Why has my rate gone up when the cash rate stayed the same?

Has been the big question coming my way this week.  So while the RBA decision to keep the cash rate on hold at 1.5% for a ninth consecutive month came as no surprise the cost of credit (Your rate) for certain sectors has gone up.

Why? – The volatility of the global markets (Thank you Mr Trump) have increased the cost of wholesale funding and a raft of changes by the financial regulator in Australia (APRA) have caused a change in the availability and cost of credit.  Most recently APRA have told the banks that they must limit the flow of new interest only lending to 30% of new residential mortgages.

What to do? –it’s a complicated landscape but not all banks are even and they are still hungry for your business, understand your short and long term goals and talk to your broker about how you can achieve them.

Posted in: Interest rates

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