At the moment whether or not to fix your home loan is the one million dollar question. New data suggests rapid rate increase’s for the next few years.
Commonwealth Bank Economist Savanth Sebastian points to the possibility of continued growth in the Australian property sector. Although this fly’s in the face of my personal opinion, what he has to say makes perfect sense.
Whilst paying tribute to the Rudd government and Reserve Bank’s aggressive fiscal and monetary policy for insulating Australia from the global financial crisis, he points to Australia’s fastest population growth in 40 years being a key reason for the buoyant property sector.
“In simple terms, more people translates to
increased spending and demand for homes, and as a result,
increased momentum for our economy”.
He also states: “Over the past two years an additional 77,300 people have called Australia home” and that: “The new data indicates why the demand for homes continues to soar and the supply of homes isn’t keeping up, ensuring that overall house prices remain robust.”
My opinion is that the RBA may ramp up their rate increase program on the back of this data. Fixed rates are generally a full 2% higher than standard variable at the moment so the Banks already factored in a substantial rise.
If you are already on a tight budget, you may well be advised to enquire with your lender regards your options. I for one will not be fixing, but do your sums.
Can you tell me that what kind of loan do you get to fix up a new home you just purchased?I am purchasing a foreclosed home and the previous owners took the kitchen cabinets and counter tops. Now my banker says I can't get additional money to purchase what i need to fix the kitchen. So my question is where do I get a loan for that?.