Lenders are not hesitating to increase their variable mortgage rates in line with the Reserve Bank’s cash rate changes but they are increasing fixed rates by even more.
Comparison site Canstar reported that in the week ending 18 July, 28 lenders increased variable rates by an average of 51 basis points. At the same time, 17 lenders increased 300 fixed rate products by an average of 67 bps.
For an owner occupier paying principal and interest, the average one-year rate is 4.7 per cent, the two-year rate 5.38 per cent, the three-year rate 5.74 per cent, the four-year rate 5.92 per cent and the five-year rate 6.14 per cent.
All these rates are above the average standard variable rate of 4.05 per cent.
There are not many cheap rates in the market. The minimum rate in the Canstar database for one year is 3.49 per cent, for two years 4.39 per cent, for three years 4.79 per cent, for four years 5.19 per cent and for five years 5.19 per cent.
Aggregator AFG Financial Group reported earlier in the week that demand for fixed-rate borrowing has collapsed, falling from a peak of 38.2 per cent of loan type written by its brokers in the September quarter last year to 7.7 per cent in the June quarter.