The recent spike since the election of Donald Trump has seen a tripling in inquiries for fixed rates and fueled by recent rate hikes by lenders.
During the GFC there was a flight to safety when borrowers were just worried and they went to the lenders who they knew, the big four in particular, and moved away from the small lenders.
It is a lot different now and we're seeing a flight to certainty. There's comfort in knowing what they are doing after all the shocks of 2016. Just by taking out a fixed rate, they are making a saving against their lenders variable rate, often up to 50 bps on a 3 year fixed rate. It is a smart move as it gives them the certainty of safety and a rate discount.
The shocks to the global economy including Brexit and Donald Trump’s presidency, have left borrowers asking “what is going to go wrong next”?
Many of our clients are pessimistic about the economy and taking a brace for impact approach with their finances. So much so, we continually see our clients knuckling down and paying off their credit cards, personal loans and home loans.
We believe it is best to have your fingers in a number of pies at the moment … so what we're finding is that a lot of clients will go for a split, a variable split, a three-year split just to give them extra security.
As we see it, a client’s circumstances, is of critical importance when considering whether to fix or go with a variable loan.
This information is current as at 14/12/16 This article has been prepared by Heart1Stop, a social media brand owned by Heart Mortgage Services and Heart Financial Advisers. The information contained in this article is an overview or summary only and it should not be considered a comprehensive statement on any matter nor relied upon as such. The views expressed here are not those of Heart1stop, Heart Mortgage Services, Heart Financial Advisers, shareholders, directors or staff and associated contractors and business associates. This article has been prepared without taking into account any person’s objectives, financial situation or needs. Because of this, you should, before acting on any information contained in this article, consider its appropriateness, having regard to your objectives, financial situation or needs. Any taxation information contained in this article is a general statement and should only be used as a guide. It does not constitute taxation advice and is based on current laws and their interpretation. Each individual’s situation may differ, and you should seek independent professional taxation advice on any taxation matters. While the information contained in this article may contain or be based on information obtained from sources believed to be reliable, it may not have been independently verified. Where information contained in this publication contains material provided directly by third parties it is given in good faith and has been derived from sources believed to be accurate at its issue date. It is not the intention of Heart1Stop or Heart Mortgage Services and Heart Financial Advisers that this publication be used as the primary source of readers’ information but as an adjunct to their own resources and training. To the maximum extent permitted by law: no guarantee, representation or warranty is given that any information or advice in this publication is complete, accurate, up to date or fit for any purpose; and no party of Heart1Stop or associated entities as mentioned is in any way liable to you (including for negligence) in respect of any reliance upon such information. This article may also contain links to websites operated by third parties ("Third Parties") who are not related to Heart1Stop. These links are provided for convenience only and do not represent any endorsement or approval by us.