The big four bank economists predict the Reserve Bank of Australia will start lifting the cash rate between June and September.
Mortgage holders on a fixed rate may have bought themselves temporary immunity to any rate increases, but not so for those who were on variable rates. To minimise the impact of rate rises ahead, variable-rate mortgage holders are advised to haggle with their lender now or refinance.
According to new RBA data, the average existing owner-occupier variable-rate mortgage customer is on an interest rate of 2.92% – that’s significantly higher than what’s currently on offer.
Sally Tindall, RateCity.com.au research director, said not even the government’s “pre-election cash-splash” will derail RBA’s desire for more data before making a decision.
“The next CPI data is out at the end of this month, but it’s hard to see the RBA making a move on the back of this alone,” Tindall said. “The RBA does not want to spring a rate hike on Australians without ample warning. However, even with plenty of notice, interest rate rises will still come as a shock to many Australians."
RateCity.com.au analysis of the CBA rate forecasts showed that someone with a $500,000, 25-year owner-occupier loan would have to pay an extra $303 on their monthly repayments by February next year, if the cash rate hits 1.25%.
“Most banks passed on next to nothing to their existing variable-rate customers when the RBA made its last two cuts in 2020,” Tindall said. “However, variable rates have been tumbling for new customers in the last year. There are 33 lenders offering variable rates under 2% and all big four banks have cut their lowest variable rate mortgages in the last two months.”
RateCity.com.au compiled the lowest big four bank owner-occupier home loan rates:
Below are the lowest variable rates on RateCity.com.au:
|
Lender |
Advertised Rate |
|---|---|
|
Reduce Home Loans |
1.79% |
|
Homestar Finance |
1.79% |
|
Pacific Mortgage Group |
1.79% |
|
Well Home Loans |
1.82% |
|
Freedom Lend |
1.84% |
Note: Some LVR requirements apply.
And for owner-occupiers, these are the lowest fixed rates, according to RateCity.com.au:
|
Rate type |
Lender |
Advertised rate |
|---|---|---|
|
1-yr fixed |
Unity Bank |
1.84% |
|
2-yr fixed |
BankWAW |
2.25% |
|
3-yr fixed |
Geelong Bank |
2.39% |
|
4-yr fixed |
Southern Cross Credit Union |
3.09% |
|
5-yr fixed |
Southern Cross Credit Union |
3.19% |
Note: Some LVR requirements apply.
