Loan Rates Tumble

06 March 2015

Herald Sun, Lending, 6 March 2015

HOME loan rates have dropped to their lowest level in almost half a century after the Reserve Bank’s interest rate cut last month.

Mortgage rates fell to an average of 4.9 per cent after the cut, research shows. Those levels have not been seen since 1968.

Auction clearance rates have also surged to a six-year high, according to research house CoreLogic RP Data.

Home owners with a $400,000 mortgage in late 2011 — before interest rates started falling — paid about $27,200 a year in interest.

Now such households would have to pay $19,400, representing a saving of $150 a week.

Meanwhile, auction clearance rates in capital cities around the country surged above 76 per cent in the last two weeks of February, CoreLogic head of research Tim Lawless said.

Mr Lawless said with the housing market running so hot, the Reserve Bank and regulators faced the challenge of trying to keep a lid on soaring property prices.

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