Today the Reserve Bank of Australia met and decided to leave official interest rates on hold. As widely predicted, the RBA will wait and see how the economy performs in the next few months before making any changes. Economists are still split if the next move will be up or down, but it’s not likely to be known for some time.
Interestingly, you may have seen announcements by a number of Australian banks over the last few days advising that they have lifted interest rates on their investment (or interest only) loans. This comes after many banks increased their fixed home loan rates in the past few weeks. Whilst bank bashing is easy, we know there has been an increase in the cost of fixed rate funds in the wholesale funding markets. Have we seen the bottom of the interest rate cycle (especially fixed rates)…? Only time will tell.
If you believe that rates are on their way up, and you want to minimise the possible impact that it will have on your cash flow, feel free to give us a call so we can look at your fixed rate loan options.