Fixed rate hike...the run is on
In the blink of an eye, a large number of banks have lifted their longer term fixed rates. Up until recently, any rate hikes were not expected until 2024 based upon the Reserve Bank keeping the cash rate on hold till then.
However, NAB, CBA and ANZ have all increased their longer term fixed rates on the basis that their cost of funds is likely to increase as of 2022. The Reserve Bank is now hinting at earlier rises in the cash rate. This would bring an end to the current ultra low fixed rate environment that has existed for some time.
The majors are not the only with with a large number of lenders increasing their 3 year fixed rates with some also increasing their 2 year fixed rates.
So what does this mean as a borrower? Is it too late to fix?
In some cases, yes, the horse has already bolted. In others, there is a window to lock in the current fixed rates before they rise. This window however is very narrow.
If you have a preapproval in place for a fixed rate, speak to your broker about the option to 'rate lock'.
A point to note. For some banks, even with the increase in rates, their fixed rates are still lower than their variable rate offering. Whether it's worth taking advantage of the current fixed rates, is something you need to consider in light of your own situation. Speak to your broker.