New research by customer-owned lender CUA has revealed Australians are divided on the future of the interest rate environment.
According to the group’s National Mortgage Survey, one in four participants stated they were unsure about the interest rate outlook.
A further 25 per cent said they expect an increase before the end of 2015, while 26 per cent expect a decrease and 22 per cent expect no change at all.
Low-income earners along with New South Wales and ACT residents were the demographic most likely to be bracing for an increase by the end of the year, while uncertainty was the highest amongst Queensland residents.
The survey also revealed that 77 per cent of participants with a home loan were likely or very likely to make extra repayments if their mortgage repayments decreased as a result of falling interest rates.
Furthermore, over half of the participants stated they likely or very likely to put extra money into savings, while only five per cent said they were very likely to treat themselves to a luxuries such as holidays and dining out.
CUA head of product Mark Petty said the “significant uncertainty” surrounding interest rates could explain why borrowers were choosing to put interest rate savings back into their mortgage or savings.
“People are watching interest rates closely and opinion on where they are heading is divided,” he said.
“The survey also showed that one in seven people with a variable interest rate mortgage were planning on moving to a fixed interest rate within six months.
“We would expect the number of home owners looking at that option will continue to increase in the coming months, particularly given the uncertainty about future rate changes.”