With the Reserve Bank holding out on raising interest rates, some lenders are starting to make their own decisions, it seems.
In the last few days of November, Commonwealth Bank increased fixed rates for the third time since September, taking owner-occupier fixed rates up by 0.30 percentage points and double that (0.60%) for investors.
Modelling by comparison website Canstar shows that over the past quarter, rates offered by Commbank on owner-occupier three and five-year fixed rate loans with principal and interest repayments have jumped up by 0.80 and 0.40 percentage points, respectively.
Suncorp and ME have also now made changes on a range of fixed rate products for owner-occupiers and investors, while lowering rates on other products.
The week before, Westpac announced further increases to its fixed rates for both owner-occupiers and investors, the third time it raised rates in a month. This followed similar moves by other banks, including NAB and ANZ, the week prior.
At its November meeting, the Reserve Bank of Australia (RBA) held the cash rate steady, but economists expect that rates could rise in years to come, and home loan borrowers have been urged to consider ‘interest rate proofing’ and locking in fixed rates while they are still relatively low.
Canstar’s General Manager of Research and Insights, Mitch Watson, suggests the tide of fixed rate changes is turning into a surge.
“Anyone sitting on the fence about whether to fix their home loan interest rate may have missed their chance for the best rates among the major banks, but there are still some good deals to be found in the market.
“Canstar currently lists 91 fixed rates and 61 variable rates below 2%”, he added.
“The lowest fixed rates in the market are in the 1- to 2-year fixed term range and are as low as 1.59% (comparison rates from 2.15%). Fixed rates in all circumstances do provide certainty around repayments but can come with restrictions on repaying the loan during the fixed term.”
Watson added a warning to borrowers who have been thinking about fixing, that now is the time to consider their options.
“Don’t compound the festive debt hangover by waiting until the new year to do a home loan health check,” he concluded.