new fixed mortgage rates have stayed below variable rates for several months and predictions grow that the cash rate has peaked.
“The current situation suggests an inflection point, where the market no longer expects interest rate rises to occur in the medium term,” he said. “Fixed rates are historically higher than variable rates when rate hikes are expected on the horizon,” Gilfillan said. She said it was unlikely that variable rates among the big four would return below 6 per cent until the Reserve Bank began cutting the cash rate.As banks raised their variable rates, the number of customers choosing to fix their home loans has risen, albeit from low levels. Gilfillan said the proportion of customers choosing fixed rates had doubled over the past three months to 9.
Banks have signalled their intentions to walk away from cut-throat competition in the past few months in an effort to protect their margins, and have been less generous in some of the discounts they are offering customers on variable-rate loans.