HOME LOAN RATES: ECONOMISTS PREDICT WHERE THEY’RE HEADED

December 10th, 2003

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Your Mortgage Magazine asked our panel of Australia’s leading economists where they think the average standard variable rate charged by Australian banks of 7.07% is headed over the coming months. These predictions by no means reflect where the rates will be for the banks or the other institutions surveyed and are intended as a guide only. The predictions were made between 10 November, 2003, and 28 November, 2003, and forecasts may have changed since then. Our panel also advises borrowers on whether the time is right to lock in rates on your home loan.

Spokesperson	Institution	June 04		Dec 04		Words of wisdom on whether it's too late to fix rates
Kieran Davies, Chief Economist	ABN AMRO	7.32%	é	7.07%	n	The risk is that fixed rates will fall from where they are now
Jim Miltiadis, General Manager Operations	AIMS Homeloans	7.32%	é	7.57%	é	Fixed rates should remain around current levels
Shane Oliver, Chief Economist	AMP Henderson Global Investors	7.32%	é	7.32%	é	There is a case to consider fixing part of a loan for a year or so
Saul Eslake, Chief Economist	ANZ Bank	7.32%	é	7.32%	é	The case for fixing now isn't particularly compelling, except for risk-averse borrowers
Mark Glover, Treasurer	Bank of America	7.32%	é	7.32%	é	I wouldn't fix; if the economy slows, variable rates will fall back
Gino Marra, Executive Director	Carter Mayfair	7.07%	n	7.07%	n	Clients that pay extra on mortgages are always better on variable loans
Annette Beacher, Senior Economist	Citigroup Global Markets	7.35%	é	7.35%	é	Over-fixing ahead of anticipating substantial increases in rates could be unwarranted
Rob Emmett, Managing Director	Collins Securities	7.07%	n	7.07%	n	It is probably too late. The best fixed rates were available 6 months ago.
Warren Hogan, Chief Economist	Credit Suisse First Boston	7.32%	é	7.07%	n	Fixed rates will drift higher over the next few months, before heading lower through 2004
Simon Tennent, Chief Economist	HIA	7.32%	é	7.57%	é	Now is the time to be fixing the full amount or a portion for 5 years
John McGee, Chief Operating Officer	Homeloans Ltd	7.32%	é	7.32%	é	I believe it's too late to fix - expected rate rises are factored into current fixed rates
Anthony Thompson, Senior Economist	HSBC	7.57%	é	7.57%	é	Borrowers may have 'missed the boat' to lock in a fixed rate on their mortgage
Glenn Baker, Treasurer	ING Bank	7.32%	é	7.57%	é	The best time has probably passed, but there remains limited opportunity to fix
Bent Peterson, General Manager Risk	Liberty Financial	7.32%	é	7.82%	é	There doesn't appear to be a lot of benefit for borrowers in fixing rates
Tony Gill, Executive Director	Macquarie Bank	7.32%	é	7.32%	é	No comment
Ken Sayer, Managing Director	Mortgage House of Australia	7.32%	é	7.32%	é	It's too late to fix. Rate increases are already factored into fixed rates
Mark Cheng, Head of Treasury	Overseas Union Bank	7.32%	é	7.57%	é	Rather stay variable from here
Nicholas Gruen, CEO	Peach Home Loans	7.32%	é	7.57%	é	People should still fix at under 7% if they feel a 1% rise in rates would be scary
Glenn Maguire, Chief Economist	SG Australia	7.32%	é	7.32%	é	We don't expect the rise in variable rates to overtake current fixed rates
Tim Crawford, Senior Economist	St George Bank	7.32%	é	7.32%	é	Consider a split fixed-variable loan given some uncertainty about the rate outlook
Scott Haslem, Senior Economist	UBS	7.32%	é	7.32%	é	No comment
Bill Evans, Chief Economist	Westpac	7.32%	é	7.32%	é	Expect some more upward pressure on fixed rates
Lee Boueri, Managing Director	Yes Home Loans	7.47%	é	6.97%	â	Splitting and fixing a portion we still consider to be the best strategy

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