The RBA could hike rates as early as May. Will borrowers race towards fixed-rate home loans?
RateCity’s Tindall said competition between lenders meant variable loans can still be obtained at sub-2% annual rates.
“The RBA has recently noted in their latest financial stability review the median repayment buffer for owner occupiers with a variable mortgage rate had grown to 21 months of scheduled repayments in February 2022, up from 10 months at the start of the pandemic,” Lawless said in a report released on Thursday.
Those on fixed rates would be insulated from the immediate rise, but face “a refinance shock” when their loan period expires, Lawless said.CoreLogic, RateCity, and CBA’s Aird all predict house prices, if they haven’t already peaked, will start to decline as interest rates rise.
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