Experts predict that fixed mortgage rates will climb in the coming months.
According to ANZ Bank, house prices could soar by 17% in 2021, and mortgage rates will rise far sooner than projected.
What percentage of the time did you arrive earlier than expected?
Although the Reserve Bank has stated that the official cash rate would not rise for several years, ANZ senior economist Felicity Emmett believes that fixed-mortgage rates have already hit, or are close to, their lowest point.
According to Ms Emmett, more than 30% of new loans have had fixed rates in recent years, with two to three-year fixed-term interest rates accessible below 2%.
But, she says, that won’t be the case for much longer.
“These sub-2 percent, three-year fixed rates that we’re seeing marketed right now are less likely to be available in the second half of the year,” Ms Emmett adds.
“Cheaper finance will not be accessible indefinitely, and this will affect variable mortgage rates as well.”
Fixed mortgage rates, according to Shane Oliver, Chief Economist at AMP Capital, “have already started to bottom out.”
“It’s likely that the 30-year tailwind of dropping interest rates for the property market has now passed its peak, and longer-term fixed rates (4+ years) are beginning to rise,” Mr Oliver says.
Wait, did you say ANZ predicts a 17% increase in house prices?
That’s correct. House prices are expected to soar by a “sharp” 17 percent throughout the main cities in 2021, according to ANZ economists.
Sydney and Perth are expected to increase the most, at 19 percent, followed by Hobart (18 percent), Melbourne and Brisbane (16 percent), and Adelaide (14 percent) (13 percent ).
ANZ’s projection is far more optimistic than those of Commonwealth Bank and Westpac, which expected price hikes of 8% and 10%, respectively, in February.
Low housing stock levels, along with FOMO (fear of missing out), are helping to drive up the market, according to Ms Emmet.
“Buyers are taking advantage of record low mortgage rates, especially fixed rates, as well as a variety of government assistance programs,” Ms Emmet explained.
Do you suffer from FOMO?
Following last year’s relative dormancy, there’s a lot going on in the world of property and finance right now.
So, if you’d like to talk to us about financing a new house or refinancing your current loan, get in contact with us immediately and we’ll help you sort out your FOMO.
To learn more, contact Premium Finance Group Australia at (07) 4720 8888 or email us at email@example.com
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