What does an interest rate rise mean for you?

Rates and fees last updated on

How you can deal with a rise in the official cash rateRBA-Feature-Image

It seems that every time you turn on the news or read a paper you’ll hear a variety of economists and other financial experts speculating about interest rate rises. These stories are usually accompanied by talk of consumer confidence, unemployment rates and the housing market, all of which can be quite confusing for the average consumer.

So, what does it mean when the interest rate rises? How does a rise in the Reserve Bank of Australia’s (RBA) cash rate affect your day-to-day finances? Read on to find out.

What is a rate hike?

Every month, the board of the RBA meets to decide on the official cash rate. This rate is the interest rate that the RBA charges on the overnight loans it gives to commercial banks, and changes to it are announced on the first Tuesday afternoon of each month (except for January). Depending on a range of factors including everything from the strength of the Aussie Dollar to levels of consumer confidence, the RBA will decide whether to raise the rate, lower it or keep it steady.

When cash rate increase or fall, they usually do so in increments of 0.25%.

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What does a rate hike mean for me?

Home Loans

A rise in the cash rate is not the best news for mortgage holders. If the rate change is passed on by your lender, you can expect a higher interest rate on your home loan. Of course, this obviously increases the amount of interest you will have to pay towards the amount you have borrowed to buy your home.

However, people who hold a fixed rate loan will be able to avoid the impact of the interest rate rise. This does offer an extra level of security and certainty, but does also mean you can’t enjoy savings when interest rates fall.

If you want to protect yourself from interest rate rises, you may wish to look at refinancing your loan to find a better rate and a more affordable home loan package. If you have a loan that allows you to make extra repayments ahead of schedule, consider doing this to reduce the amount of the principal you will need to pay interest on when rates rise. Loans with offset accounts can also help you reduce the amount of money you’ll need to pay interest on.

Finally, consider making more frequent repayments towards your loan. If you switch from monthly repayments to a fortnightly schedule, you’ll be able to pay more off your loan off the course of a year and also pay less interest.

Compare current home loan offers

Rates last updated November 23rd, 2017
$
Loan purpose
Offset account
Loan type
Your filter criteria do not match any product
Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
3.65%
3.66%
$0
$0 p.a.
90%
Enjoy a low variable rate with no ongoing fees and borrow up to 90% of the value of the property.
3.64%
3.66%
$0
$0 p.a.
80%
A basic home loan with a competitive rate and low fees.
3.69%
4.86%
$0
$395 p.a.
90%
A special rate for first home buyers buying residential property and borrowing over $150K. 350K NAB Rewards Points offer available. Terms and conditions apply.
3.49%
4.47%
$0
$375 p.a.
90%
Discount off an already competitive interest rate for loans over $150k. NSW, QLD and ACT residents only.
3.58%
3.59%
$0
$0 p.a.
80%
A competitive variable rate product with low fees offered by a 100% online lender.
3.54%
3.56%
$0
$0 p.a.
80%
This loan is for refinancers only. A basic but flexible low-rate loan for refinancers looking to save on repayments.

3.58%
3.58%
$0
$0 p.a.
70%
A low interest rate home loan with no application or ongoing fees.
3.64%
3.66%
$0
$0 p.a.
80%
A home loan with a competitive variable rate, limited fees and plenty of flexibility.
3.64%
3.64%
$0
$0 p.a.
70%
A low-rate basic home loan requiring a 30% deposit.
3.69%
3.72%
$0
$0 p.a.
80%
A low rate home loan with no ongoing fees.
3.62%
3.64%
$0
$0 p.a.
80%
This loan is for refinancers only. Switch from your current loan to this low-rate, flexible and feature-packed refinance special.

