all four of the country\u2019s largest banks now having increased fixed rates<\/a> since the RBA\u2019s board met on November 2.<\/p>\nThe increases mean ANZ no longer has any home loan rates under 2 per cent, with 0.3 per cent rises applying to one, two, four and five year loans, while three-year fixed rates rising by 0.4 per cent.<\/p>\n
\u201cFixed home loan interest rate increases are like painting the Sydney Harbour Bridge,\u201d Canstar finance expert Steve Mickenbecker said.\u00a0<\/p>\n
\u201cBy the time the fourth of the major banks has increased rates, the first is starting again.\u201d\u00a0<\/p>\n
Mr Mickenbecker said the pace of change had lifted, with incentives for borrowers to fix terms beyond one year swiftly disappearing from the market.\u00a0<\/p>\n
\u201cRises in borrowing costs for all fixed terms beyond 12-months are pointing to a Reserve Bank cash rate increase in mid-2023,\u201d Mr Mickenbecker said.\u00a0<\/p>\n
\u201cWith the expectation for a cash rate rise within two years, banks are going to be keen to write new business at variable rates over the coming months.<\/p>\n
\u201cBorrowers can expect a tightening of credit standards, as evidenced by NAB\u2019s call for a higher affordability buffer.\u00a0\u00a0<\/p>\n
\u201cThe bank\u2019s positioning of its variable interest rate for low deposit loans at a massive 0.70 percent above the rate for loans with a deposit of 20 percent or more is also indicative of this stance.\u201d\u00a0<\/p>\n
Mr Mickenbecker said Canstar\u2019s research showed there were 210 loans on offer with rates below 2 per cent last month, but today there were 183.\u00a0<\/p>\n
\u201cIt\u2019s still a great time to refinance and squirrel away some extra repayments for a rising rate future, but the options are starting to narrow,\u201d he said.\u00a0<\/p>\n
RateCity.com.au research director Sally Tindall said the current frenzy of fixed rate hikes had started as minor adjustments, with more increases likely to follow.\u00a0<\/p>\n
\u201cCustomers currently in the queue for a fixed rate should consider paying a rate lock fee in this environment,\u201d Ms Tindall said.\u00a0<\/p>\n
\u201cThe number of fixed rates under 2 per cent is dropping rapidly.\u00a0\u00a0<\/p>\n
\u201cWhile there\u2019s still plenty of choice among short-term rates, there are now just four 3-year fixed rates under 2 per cent and no 4- or 5- year rates under this mark.\u201d\u00a0<\/p>\n
Meanwhile, Westpac slashed savings rates by 0.05 per cent, with more than 40 lenders slashing at least one of their savings rates in the last two months.\u00a0<\/p>\n
Ms Tindall said the cuts were not unexpected and followed market trends.\u00a0<\/p>\n
\u201cThe problem for the banks is that they\u2019re brimming with cash, as COVID has encouraged Australians to save for a rainy day,\u201d she said.\u00a0<\/p>\n
\u201cThe latest APRA statistics show Australian households have $1.20 trillion in the bank, that\u2019s up $108 billion from the same time last year.\u00a0<\/p>\n
\u201cWith deposits at a record high, most banks aren\u2019t willing to offer up a decent savings rate.\u201d<\/p>\n<\/p><\/div>\n
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