David Cunningham: Squirrel Mortgage Broker on homeowners fixing loans for longer periods of time

A change in direction for homeowners and their mortgages. 

90% of home loans were floating or fixed for less than a year in January. 

CoreLogic says there's anecdotal evidence borrowers have begun to fix for longer as interest rates come down. 

Squirrel Mortgage Broker, David Cunningham told Ryan Bridge things have changed dramatically since Christmas, with favourable rates for longer fixed-term periods. 

He says Westpac kicked it off with a 4.99 term for three years, ANZ doing the same at two-years, with all competitors now offering near there. 

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Episode Transcript

Speaker 1 (00:00):
Poor logic is sensing an incoming rates war interest rates
that it is with signs that borrows are starting to
check out the two year, the three year, the fixed
term deals again, people going a bit long. In January,
ninety percent of borrow has chose floating or fixed rates
of six to twelve months. But that is all about
to change. David Cunningham from Squirrel Mortgage Brokers is with me, David,

(00:21):
good morning. Hey a right, So what sort of queries
are you getting at the moment? What are you hearing?

Speaker 2 (00:28):
Oh? Look, it's things have changed dramatically since pre Christmas.
I know you've had this march down in the ocr
and people were just holding back waiting for the OCA
announcement reduction to come, and then as soon as that happens,
they jump into a short term fixed rate. And that's
been going on really for the best part of a year,
where everyone's been in short term rates on the expectation
that the OCO would come done. So it's come down

(00:50):
a fair bet already and there's a couple of war
cuts definitely to come based on what the Reserve Bank
said to us. So what was sort of seen is
I wouldn't say, actually I think yeah, in terms of
a mortgage war, I think what we saw is, you know,
pre Christmas we were sort of calling out the squirrel.
We were calling a four ninety nine rate early in
the new year, and the skimmersh sort of got underway

(01:10):
with WESPEC going to three four ninety nine with a
three year term. Then they pulled it a couple of
weeks later, and then I think am Z the same
day a full ninety nine for two year, and essentially
every bank has come to that level pretty much. Look,
we could see the one year rate go, but but
I actually don't think there's a war coming. I think,
you know, we've sort of passed the threshold and banks

(01:30):
that are now just going to sort of hop around
that level.

Speaker 1 (01:33):
So do you reckon? People should like, I mean, it's
not going to get much better than four point ninety nine.
And I guess the other thing is, what you know,
do you really want to sit here and for how
long trying to pick the bottom of the market, right.

Speaker 2 (01:43):
Yeah, yeah, ye, Well, look what we've seen is like
almost you know, the bulk of customers are now taking
four ninety nine for two years. I mean I just adapts. Actually, well,
then the maney where your mouth is. Yeah, so you know,
i'd be I'd been on set of six month rates
for the last a year or two or something like that,
just waiting for waiting, waiting, waiting, waiting, and happened. And

(02:05):
you know, when you look back over history and you
can look through from two thousand and ten to sort
of two thousand, you know, to pre COVID, you know,
interest rates for one two year terms, we're in that
four to five percent range for that whole time almost.
So you know, unless the economy tanks further, which Michael
just said that it's you know, probably looking a bit

(02:26):
but better. Even if consumers are still gloomy, you know,
you're probably going to be in that range, but more
likely the middle of the range for so one year term.
You know, so it could be a bit lie, but
you know, for we you know, Squirrel's views for night
is a damn good rain two.

Speaker 1 (02:40):
Thanks for it, David Cunningham, Squirrel Mortgage Breakers. To Squirrel
with Us this Morning.

Speaker 2 (02:45):
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