3.69%
4.01%
$0
$299 p.a.
95%
A loan with no application fee and borrow up to 95% LVR.
3.74%
3.74%
$0
$0 p.a.
80%
Combine a low variable interest rate and free redraw with no application or ongoing fees.
4.64%
4.01%
$0
$0 p.a.
80%
Enjoy a fast application process and flexible repayment options with this fixed rate investment loan.
4.14%
4.14%
$0
$0 p.a.
80%
An investment home loan with competitive rate and 100% offset account.
3.39%
4.31%
$0
$0 p.a.
95%
Enjoy a low introductory fixed or variable interest rate for the first 12 months with no application or ongoing fees.
4.79%
5.44%
$0
$395 p.a.
95%
Package your 4-year fixed rate investment loan and pay no application fees.
3.54%
3.56%
$0
$0 p.a.
80%
For new home buyers only. No refinance option. A low interest variable home loan with no application fee and free redraws. Offer ends 30th Nov.
4.49%
4.52%
$0
$0 p.a.
80%
An interest-only loan for investors. Access equity to further your investment opportunities.
3.69%
3.69%
$0
$0 p.a.
90%
A special limited time offer for owner occupiers. An IMB Transaction Account must be opened with this loan.
4.19%
4.22%
$0
$0 p.a.
90%
Access a fee-free offset account and a special interest rate for investors.
3.65%
4.84%
$0
$395 p.a.
90%
A 2 years fixed platinum package that has $0 application and a loan redraw facility.
3.99%
4.00%
$0
$0 p.a.
80%
A low-fee variable rate investor loan with a fast online application process.
3.69%
4.15%
$395
$0 p.a.
80%
A one year fixed rate offer with no ongoing bank fees.
3.64%
4.03%
$0
$395 p.a.
80%
Apply for a new owner occupier loan or refinance from another lender and receive this discounted rate.
3.78%
3.79%
$0
$0 p.a.
95%
A no frills loan with a competitive rate and a maximum LVR of 95%.
4.09%
4.11%
$0
$0 p.a.
80%
Pay no application fee on this low variable rate investment home loan.
3.79%
4.11%
$0
$299 p.a.
80%
A fully featured home loan with an offset account and discounts available.
3.68%
3.83%
$0
$10 monthly ($120 p.a.)
80%
A low interest rate home loan that allows borrowers to borrow up to 80% of the property value.
3.64%
3.78%
$0
$10 monthly ($120 p.a.)
80%
A competitive variable rate home loan with flexible features. You can earn 30,000 Velocity Points for every $100k you borrow (for a limited time, subject to eligibility requirements).
3.72%
3.75%
$600
$0 p.a.
80%
A maximum 80% LVR home loan with no ongoing service fees and a linked transaction account.
3.72%
3.74%
$0
$0 p.a.
80%
Take advantage of a 100% offset account along with no annual or application fees.
3.77%
3.81%
$200
$0 p.a.
95%
A basic home loan with a low interest rate and a redraw facility available.
3.74%
4.15%
$0
$395 p.a.
80%
Enjoy a discount of a competitive interest rate and 100% offset account.
3.88%
3.81%
$0
$0 p.a.
95%
A competitive 3-year fixed rate loan with a high max insured LVR.
3.85%
4.97%
$300
$10 p.a.
95%
A flexible, competitive fixed rate loan that allows for extra repayments.
3.69%
3.75%
$600
$0 p.a.
80%
A low interest rate variable home loan with no ongoing fees.
3.79%
4.00%
$0
$10 monthly ($120 p.a.)
90%
Get a competitive interest rate for 3 years and a discounted variable rate when the fixed period ends.
3.94%
4.88%
$0
$0 p.a.
90%
Enjoy a low interest rate and borrow up to 90% (with LMI) of your property's value.
3.74%
3.74%
$0
$0 p.a.
90%
A competitive variable rate with a redraw facility. NSW, QLD and ACT residents only.
3.73%
3.73%
$0
$0 p.a.
70%
A special low variable rate for owner occupiers with 100% offset account and no application or ongoing fees.
3.84%
3.84%
$0
$0 p.a.
110%
