Australia’s biggest banks have hiked their fixed rate for owner-occupiers in a further sign that “the tide is turning on interest rates”.
CBA has increased both its three- and four-year fixed rates for owner-occupiers paying principal and interest by 0.05%, as well as some interest-only loans by 0.10%. So is Westpac and NAB in recent months.
In March, ANZ senior economist Felicity Emmett said fixed-mortgage rates had already reached their lowest point, or close to it, as lenders began lifting their four-year fixed rate products.
Furthermore, Canstar research shows 38% of lenders have increased at least one fixed rate over the past two months.
Why are fixed rates moving upwards if the RBA hasn’t lifted the cash rate?
The Reserve Bank of Australia (RBA) has repeatedly said the official cash rate isn’t likely to be increased until 2024 at the earliest.
But given that’s now within three years, the banks are beginning to adjust their three- to four-year fixed rates to head off those potential RBA rate hikes.
“The money market is already factoring in [RBA rate] rises,” explains AMP Capital chief economist Shane Oliver.
“That’s not having much of an impact on two-year rates yet. But as we go through the course of the year, the possibility of rate hikes will start to impact shorter rates as well.”
So what’s next?
Well, when the Majors make their move, it’s not uncommon for other lenders to follow suit.
Lender always offer applicants to cap the interest rate prior to settlement with fees applied.
If you wish to tap on the competitive fixed rate which some of other lenders still offering, it is good to start exploring your loan options.
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