After a lengthy period of no change or downwards movement in the OCR ( Official Cash Rate), now the reverse has happened and the rate went up at the last review. Is this it for a while, or can we expect more increases and frequently?
My guess is you can expect more increases this year. Most Economists are suggesting up to a 1 percent increase in rates in 2014 and similar increases right through to 2016. We have already had quite a few enquiries regarding how best to structure loans. It is very realistic to think that in the not so distant future floating interest rates will be above 8%.
While the variable rate was a good bet in the past, now a bit more certainty is desired i.e. we’re finding our clients want to know what the interest repayments are so they can work around them without unexpected surprises.
There’s no doubt variable loans have been the way to go for quite some time and if you had variable loans you were more than likely paying less interest than the fixed rate loans.
However, now the fixed rates are proving a better bet especially for terms up to three years. It’s time to get in contact with us.
Contact Matt Power