A warning has been given by the credit ombudsman of Australia in regards to home loans, stating the general public should think careful before fixing their home loans.
An increase of lower fixed rates released into the market has meant that more and more people have opted to fix their home loan rates.
Figures show that the amount of fixed-rate loans that were taken out in the month of September came to approximately 7.9% of the total loans for the month, compared with only 5.6% in the month of August.
While fixed-rate loans are frequently viewed as a great way of safeguarding one’s self against increasing interest rates, they could also have consequences. Although exit fees have been banned on new loans, loan providers could still impose break costs if borrowers decide to change lenders or loans early.
Break costs often run into thousands of dollars, so it is increasingly important that borrowers consider all options and do the right research to ensure they make the right decision. Speak to an expert today.