Brokers urged to be proactive during interest rate hold

Now is the time for brokers to be proactive with predictions by many financial experts that the official interest rate is unlikely to change in the near future, according to the Finance Brokers Association of Australia (FBAA).

Executive director Peter White said borrowers need to be assured their loans have not become unsuitable for their needs.

“One of the best things people can do is ensure the interest rate structure on their loan is suitable for their future and that’s where brokers can help,” he said.

Mr White said brokers can advise borrowers to consider their short to medium term plans in order to judge whether a fixed or variable rate loan is preferable.

“If they have no immediate plans to change their borrowing needs for renovations, extensions or the like for the next two to three years, fixing their interest rate for that period may be a good option with many fixed rates sitting at below four per cent.

“On the other hand, a part-fixed part-variable rate loan structure may be a good option if people want to hedge their bets on all fronts.

“The key is to wait for the best time to do it and that may be another six to ten months down the track.”

Mr White suggested that with all the uncertainties in the home loan marketplace, brokers are the best placed finance industry professionals to guide borrowers through the interest rate mire.