The banks haven't increased rates....yet.
Yesterday saw the Reserve Bank lift the official cash rate by 0.5%. This is the fourth increase in the cash rate by the Reserve Bank in recent months. The 0.5% lift was lower than the 0.75% speculated rise.
After recent Reserve Bank announcements, banks have started lifting their variable rates within hours with most banks communicating their own increases in variable home loan rates within 24 to 48 hours of the announcement.
As of lunchtime today 3rd August, no banks have communicated an increase in interest rates as yet. It is thought that it will be passed on in full by many banks. Interestingly we are waiting to see which bank will be the first to lift their interest rates.
With much talk about the impact upon home loan borrowers with regards to rising interest rates flowing through to increased repayments, there are 3 key actions borrowers can take now pre-empting these rate rises.
Take advantage of cash back offers - currently between $2k and $4k to refinance to some lenders
Redraw funds - have you accumulated redrawable funds in your loan which could be used to reduce credit card debts or supplement your cost of living?
Minimum home loan repayments - many customers are paying more than they need to on their home loan having not reduced their repayments when rates were reducing in recent years. Have you actually got room to move before you feel the affect of these rate rises
The most important thing home loan customers can do is not to stay calm and take key steps now to help you adjust to the new world we are now living in.
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