17 Nov Are you ready for the home loan rate increase?
Are you ready for the home loan rate increase? Let’s look at what is happening in the market with a general home loan update, including a rate update.
The Reserve Bank of Australia met earlier this month and the general consensus is the economy is recovering quicker than what they had anticipated post-COVID. Initially, we were looking to see an increase to the cash rate around 2024, but it is now anticipated this will be much sooner. This will be the first time we’ve seen a cash rate rise since November 2010, which is hard to believe that is 11-years ago! Bank economists are tipping the increase will come towards the end of 2022 or into 2023, although the market is anticipating up to a full percentage point increase in 2022.
We have seen a rate increase from the major banks. In the last two to three weeks we have seen rates go from just under 2% and the low 2’s, up towards the mid-2”s and higher in some cases.
The result has been a surge in people looking to secure interest rates by locking in a fixed rate, sooner rather than later. This may be a sign for you to get on top of your home loan and consider a fixed rate. We are seeing a lot of clients consider a fixed and variable split. The fixed and the variable split gives you the ability to lock in a low rate (while the rates are still low), and a variable loan may have additional features like an offset and redraw, which give you the ability to make additional repayments (if that’s what’s right for you).
Now is the time to have a look at your loan, check out your rate, and make sure you’re in the right product. Contact us to discuss your options, and look to take advantage of the low rates before it’s too late. Want to find out more about refinancing? Click here to download our free guide to refinancing.