While Australians are still enjoying mortgage rates a lot lower than past years, that interest rate figure is creeping up. Last week, while many Australians were distracted from some kinds of money matters by the more pressing issue of how much money they could win on the Melbourne Cup, the big four banks raised their variable mortgage interest rates to match the official 25 basis point increase from the Reserve Bank.
That puts a lot of rates at over 6 per cent now – for example, the standard variable home loan rates at the ANZ and Westpace are now up to 6.31 per cent, with the Commonwealth Bank and NAB close behind with 6.24 per cent. Nobody was surprised to see these rates rise, and to date there is little consumer backlash, but if rates continued to rise at the pace they have over the last couple of months, it wouldn’t be too long before mortgage holders start to complain.
The million dollar question is, of course, what does the future hold? Some commentators think the Reserve Bank will hold fire in December, or at the most raise the official rate by 25 points again; in the words of Reserve Bank governor Glenn Stevens himself, their current strategy is:
to lessen gradually the degree of monetary stimulus that was put in place when the outlook appeared to be much weaker.
If you are worried about your own mortgage and rising interest payments, then there is at least one good piece of news for the near future: even if the Reserve Bank raises rates a little in December, they take a holiday in January so there would then be no more rate rises until February at the earliest. And that’s good news if you plan to spend a little extra cash enjoying the Christmas and holiday season.
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Tags: interest rates, Reserve Bank