Requires a family member to act as guarantor. Discounted rate available with family pledge loans. Family pledge loans require no LMI and no deposit. NSW, Qld and ACT only.
3.85%
4.18%
$500
$0 p.a.
95%
Apply for Easy Street fixed rate home loans and get a competitive loan with a fixed interest rate.
3.88%
4.89%
$0
$395 p.a.
95%
A fixed rate package with flexible repayment options. 350K NAB Rewards Points offer available. Terms and conditions apply.
3.96%
3.98%
$0
$0 p.a.
90%
Take advantage of a redraw facility, competitive variable rate and no application or settlement fees for a limited time.
3.97%
4.02%
$445
$0 p.a.
90%
Get a competitive rate without features you may not use.
3.99%
3.99%
$395
$0 p.a.
80%
A flexible low-rate variable home loan that lets you combine your loan with other financial products.
4.09%
4.11%
$0
$0 p.a.
80%
A low variable rate loan with no application or ongoing fees.
3.97%
4.02%
$0
$0 p.a.
90%
A discounted interest rate home loan with no monthly fees.
3.97%
3.97%
$0
$0 p.a.
90%
A competitive variable rate home loan with no ongoing fees.
3.79%
3.80%
$0
$0 p.a.
80%
A competitive rate with no ongoing monthly fees or application fees.
3.72%
4.19%
$0
$0 p.a.
80%
Enjoy a variable 3 year introductory rate with the Bankwest Equaliser Home Loan.
3.84%
4.83%
$0
$0 p.a.
95%
Get a competitive 2-year fixed rate with no application or ongoing fees.
3.69%
4.00%
$0
$350 p.a.
95%
Fix your rate for 3 years and borrow up to 95% LVR.
$0
$0 p.a.
A basic low-rate home loan that still offers some useful features.
3.74%
3.74%
$0
$0 p.a.
95%
A low rate home loan with no application or ongoing fees. Note that to be eligible for this loan you must be QLD resident.
3.69%
4.45%
$0
$375 p.a.
90%
Discount off an already competitive 2 year fixed rate for loans over $150k. NSW,QLD and ACT residents only.
4.09%
4.25%
$300
$10 monthly ($120 p.a.)
80%
Get a competitive investment home loan rate without expensive features you may not need.
3.99%
4.02%
$600
$0 p.a.
90%
Take advantage of a 0.60% discount on your rate, a 100% offset account and no ongoing fees.
3.99%
4.77%
$0
$0 p.a.
95%
A competitive 3 year fixed rate with a redraw facility and split loan options, plus no application fee.
3.69%
3.69%
$0
$0 p.a.
70%
Enjoy a low variable rate with no application and ongoing fees.
3.88%
4.88%
$0
$395 p.a.
95%
Lock in a discounted fixed rate with a low service fee.
4.33%
4.33%
$363
$0 p.a.
70%
A variable home loan with $0 annual or monthly fees.
3.99%
4.03%
$0
$0 p.a.
95%
Enjoy a basic home loan with a high LVR and no application or ongoing fees.
3.85%
4.95%
$0
$395 p.a.
95%
A discounted package rate for owner occupiers with the ability to package a Qantas rewards earning Amplify credit card. $1,500 cashback available for refinancers. Conditions apply.
3.99%
4.99%
$0
$395 p.a.
95%
A package home loan with fee free extra repayments available during the fixed term.
4.39%
5.42%
$300
$10 monthly ($120 p.a.)
95%
Borrow up to and fix in a 3 year home loan rate. Access your account via internet and phone banking.
3.69%
4.03%
$0
$299 p.a.
80%
Enjoy a low variable rate with no application fee.
5.29%
5.64%
$995
$15 monthly ($180 p.a.)
65%
Available for former bad credit borrowers who have had a clean credit file for the last 24 months. Loan can be used to purchase a property or refinance.
3.75%
4.44%
$0
$0 p.a.
95%
This competitive introductory rate is a limited time offer for new owner-occupiers
3.68%
3.69%
$600
$0 p.a.
90%
Get a low variable rate along with some important basic features.
5.59%
5.94%
$995
$15 monthly ($180 p.a.)
55%
Available for borrowers with bad credit history. Can be used for purchase or refinance even with negative listings on your credit file.

