It’s shocking how many lenders have raised fixed rates today, and by how much.
Several Australian lenders raised their fixed interest rates on home loans this morning, ending a period of rock-bottom fixed rates for borrowers.
Lenders who have raised rates in the past two days include:
- TIC Toc
- Bank of Adelaide
- Good home loans
- G&C Mutual Bank
That’s a big difference for the average borrower. If you took out a $500,000 30-year loan just yesterday, your monthly repayments at 2.24% would be $1,908.
Today, at 2.99%, that rises to $2,105 per month. That’s $197 more per month, or $2,364 per year.
What a difference one day can make.
What does this mean for borrowers?
If you’ve already paid off your home loan, you have nothing to worry about right now. Once you have fixed, the rate will not change until the end of the fixed period.
Borrowers looking to fix right now should make sure their lender hasn’t raised rates. If you’re about to sign a loan deal at a good rate, it’s worth considering a rate lock fee. This means you’re guaranteed to get the rate you signed up for, even if your lender raises rates while you wait for settlement.
Borrowers with variable interest rates should also check to see if their lender has raised their rate recently. Because you never know when your rate may move.
Is this the end of low interest rates?
Interest rates have been rising for some time now, especially fixed rates. Today’s news has definitely made fixed rate loans a much less competitive option for borrowers looking for a low rate.
But not all lenders have budged (although that’s probably more the case). And variable rate loans are still pretty competitive, almost as low as they’ve ever been.
Most experts predict that the Reserve Bank will soon increase the official exchange rate. It will also push up variable interest rates. So while the era of rock-bottom interest rates isn’t quite over, today’s moves are another sign that everyone’s home loan is about to get more expensive.
Looking for a cheaper rate? Discover some of the lowest rates on the market.