Ensure you never miss an issue of the
real estate business bulletin
Interest may rise even if rates on hold

Interest may rise even if rates on hold

by Staff Reporter 1 comments

Though the cash rate is predicted to remain unchanged at today’s Reserve Bank meeting, borrowers should watch out for out-of-cycle home loan hikes, a loan comparison website has warned.

A survey by finder.com.au of 12 economists at Australia’s major banks and non-bank lenders found all expected rates to remain unchanged today.

Five predicted rates would rise by the end of this year, three believed there would be no change until 2015, and four were unsure of the next movement.

Nonetheless, finder.com.au money expert Michelle Hutchinson said borrowers should be on alert, since several variable home loans have moved independently of the Reserve Bank in recent times.

She said despite a period of stability in the cash rate, five lenders have increased their interest on home loans by up to 0.10 percentage points this year.

“We’ve also seen seven lenders drop 20 home loans this year by as much as 0.17 percentage points,” she said.

She warned even a small change could have a significant impact on a family’s budget.

“Even a small hike of 0.10 percentage points can make a big difference to the cost of a home loan,” she said.

“For instance, for a $300,000 mortgage, that’s worth about $19 extra per month, or almost $7,000 over 30 years.”

She recommended borrowers keep an eye on their rates, compare their loan to those offered by other lenders and negotiate or switch to secure the best deal.

Interest may rise even if rates on hold
lawyersweekly logo
promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2017

The REB Top 100 Agents ranking is the foremost ranking of agents in Australia. It has set the bar for excellence in Australian real estate. To be ranked as an REB Top 100 Agent is the standard real estate professionals strive for. See the full 2018 ranking here!

featured podcast

featured podcast
An industry where the resilient succeeds

Tim Heavyside believes that a strong support team and good foundations are paramount to success in the real estate industry, and with regu...

View all podcasts

Would you consider working for Purplebricks or a similar 'DIY' model?

Yes (7.2%)
No (80.9%)
Perhaps - make me an offer (12%)

Total votes: 209
The voting for this poll has ended on: July 13, 2018
Do you have an industry update?