By now, you may have heard that many of Australia’s lenders have raised their home loan interest rates. Over the last couple of weeks, almost all of Australia’s lenders have increased their standard variable rates, affecting both owner occupiers and investors.
Some lenders have raised their rates by as much as 39 basis points, while others have only increased their rates by 3 basis points.
These rate increases occurred outside of any movements by the Reserve Bank of Australia, with the Board opting to leave the official cash rate on hold in March at 1.5%.
While it is interesting to see many of Australia’s lenders lift their rates outside of the Reserve Bank, it is not altogether unusual. Sometimes, different domestic and global economic factors ultimately force Australia’s lenders to adjust their home loan rates.
In this instance, the banks are telling us that increased funding pressures have forced them to lift their rates. In December and March, the United States’ Federal Reserve lifted the official cash rate. These rate adjustments have put additional pressure on bond yields and, in turn, offshore funding costs.
As a result, Australia’s lenders have been forced to absorb these higher funding costs and pass them onto their borrowers by way of higher home loan rates.
So, what does this recent spate of rate increases mean for you?
Depending on your loan and your lender, the rate increases could result in higher ongoing mortgage repayments.
If you want to find out exactly how much your regular mortgage repayments may rise as a result of the rate increases, give us a call in the office on 02 9517 1818. We can also see if there is a better and sharper priced product on the market that better suits your financial situation.
And, if you are looking for some interest rate certainty, you may want to consider fixing part or all of your home loan.
Call Suzanne, Owun or Costa in the office on 02 9517 1818, or email firstname.lastname@example.org to discuss your options. Or, if you feel like dropping in at our office, we are located at Suite 106, Flourmill Studios, 3 Gladstone Street, Newtown 2042. Be sure to share our blog on Facebook and Twitter and let others join the conversation!