The recent spike since the election of Donald Trump has seen a tripling in inquiries for fixed rates and fueled by recent rate hikes by lenders.
During the GFC there was a flight to safety when borrowers were just worried and they went to the lenders who they knew, the big four in particular, and moved away from the small lenders.
It is a lot different now and we're seeing a flight to certainty. There's comfort in knowing what they are doing after all the shocks of 2016. Just by taking out a fixed rate, they are making a saving against their lenders variable rate, often up to 50 bps on a 3 year fixed rate. It is a smart move as it gives them the certainty of safety and a rate discount.
The shocks to the global economy including Brexit and Donald Trump’s presidency, have left borrowers asking “what is going to go wrong next”?
Many of our clients are pessimistic about the economy and taking a brace for impact approach with their finances. So much so, we continually see our clients knuckling down and paying off their credit cards, personal loans and home loans.
We believe it is best to have your fingers in a number of pies at the moment … so what we're finding is that a lot of clients will go for a split, a variable split, a three-year split just to give them extra security.
As we see it, a client’s circumstances, is of critical importance when considering whether to fix or go with a variable loan.
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