Cash Rate Hike May Succeed Spurt In Fixed Rates

cash rate increaseVenessa Paech, in an article for the website realestate.com.au, observes how fixed rates have picked up over the last couple of months. More than 50% of four year and five year fixed rate loans have witnessed a hike. Nearly one-third of three year fixed rate loans have also seen an upward adjustment. Interestingly, one year fixed rate loans have held their ground or have even fallen by whiskers.

Such adjustments are likely to precede cash rate hikes. Buyers are advised to see the larger picture and budget for interest rate hikes when they calculate their mortgage liabilities. Paech gives an instance where she says that a hike of one basis point (0.25% percentage point) can increase the monthly mortgage by $45 for a $300,000 home loan.

You can read the original article here.

Do you think splitting the loan liability between “fixed rate” and “variable rate” can work better?