Historically low interest rates could be over, with banks and lenders bumping up mortgages despite the Reserve Bank signalling no rate change until at least 2024.
Fourteen lenders in the past months have hiked home loan rates on four-year fixed term loans, sparking speculation ultra-low rates of less than 2 per cent could become a rare commodity.
Commonwealth Bank a month ago controversially pushed up its four-year fixed term rate to 2.19 per cent despite two of its major competitors sticking to rates below 2 per cent.
Bank of Queensland, Teachers Mutual Bank and Bankwest are among some of the lenders that have followed the move by the nation’s largest residential mortgage lender.
RateCity research director Sally Tindall said low four-year fixed rates might not be around for much longer, as the RBA’s term funding facility (TFF), which has been pumping the financial sector with cheap cash, is set to end in the next two months.
The RBA’s TFF was an additional measure brought in to enable the banking sector to have access to additional funding to help drive down the price pressure of loans to businesses and households.
This additional scheme was in conjunction with the RBA slashing the official cash rate to 0.1 per cent, which is not anticipated to increase for at least the next three years.
Homebuyers have the option of splitting a mortgage across both a variable and a fixed-term product, which gives someone the flexibility to make additional payments or hold a redraw facility.
“A split loan can help you take advantage of the record low fixed rates on offer now but still allow you to get ahead on your repayments to lessen the blow when rates do rise,” Ms Tindall said.