Australian home buyers who opted for fixed-rate mortgages have enjoyed greater savings compared to those that took out variable rate loans, The Australian reported.
According to Mitchell Watson, analyst at financial services firm Canstar, borrowers with an average 25-year loan of AU$300,000 (S$379,045) who fixed their mortgage in October 2009 would have saved AU$2,760 (S$3,487) in interest.
“Had borrowers fixed their loan in October 2009 rather than staying in a variable loan they would have saved AU$2,760 (S$3,490) in interest costs,” said Watson, adding that “in October 2009 the average variable rate of major banks was 5.78 percent and the average three-year fixed was 7.12 percent”.
The Australian Bureau of Statistics (ABS) stated that up until August this year, 12 percent of first-time home buyers took out fixed-rate mortgages, compared with just five percent in 2009.
Moreover, the number of homeowners who locked in their interest rates peaked at over 20 percent during the 2008 global financial crisis.
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