Macquarie Bank raises interest rates across the board
The lender will raise owner-occupier mortgage rates by 6 basis points and investor rates by 10.
The trend of rising mortgage interest rates continues, with Macquarie Bank joining AMP, Suncorp and Bank of Queensland to raise rates despite the Reserve Bank's inaction.
Macquarie Bank will increase its owner-occupier products by 6 basis points. Investment loans, which are usually higher, will rise by 10 basis points.
Rate rises are no joke for Aussie borrowers. Even a small rise becomes a big financial hit for people facing mortgage stress.
Here's what a 6 basis point rise adds to your repayments:
- Example loan: Macquarie Bank Basic Home Loan – LVR ≤ 90% (Up to $750,000 Owner Occupier, P&I)
- Original interest rate: 3.99%
- Borrowing amount: $700,000 over 30 years
- Original monthly repayment: $3,338
- New interest rate: 4.05%
Your new repayment would be $3,362, which is an extra $24 a month, or $288 a year.
Recent research found that almost a million Australian households are facing mortgage stress, so these extra costs are very real.
When taking out a mortgage it's important to factor in rate rises and make sure you can handle them. But if you're worried about meeting your repayments you do have options. Talk to your lender about hardship assistance schemes and repayment holidays (a short break in your repayments).
Refinance to avoid rate rise headaches
The real trick to avoiding rising rates is simple: refinance. By comparing rates and switching to a cheaper loan you can save hundreds or even thousands of dollars in repayments.
As long as you've paid off some of your loan and have some equity in the property, then switching should be relatively simple. It's just a question of applying, getting your paperwork together and letting your new lender handle the transition with your current one.