Who is still offering low-rate home loans after the RBA rate hike?

In the week since the Reserve Bank of Australia (RBA) raised the national cash rate, banks and mortgage lenders have passed on the rise by raising variable interest rates on home loans. So where else can you find a low interest home loan, and would it be worth the effort and expense of refinancing?

Who raised interest rates?

Within 24 hours of the RBA announcing that the cash rate would rise by 25 basis points from 0.10% to 0.35%, the big four banks had announced that they would raise variable rates on their real estate loans. Many other banks and lenders have since followed suit; the full list can be found on RateCity’s RBA Rate Tracker.

The higher rates have already come into effect for a few banks, although many mortgage lenders, including ANZ and NAB, are delaying the adoption of announced rate hikes until Friday May 13, 2022.

Others wait later in the month; for example, Westpac’s rate hikes take effect May 17, 2022, while Commonwealth Bank’s take effect May 20, 2022.

Some lenders wait even longer; for example, Bank of us does not increase its floating rate before June 1, 2022; less than a week before the next scheduled RBA cash rate announcement.

Who has NOT raised interest rates?

At the time of this writing, very few mortgage lenders have said definitively that they are NOT raising their variable rates in response to the RBA’s cash rate decision.

For example, Homestar Finance announced early on that it would leave its lowest variable rate unchanged for new and existing home loan customers for as long as possible.

There are still many mortgage lenders who are still considering their rates in light of the RBA’s decision, and a few who have yet to announce plans. If you’re unsure if your mortgage lender is considering raising the interest rate on your home loan, consider contacting their team to find out.

How long will interest rates stay low?

It looks increasingly likely that Australia’s cash rate will continue to rise in the future, with RBA Governor Lowe saying it could reach 2.5%, although the timetable is not yet set. clear. This means that variable interest rates could also continue to rise, affecting repayments of home loans, personal loans and auto loans, as well as interest earned on savings accounts and term deposits.

According to research by RateCity, if the cash rate hits 2.60% by August 2024, as predicted by NAB, someone with a $500,000 mortgage could see their monthly payments increase by $675 from that. that she currently pays.

Before you consider switching to another low rate home loan, remember that the interest rate on a mortgage loan is only one factor to consider when selecting a home loan. . It’s also important to compare fees, features and other benefits to get a better idea of ​​which mortgage deals are right for you. Calculating the potential cost of refinancing could also help you estimate the value a low-rate loan could offer you.

A quick way to compare the overall value of different home loans is to view their Real-Time Ratings™, which combine the cost and flexibility of a one-star mortgage transaction. You may also consider contacting a mortgage broker for advice on the best home loans for your financial situation and personal goals.