The prospect of future mortgage rate changes is already weighing on new home buyers' minds, with some purchasers choosing the certainty of a fixed rate repayment.
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Recent home buyers Matt Van Dyk and Bec Tuddenham, who purchased a house in Jerrabomberra, said a potential rise in interest rates was a key factor in how they structured their mortgage.
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They chose to take a split mortgage, with the majority of the repayment at a fixed rate which currently sits above variable rates with major lenders.
They were aware that fixed rates had been rising since late 2021, and wanted to lock in a low figure now before rates grew any further.
But they also wanted to take advantage of some of the features that are typically only available with a variable rate mortgage.
"We have a little bit of it on a variable just so we can have an offset account and pay a little bit extra off while [interest rates are] low," he said.
It's a sound strategy, according to Canstar finance commentator Steve Mickenbecker.
"Whatever the timing of rate increases, the time for building buffers is now while interest rates are still low," he said.
"Borrowers with capacity have the opportunity to bring forward the impact of the interest rate increase by lifting their repayments. This means they can knock down the principal owed, rather than just putting the extra funds into interest payments when the rate increases actually bite."
Mr Mickenbecker said that redraw or offset facilities would allow borrowers to access these funds in the future if they fell on hard times.
Mr Van Dyk said that the experience of securing finance had taught the couple to shop around and to not be afraid of negotiating with lenders.
"We definitely compared interest rates and went for the cheaper option," Mr Van Dyk said.
The pair said after locking in their rate, the bank increased the interest rates just before their South Jerrabomberra property settled.
"It did get stressful there, but Nick [Lucey of Nest Advisory Group] kind of talked [the bank] back down to where they were," he said.
"So interest rates did play a big role because it almost made us leave [the bank]."
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While they've bought some breathing space for now with their fixed rate, Mr Van Dyk said the couple would likely look at refinancing in the future.
"We're happy for now, we'll definitely look to refinance every one or two years to chase a better interest rate. Sometimes [banks] will give you a cash figure to refinance with them ... so that's the stuff we'll be looking for in a year or two."
Economist Saul Eslake explained that while it was difficult to track the number of new borrowers who had opted for a fixed rate mortgage, anecdotal evidence pointed to a rise in fixed rate lending during the pandemic.
"Traditionally, most Australian mortgages have been at variable or floating rates, in contrast to the US, for example, where almost all mortgages are at fixed rates. But fixed rate mortgages became much more popular after the onset of COVID-19 when bond yields and hence fixed rates fell more than variable rates," Mr Eslake said.
"For example three-year fixed rates fell to 2.14 per cent to 2.15 per cent, according to the RBA's website, in [the months of] April, May and June last year, when the standard variable rate was 4.52 per cent - but since then they've risen to 3.17 per cent," he said.
While some borrowers on a variable rate mortgage would struggle with future increases, Mr Eslake said that fears of rising rates leading to distressed property sales were unfounded.
"There may be some borrowers who won't be able to cope with higher rates, but I would expect those numbers to be very small," he said.
"Remember lenders are supposed to 'stress test' applicants for mortgages by assessing their ability to maintain repayments in the event of rates rising by 3 percentage points from their actual level ... So if banks and other lenders have been abiding by those rules there shouldn't be many borrowers who can't cope with rate rises of less than 1 percentage point in total."
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