Tiimely cites economic uncertainty for unexpected uptick in fixed-rate lending
- Online lender Tic:Toc has reported a surge in the demand for fixed rate mortgages.
- Home buyers may be concerned that the cash rate will continue to increase, pushing out variable rates.
- Market-wide, fixed-rate home loans made up just 4% of new mortgages in October.
Market-wide, ABS data shows around 4% of home loans written in October - both new and refinanced - were on fixed interest rates.
This represents a steep slide from mid-2021 when nearly half of new home loans were on fixed rates.
Tiimely has cited an uncertain economy as the reason many borrowers looked to fix in November.
The RBA has raised the cash rate for eight consecutive months, up 300 basis points, in the fastest rate of hikes since 1994 when there was 375 basis points' worth of tightening.
Many experts, including analysts from Westpac, NAB, CBA and ANZ, anticipate interest rates will continue to rise in the first half of 2023.
Inflation, which remains at over 7%, falling house prices and the cash rate hikes could all be contributory factors in a surge in demand for fixed mortgage rates.
This is despite fixed interest rates generally being markedly higher than variable rates as seen in the graph below.
Yet for Tiimely, the uptick in demand for fixed rates is no surprise, with its head of marketing Laura Osti saying it was inevitable.
“The past year has seen interest rates increase at an alarming rate, going up by 3% since April,” Ms Osti told Savings.com.au.
“Combined with cost of living pressures, Australians are feeling the pinch on their monthly budgets.
“By locking in a fixed rate, Aussies are afforded a level of certainty and peace of mind for their finances, knowing if rates continue to rise, they will be protected.”
As at the end of 30 June 2022, Tiimely had nearly $2.8 billion in loans under management, with the bulk added in that financial year at $1.6 billion in settlements.
However, Bendigo and Adelaide Bank's loan book - of which Tiimely shares a banking licence - has shrunk by about $92 million in a month.
At the end of September loans on its books for both owner occupiers and investors amounted to $57.421 billion - by the end of October that figure was $57.329 billion.
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Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.94% p.a. | 5.98% p.a. | $2,978 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure | ||||||||||
5.89% p.a. | 5.80% p.a. | $2,962 | Principal & Interest | Variable | $0 | $0 | 80% |
| Promoted | Disclosure | ||||||||||
5.99% p.a. | 6.02% p.a. | $2,995 | Principal & Interest | Fixed | $0 | $0 | 60% |
| Promoted | Disclosure | ||||||||||
5.93% p.a. | 5.93% p.a. | $2,975 | Principal & Interest | Variable | $0 | $395 | 70% | Disclosure |
