Media Release

Westpac rate hike fallout: 38% of Aussies to fix their home loan by July 2019

  • First big four bank to raise rates: Westpac increases interest rates by 14 basis points
  • Almost two in five mortgage holders will fix their home loan in the next 12 months
  • Consumers are encouraged to secure a rate with a three in front of it

30 August 2018, Sydney, Australia – Borrowers are flocking to fixed interest rates amid out-of- cycle rate rises, according to new research by finder.com.au, the site that compares virtually everything.

Almost two in five (38%) Australian mortgage holders are choosing to fix their home loan in the next 12 months.

Bessie Hassan, Money Expert at finder.com.au, said fixing rates was one way borrowers could mitigate risk in an uncertain mortgage market.

“Borrowers have been spooked by recent out-of-cycle interest rate rises, with Westpac, the first of the big four to do so.

“Now the question on everyone’s lips is – when will the others follow? My guess is sooner rather than later – expect other announcements in the coming days.

“As the threat of other lenders increasing their rates grows we expect to see more borrowers opting to lock in a fixed interest rate,” she said.

Hassan said a new benchmark had been set.

“Borrowers want a three in front of their home loan rate – and that’s the case for variable and fixed rates alike,” she said.

Three-year fixed rate loans available on finder.com.au:

LenderHome Loan productInterest rate
Community First Fixed Home Loan3 Years Fixed New Money offer

(Owner Occupier, P&I)

3.69%
UBank UHomeLoan3 Year Fixed Rate

(Owner Occupier, P&I)

3.74%
Suncorp Home Package Plus Fixed3 Year Rate

(Owner Occupier, P&I)

3.79%

source: www.finder.com.au

The latest Australian Bureau of Statistics (ABS) Census shows there are 2.86 million properties owned with a mortgage in Australia, meaning a potential one million borrowers are looking to fix their interest rate in the next year.

The other 62% plan to keep their current home loans, preferring to take a wait and see approach.

“While economists and experts are uncertain when the next cash rate change may occur, the majority are united in their forecast that the next move will be up – likely to occur in 2019.”

The fixed rate boom was being driven by those from New South Wales and Queensland where 45% of borrowers are opting for fixed rate home loans in the coming 12 months.

South Australians and Tasmania's are bucking the trend – where only 28% of mortgage holders are considering fixing.

Fast facts:

  • The average home loan is $396,600, and a 0.14 basis point increase means repayments will increase from $2,188 per month to $2,222 – equivalent to around an extra $34 a month or $408 per year.
  • In spite of the rise, good home loan deals are still around as big four banks have special offers with much lower rates.
  • Alternatively, there are many small online providers to choose a home loan from, with a handful of rates under 3.60%.

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For further information

Disclaimer

The information in this release is accurate as of the date published, but rates, fees and other product features may have changed. Please see updated product information on finder.com.au's review pages for the current correct values.

About us

More than 3 million Australians turn to finder.com.au every month to save money, time and make important life choices. We compare virtually everything from credit cards, phone plans, health insurance, travel deals and much more.

Our free service is 100% independently-owned by two Australians: Fred Schebesta and Frank Restuccia. Since launching in 2006, we’ve helped our users make more than 17 million decisions.

We continue to expand and launch around the globe, and now operate in the United States and United Kingdom. For further information visit www.finder.com.au.

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