Fixed Mortgage Rates
House prices could jump 17% in 2021 and mortgage rates are set to rise much sooner than expected, ANZ Bank has tipped.
How much earlier than expected?
Well, the Reserve Bank has repeatedly said the official cash rate isn’t likely to increase for a few years, but ANZ senior economist Felicity Emmett believes fixed-mortgage rates have already reached their lowest point, or close to it.
In recent times, more than 30% of new loans have been at fixed rates, says Ms Emmett, with two to three-year fixed-term interest rates available below 2%.
But that’s unlikely to be the case for much longer, she believes.
“In the second half of the year these sub-2%, three-year fixed rates that we’re seeing advertised at the moment are less likely to be around,” says Ms Emmett.
“Cheaper funding is not available forever and that will feed through into variable mortgage rates too.”
Shane Oliver, Chief Economist at AMP Capital, also believes fixed mortgage rates “have already started to bottom out”.
“It’s likely that the 30-year tailwind for the property market of falling interest rates has now run its course and longer dated fixed rates (4+ years) are starting to rise,” adds Mr Oliver.
Wait, did you say ANZ is tipping property prices to increase 17%?
That’s right. ANZ economists expect house prices to rise by a “sharp” 17% across the capital cities in 2021.
They’re tipping Sydney and Perth to perform best with 19% growth, followed by Hobart (18%), Melbourne and Brisbane (16%), and Adelaide (13%).
ANZ’s forecast is much more bullish than those of Commonwealth Bank and Westpac, which in February predicted price increases of 8% and 10% respectively.
Ms Emmet says low housing stock levels are combining with FOMO (fear of missing out) to help drive up the market.
“Buyers are taking advantage of historically low interest rates, particularly fixed rates, as well as various government support programs,” Ms Emmet said.
Got a bit of FOMO yourself?
After the relative hibernation of last year, there’s certainly a lot going on in the world of property and finance right now.
So, if you’d like to chat to us about financing a new home you’ve got your eye on, or refinancing your existing loan, get in touch today and we’ll help sort out that FOMO for you.
Do you think you have got the best finance deal?
Our experience tells us, that even if you think you have, you may not. As previous clients of JEM Finance Group have discovered, after Jonathan took control of the negotiations for their finance needs. You have nothing to lose, call Jonathan at JEM Finance Group 1300 574 774.
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Jonathan Streater – Director JEM Finance Group | Finance Broker Sydney
Over 20 years experience in the finance industry specialising in Credit Risk and Relationship Management. Employed by one of Australia’s top four banks as State Manager in the Corporate Credit Risk field. I have extensive knowledge across all industry sectors.
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