Australias fixed-rate mortgage on property real-estate may signal rate rise

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Recently the major banks have reduced their fixed rates, including National Australia Bank and St George who last week announcing cuts.

And according to one of Australia’s biggest credit unions, CUA, there is close to a record proportion of its customers taking out fixed-rate home loans, a sign more borrowers believe the next move in official interest rates will be a rise.

Chris Whitehead a chief executive at CUA said close to 55% of its new customers were opting to fix the interest rate on their mortgages, after a significant rise in the share of borrowers choosing to lock in a rate over the past few weeks.

But we must take into account that the credit union does target the fixed rate market and can usually have a bigger share of fixed-rate borrowers than the industry average, and Mr Whitehead said this was near a record high for CUA.

''Over the last three to six weeks we've seen probably a 10% increase in fixed rates as a proportion of total lending,'' Mr Whitehead said. ''It's pretty much a high watermark for us.''

''It's always a good indicator for us that people think rates have reached the bottom of the cycle.''

Of course this is all speculation but we must try and read the signs to gauge the future direction of the property real-estate market if we are to benefit