Gap closes between fixed, variable rates

EXPECTATIONS that interest rates will be steady in coming months have narrowed the gap between fixed and variable loans.

A three-year fixed interest rate mortgage has dropped to within 16 basis points of the average standard variable rate, according to ratings agency Canstar Cannex.

''Following the Reserve Bank's cash rate increases and fixed rates remaining somewhat constant, fixed and variable are now almost sitting at parity,'' Canstar Cannex financial analyst Mitchell Watson said.

Advertisement: Story continues belowCurrently, the average standard variable rate is 7.38 per cent, while the average three-year fixed rate is 7.54 per cent.

The RBA kept interest rates on hold at 4.5 per cent this month, after global markets were spooked by the European debt crisis. The June pause comes amid a rate rise cycle that began in September last year, with the RBA lifting the cash rate six times since then.

Investors are pricing in a 4 per cent chance of a rate cut in July, according to Credit Suisse data.

By June 2011, the market is forecasting an interest rate of 4.75 per cent.

''Borrowers could see this as an opportunity to reduce the risk of fixing, but they need to be aware that fixing a home loan is a long-term decision and very much a gamble, so it really does depend on your own individual circumstances,'' Mr Watson said.

The average one-year fixed rate mortgage is 6.95 per cent, while the average two-year rate is 7.39 per cent. Longer-term fixed rate mortgages cost more, with the average four-year fixed rate at 7.87 per cent and the average five-year rate at 8.03 per cent.

Canstar Cannex estimates that a borrower on a three-year fixed rate loan in October would have spent $9600 on monthly payments so far, while a borrower who took out a three-year loan in April last year would have saved $1400.

Clean tech patents enjoy record quarter

The number of clean tech-related patents granted in the US hit record levels during the first quarter of the year, according to new figures released last week, further fuelling optimism that the sector is recovering strongly from the recession.

The Clean Energy Patent Growth Index report from intellectual property law firm Heslin Rothenberg Farley & Mesiti found that 379 clean tech patents were granted in the US during the first three months of the year, representing the highest quarterly value since the index began.

The performance marked an improvement of more than 50 per cent year on year and a 12 per cent increase in patents compared to the fourth quarter of 2009.

According to the report, fuel cell technologies dominated the list, with 208 patents granted during the first quarter, while the number of patents granted to solar and hybrid and electric vehicle technologies also rose.

In contrast, the number of patents granted to wind and biofuel innovations were down slightly on the previous quarter.

Car firms dominated the list of companies applying for patents, with Honda's 29 fuel cell patents and one solar patent ensuring it took the crown for the most successful clean tech patent applications during the quarter.

GM was in close pursuit with 28 patents granted, primarily in the fuel cell field, while Samsung came third with a collection of 21 fuel cell, solar and wind energy patents.

Toyota and Ford completed the top five with 12 and 11 patents respectively.