The banks have begun increasing fixed interest home, investment and business loan rates, even though the Reserve Bank of Australia has not increased official rates in a decade and recently signalled it was unlikely to do so until 2024.
The Reserve Bank of Australia last met on Tuesday 7 December 2021 and interest rates remained the same for the 12th consecutive meeting. With the next meeting of the Reserve Bank not due until February 2022, it is unlikely that rates will rise.
The Reserve Bank continues to stick to their line “we will remain patient” before raising official interest rates. (Read more here)
Since the start of November 2021, the banks have all been increasing their fixed interest rates, with some of the major banks increasing rates 3 or 5 times in that 6-week period.
The days of getting an interest rate from a major bank that starts with a 1 are gone!
At the same time, we have actually seen some banks decrease their variable rates, particularly for customers who have 40% equity in their properties. It is possible to have a variable rate around 2.20%, possible a little lower.
The competition from banks for your business remains as strong as ever. We currently have access to approx. 15 lenders who are all offering an incentive for you to refinance your loan to them. These incentives range from $2,000 up to $6,000.
You can have a combination of variable and fixed rates, principal and interest or interest only repayments for your investment debt and features such as redraw or offset accounts.
If you have not had your loans reviewed in the last 18 months to 2 years, now is the perfect time to speak to one of our Senior Lending Advisers.