With lots of speculation at the moment about whether the RBA will make its first cut since December 2011 and reduce the cash rate from 4.25%, its been interesting for me to see over the last couple of weeks the competition hot up amongst many second tier lenders over the last few weeks in the fixed interest rate space.
In light of this I thought it would be good to look at historically how low fixed rates have gone in the last few years, as I’ve never fixed my interest rates before and I seem to remember that fixed rates went to the mid 5s% at the height of the GFC. And based on recent history this is as good as residential mortgage rates have ever got!
Right now you can get fixed rate deals from a number of banks and non-bank lenders around or just under 6%.
The lowest the cash rate went during the GFC was in April 2009 when it dropped to 3%.
From that point the standard variable interest rate fell from 6.85% in April 2009 to a low of 5.55% in December 2009.
I found it a bit hard to find aggregated data on the movement in fixed rates, however CBA historical 1 year fixed rates were 5.39% in March 2009 but by October 2009 had moved to 6.64%.
With standard variable rates sitting at around 7.4% now and the cash rate at 4.25%, if fixed rates move any lower towards the mid 5s, maybe they are worth a bet? Watch this space…