Recent reports suggest that the rise in fixed home loan rates may be a sign that the Reserve Bank’s (‘RBA’) series of rate cuts are coming to an end. The country’s largest home loan lenders have begun adjusting their fixed home loan rates in expectation of an end to the RBA’s rate cuts.
In the past few weeks, all four major banks have raised some of their fixed home loan rates, as the housing market heats up. For example, the Australian Bureau of Statistics reported that building loans for new residences jumped by 14.4 per cent in September.
The Commonwealth Bank raised its three-year fix home loan by five basis points, its four-year and five-year rates by 20 basis points. ANZ raised its three-year rates by 20 basis points, while National Australia Bank and Westpac also raised its three-year fixed rates by 20 basis points. The figures show that one-year fixed rate home loans were still falling, with an average of 26 basis points for major lenders.
Some commentators have suggested that it is still too early to know when the RBA will raise its starts. It is common for fixed rates to rise sometime before variable rates were raised.