Rates are rising, but who will join the party?
Westpac has broken the rate rise stalemate between the Big4 when it decided to raise home loan interest rates. With the official cash rate staying put by the Reserve Bank of Australia (RBA) and 3 of the Big4 now with a rate rise in play, who else will play copy cat and hike up their rates too?
But why has this happened you ask? Westpac say it’s because of the rising costs of wholesale funding or in other words the money they borrow and lend to us through home loans, is going up in price. Chief Executive Brian Hatzer, told ABC that he thinks these lending costs will stay put for a while which could mean a one off rate cycle increase. Let’s not forget that although these rate hikes are under heat, dozens of smaller banks home loan rates have also less publicly crept up in the past few months.
And how will this impact how much money we have to spend at the end of the day? On a 25 year mortgage of $750,000 at 5.00% p.a., with a rate hike of 0.14% p.a. costs will rise approx $61.39 per month. This could mean tricky times ahead if you bought a property in some of those more pricey areas and stretched your budget.
It doesn’t hurt to touch base with a Loan Market broker if you haven’t already, to find out what you can do to prepare for a rate rise. With access to a panel of over 35 lenders from the Big 4 to specialists lenders, we can look at loads of options out there to save you the time - and potentially some coin, quick smart.
Note: This is for discussion purposes only. Whilst all care and attention is taken in its preparation any party seeking to rely on its content or otherwise should make their own enquiries and research to ensure its relevance to your specific business requirements and circumstances.