But many will have missed the boat. Commonwealth Bank joined Westpac Monday in pushing up its fixed rates by as much as 0.60 points.
As recently as December when variable rates were plummeting fixed-rate mortgages were all but unsaleable. Official figures released yesterday show that the proportion of new mortgages fixed for two years or more slid to 1.9 per cent, the lowest in the two decades since fixed rate products came to Australia.
But as the Reserve Bank slowed down its program of rate cuts in the new year the proportion began to rebound, passing 4 per cent in April, 6 per cent in May and 8 per cent in June. In that month 5,452 mortgages were fixed, the most in a year and five times as many as in December.
JP Morgan economist Helen Kevans believes the boom has further to run...
"On top of speculation that the official cash rate already has bottomed, there's widespread concern that the banks themselves will continue to raise their variable rates independent of the Reserve. With most economists, including us, expecting the next move in the official rate to be up, more and more borrowers will lock in their loans."
But loan broker Mortgage Choice believes the rebound may already be running out of steam.
"Lenders are pushing up fixed rates to the point where they are now much higher than variable rates," said corporate affairs manager Kristy Sheppard. "Our average rate for three-year fixed loans has hit 6.71%, which compares to 5.49% for a basic variable loans. The difference in repayments could be $200 per month."
The Commonwealth Bank yesterday matched Westpac in pushing up its rates on fixed loans by between 0.15 and 0.60 percentage points.
The biggest jump was in the cost of its two-year loans which climbed from from 5.94 per cent to 6.54 per cent. Its longer-term 10 year and 15 year fixed mortgages now cost 8.39 per cent and 8.44 per cent.
Australia's banks remain by far the biggest mortgage lenders writing an unprecedented 92 per cent of all new loans, with Westpac and the Commonwealth Bank writing the lion's share.
Associate Professor Frank Zumbo from the University of New South Wales told the Senate's Economics Committee that each now sells roughly as many mortgages as the ANZ and National Australia Banks combined.
"My deepest concern is that there will be conversations or thought given to the ANZ and NAB merging," he told the Committee. "Yes, there's a four-pillars policy in place prohibiting further mergers, but it is only a policy. I'd like to see it enshrined in regulation."
Professor Zumbo also called on the Competition and Consumer Commission to reopen its investiagiton into the Commonwealth Bank's takeover of BankWest, saying it was not too late for the Commission to ask a court to unwind the merger on the grounds that it had substantially lessened competition.
Published in today's SMH and Age
