Is an Interest Rate Rise coming?
It may be time to think about fixing your loan.
During 2020 (let’s call it ‘the covid year’) the Reserve Bank reduced rates to record low levels, and they are holding these, for now. During the Covid year we were all told that rates would be low and stay low for 4 or 5 year. But the upside to how well Australia has managed Covid, the resilience of our economy and small business operators across the nation has meant that our economy, while maybe not going ‘gang busters’, is certainly doing better than most other countries.
With a solid economy comes growth and inflation.
What does this mean for interest rates? Historically this would mean that rates would rise. In the new Covid world; well we can’t really be sure. But what are the markers that may tell a story?
- Recently CBA moved their home loan assessment rate up – this is not the rate that you will pay, but it is the rate that they ‘stress test’ applications at,
- All those great 4 year fixed rate deals that were floating around have mostly evaporated, the deals are now more so in the 1 or 2 year products,
- The media are starting to talk a rate hike up.
If you have a home loan on an existing variable rate contract that you have renegotiated in the last year or 2 you are probably in what we would historically say was exceptionally good rate. If you haven’t you should do this now because you are probably paying more interest than you need to.
But now may also be the time to think about locking the rate on all or part of your loan sometime soon.
The process to renegotiate your loan is pretty simple, but how do you know if you are getting the best rate that you can? Refinancing for a better deal is also pretty simple, but the same question – where are the best deals? The best way to find out? Go talk to a lending specialist that understands the market and has access to rates from several lenders (for example we have well over 50 lenders to choose from); and best of all? That mortgage specialist generally doesn’t charge you for their services.
Start the process today – call 1800 734 346 and we will connect you to the best lending specialist to meet your needs.