Coast residents secure in fixed rate option
Mon 17 March 2008
Carolyn Garner, Bachelor of Journalism
Interest rates have risen again, but some Sunshine Coast residents are not feeling the sobering effects after opting for fixed rate home loans.
Prime Minister, Kevin Rudd, announced another rise to 7.25 per cent on behalf of the Australian Reserve Bank, which is a 12 year high, adding an average of $50 a week to a $300,000 home loan.
In this period of uncertainty about how high interest rates will rise, potential new home buyers are choosing fixed interest rates rather than the fluctuating variable rates as a security measure.
Fixed rate home loans are proving to be a secure choice among current and future home buyers on the Sunshine Coast.
Sunshine Coast first home buyer, Jessica Parkes, said the recent interest rate hike has not influenced her decision in buying her first home, saying that she will be opting for a fixed interest rate.
“The rise in interest rates has not affected my decision (to buy a house). I am just going to have a fixed interest rate… It is more expensive, but it is better than not knowing how high the rates will rise,” Ms Parkes said.
Queensland Property Finance managing director, Adam King, told the Sunshine Coast Daily there is a growing trend for fixed interest rates among Coast home buyers.
“People are definitely concerned with rates going higher and are choosing to fix their loans, but we always ensure to present our clients with every option available to them and we tend to err on the side of caution,” Mr King said.
Former Real Estate agent and home owner of five years, Leanne Gilkes, said she bought her home under a fixed interest rate and has not felt the effects of the rise.
“Having a fixed interest rate is absolutely the only way I would ever buy a house now-a-days...I just want to know that I can make the repayments in the future, rather than getting a cheaper rate now.” Ms Gilkes said.
“Home-buyers often go for this (fixed-interest loans) because from day one they know they will be able to afford repayments, but if the rate keeps going up they may not be able to afford the repayments,” Mr King told the Sunshine Coast Daily.
Property publication, LandMark Byte, said the housing market has endured mixed results since last year’s rise.
“The lower market segment, under $500,000 has been performing reasonably well, particularly in older suburbs, yet the mid and upper segments have been showing more subdued levels of demand,” the publication reported.
Economists warn there may be future rises later this year.
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