As speculation mounts about a soon-to-end fixed rate honeymoon, a national mortgage broking group is advising mortgage holders to reconsider their options. 

Smartline Personal Mortgage Advisers executive director Joe Sirianni claims that fixed rates are either at or very near the bottom. 

“There are growing suggestions from some lenders that they will start to raise fixed rates, while some have already made the move in recent weeks,” Sirianni, said. 

Sirianni added that people looking to capitalise on still historically low rates need to be aware that the rate they decide on now may not be the rate they end up getting when the loan is settled. 

“The interest rate is fixed at the time of settlement, not at the time of application. It’s largely misunderstood by banking consumers and is one of the main areas of complaint to lenders and the Financial Ombudsman,” he said. 

By way of example, Sirianni said that an investor who buys a property in mid-April but settles in mid-June will pay the prevailing interest rate as of June, not April. This could work in their favour if rates drop, not so if rates increase. 

For those wanting the certainty of knowing the rate they will have at settlement, Sirianni suggested a rate lock as a consideration, although he pointed out this option had drawbacks of its own. 

“As always, seek advice relevant to your individual circumstances,” he said.

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