A lot of banks aren't playing nice when it comes to interest rates

Not all banks are playing nice when it comes to home loans, with several of them hiking fixed interest rates since late last year. This has surprised a lot of us, because as we know the RBA has kept the cash rate at 0.1% for some time now.

So, why are banks charging more for home loans when the cash rate is still at an historic low?

Well, they're justifying it by the fact wholesale funding options have become more expensive to them, care of changes the RBA made earlier this year.


It's true, in its first contractionary monetary policy for a while, the RBA decided to stop lending money to the banks at discounted rates. The banks have chosen to pass this additional expense on to consumers.

And it's not just the Big 4 jacking up their interest rates, with about ten other lenders following suit. This means there's a good chance your bank has increased the fixed interest rate on its home loan products.

There's also speculation it could be that the banks are simply preempting that the RBA will increase the cash rate sooner than everyone thought. Either way, home loans interest rates are rising, and we have no way of knowing where they'll end up.

So what does this mean for your existing home loan?

Now is a very good time to speak to us to review your loans and ensure you're getting an optimum deal. We can then look at whether it's worth either refinancing or repricing your home loan.

And while the interest rate isn't everything, it can make a significant difference to the cost of your loan - all other things being equal.

Get in touch to get the ball rolling.

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