As lenders jack interest rates up, the age of low fixed rate loans is over

Posted: 31 March 2022 12:44 pm

It's shocking how many lenders lifted fixed rates today, and by how much.

Multiple Australian lenders increased their fixed home loan interest rates this morning, effectively ending the period of super-low fixed rates for borrowers.

Lenders who've lifted rates in the last couple of days include:

  • 86 400
  • Tic:Toc
  • UBank
  • Adelaide Bank
  • Well Home Loans
  • G&C Mutual Bank
  • Athena

In total, 378 fixed rate loans have increased in the last 2 days, some by up to 30%. Just yesterday, a 1-year fixed rate from one of these lenders was 2.24%. Now it's 2.99%.

That's a big difference to the average borrower. If you took out a $500,000 loan over 30 years just yesterday, your monthly repayments at 2.24% would be $1,908.

Today, at 2.99% this jumps to $2,105 a month. That's $197 a month more, or $2,364 a year.

What a difference a day can make.

What does this mean for borrowers?

If you've already fixed your home loan you have nothing to worry about right now. Once you've fixed, the rate won't change until the fixed period ends.

Borrowers looking to fix right now need to make sure their lender hasn't raised rates. If you're about to sign a loan contract for a good rate, it's worth considering a rate lock fee. This means you're guaranteed to get the rate you signed up for, even if your lender hikes rates while you're waiting for settlement.

Borrowers on variable interest rates should also check if their lender has raised their rate recently. Because you never know when your rate can move.

Is this the end of low interest rates?

Interest rates have been creeping up for a while now, especially fixed rates. Today's news has definitely made fixed rate loans a much less competitive option for borrowers looking for a low rate.

But not every lender has made a move (although it's likely more will). And variable rate loans are still quite competitive, almost as low as they've ever been.

Most experts are predicting the Reserve Bank will increase the official cash rate soon. This will push variable interest rates up as well. So while the age of rock-bottom interest rates isn't quite over, today's moves are another sign that everyone's home loan is going to get more expensive soon.

Looking for a cheaper rate? Check out some of the market's lowest rates.

Find the right home loan now

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