Attention home owners and investors. Bankwest (owned by CBA) has brought back 'capped rate home loans'.
A capped rate home loan is generally a variable rate loan with, you guessed it, a 'capped' rate. A certain interest rate it will not rise above even if variable rates and the Reserve Bank rates are sky high above it.
These loans were more popular 20 years ago or so but haven't been seen too often in recent times until now. Bankwest has made a name for itself with creative loan options in the market place over the last 24 months with loans like the Rate Tracker Ultra now brings you the Capped Rate Home Loan!
There is a general consensus that rates are extremely low at the moment and will eventually rise back to their usual heights (approx 7-8%). With this in mind most of our customers are interested in fixing and want to hear about their options.
Unfortunately at the moment we are usually offering them variable rate loans well below 5% and fixed rate loans seem to have a lot of the expected future rate rises already built in.
Today the best 3 year fixed rate we could find in the market is 6.65% and the best 5 year fixed rate is 6.99%. Upon this news the majority of people are today choosing variable rates.
In such a market you can certainly see why 'a capped rate loan' may be attractive. Let's take a look at Bankwest's capped rate home loan more closely.
All in all not a bad option, and certainly a good one if you believe rates will stay low for a couple years and then will go sky high (like many professionals do).
Your best bet is to fill enquiry form on this page or give us a call and discuss the best loan for you and your situation together taking into account your future plans and different scenarios till we get it right. Whether it is Bankwest Capped Rate Home Loan or another lender's product that fits you better.