If you’re currently in the process of applying for a mortgage, you’ve undoubtedly come face to face with the concept of interest rates. These additional fees are what banks rely on to provide them with a return on their investment. In 1990 the percentage was at a whopping 17.5% – the highest amount to have hit Australian banks in history.
There are a dozen of factors that can affect the way in which rates rise and fall; from the current state of the economy, to investments from third parties and external sources. But just how often do they change and is there a way to predict whether they will increase, or decrease?
Financial experts and their views on rates
For years now, financial advisors and mortgage brokers have been studying the rate market in an effort to learn how they can climb and drop. Over the years, many have learnt how to recognise the subtle signs that are often followed by a change in rates – and this is why we always advise our clients to obtain as much information as possible before agreeing to terms.
So, how frequently can you expect these rates to change? Well, it all comes down to what the Reserve Bank of Australia (RBA) decide to do each month. Every four weeks, their specialists will get together and review a variety of factors that may play a part in the economic climate for the month ahead. Due to Australia’s stable economy (one of the most stable in the world), it is not unheard of for months to pass without even the slightest modification to a rate.
If you are concerned about fluctuating interest rates and how they will affect your loan, having a fixed interest rate for your home loan may give you the security that you need as despite fluctuating interest rates, your interest will remain fixed, or the same, for the length of time you have fixed your rate.
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Disclaimer -This page/article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.