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Markets Today: Stocks rally hard; Fixed rates now attractive for local borrowers

Posted by medicalfinancial on 18 April 2012

There was some interesting commentary from Robert Henderson one of NAB Economists about mortgage fixed rates this morning. A link to the full article is below:

http://www.medicalfinancial.com.au/images/120418NABdailyeconomicupdate.pdf

His comments of interest:

It now looks like the RBA is intent on cutting interest rates when it next meets, the only potential hurdle an outsized CPI rise, if yesterday’s April Board Minutes are any guide.  But don’t expect fixed term borrowing interest rates to fall further because the likely 25 basis points May cut is already almost fully priced into the market.  By March of next year, nearly 1% of cuts are priced in (96bps).  Consequently, For borrowers, 3 year rates are pricing an aggressive easing cycle - fixed rate borrowing has become very attractive again.  History says this window of opportunity could close rapidly.

If you would like to discuss this or any other financial matter please contact us.

Author: medicalfinancial
Tags: Website News

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