.89% is the average variable rate for a basic loan without an offset account for the big four while Reduce Home Loans’ Rate Lovers product is 3.44% making them a hot pick for Aussie buyers.