Compare up to 4 providers

Savings accounts

A rate hike from the RBA can lead to good things for people who have money tucked away in a savings account. If your bank matches the RBA’s rate rise and offers a higher interest rate on savings accounts, your balance is obviously going to be boosted as you earn increased interest on the money you have already saved.

As a general rule, rate hikes offer a much greater incentive for consumers to save their money rather than spend it.

However, just like with fixed home loans, term deposit accounts will not receive the benefit of an interest rate rise as their rates are locked in for a set period. Once your deposit matures, it may be time to shop around for an account that offers a better rate.

Compare Savings Accounts

Rates last updated November 23rd, 2017.

Bank of Melbourne Incentive Saver

Variable rate was changed from 1.85% to 1.75%

December 23rd, 2016

ANZ Online Saver

Bonus interest rate was changed from 1.60% to 1.40%

December 23rd, 2016

Westpac eSaver

Ongoing interest rate was changed from 1.25% to 1.05%

December 23rd, 2016

View latest updates

Debbie Mariano Debbie
$
Maximum Variable Rate p.a. Standard Variable Rate p.a. Bonus Interest p.a. Fees Min Bal / Min Deposit Monthly Account Fee
Bankwest Hero Saver
Ongoing, variable 2.60% p.a. rate when you deposit at least $200 each month and make no withdrawals. Available on balances up to $250,000.
2.60% 0.01% 2.59% $0 $0 / $0 Go to site More
HSBC Serious Saver
Introductory rate of 3.00% p.a. for 4 months, reverting to a rate of 1.60% p.a. Available on balances below $1,000,000.
3.00% 1.60% 1.40% $0 $0 / $0 Go to site More
ANZ Progress Saver
Ongoing, variable 1.81% p.a. when you deposit $10+ each month and make no withdrawals. Available on the entire balance.
1.81% 0.01% 1.80% $0 $10 / $10 Go to site More
Westpac Life
Earn up to 2.30% p.a. interest. No monthly account-keeping fee. Set savings goals and track your progress.
2.30% 1.50% 0.80% $0 $0 / $0 Go to site More
HSBC Flexi Saver Account
Ongoing, variable 2.50% p.a. when you deposit $300+ each month (other conditions apply). Available on balances up to $5,000,000.
2.50% 1.25% 1.25% $0 $0 / $0 Go to site More
Westpac Reward Saver
Ongoing, variable 1.50% p.a. when you deposit at least $50 and make no withdrawals each month. Available on the entire balance.
1.50% 0.01% 1.49% $0 $0 / $0 Go to site More
Westpac eSaver
Introductory rate of 2.51% p.a. for 5 months, reverting to a rate of 1.00% p.a. Available on the entire balance.
2.51% 1.00% 1.51% $0 $0 / $0 Go to site More
ANZ Online Saver
Introductory rate of 2.55% p.a. for 3 months, reverting to 0.80% p.a. Available on the entire balance.
2.55% 0.80% 1.75% $0 $0 / $0 Go to site More
St.George Maxi Saver
Introductory rate of 2.60% p.a. for 3 months, reverting to a rate of 0.80% p.a. Available on the entire balance.
2.60% 0.80% 1.80% $0 $1 / $1 Go to site More
Citibank Online Saver
Introductory rate of 2.85% p.a. for 4 months, reverting to a rate of 1.70% p.a. Available on balances below $500,000.
2.85% 1.70% 1.15% $0 $0 / $0 Go to site More
Bank of Melbourne Incentive Saver
Ongoing, variable 2.00% p.a. when you make at least one deposit and no withdrawals each month. Available on the entire balance.
2.00% 0.80% 1.20% $0 $1 / $1 Go to site More
BankSA Maxi Saver
Introductory rate of 2.60% p.a. for 3 months, reverting to a rate of 0.80% p.a. Available on the entire balance.
2.60% 0.80% 1.80% $0 $1 / $1 Go to site More
Bank of Melbourne Maxi Saver
Introductory rate of 2.60% p.a. for 3 months, reverting to 0.80% p.a. Available on the entire balance.
2.60% 0.80% 1.80% $0 $0 / $0 Go to site More
BankSA Incentive Saver Account
Ongoing, variable 2.00% p.a. when you make at least one deposit each month and no withdrawals. Available on the entire balance.
2.00% 0.80% 1.20% $0 $0 / $0 Go to site More
Credit cards

Interest rate rises could make a difference if you have credit card debt or if you regularly use your card to make purchases and don’t pay off the balance in full each month. A rise in the cash rate could reduce inflation which means that the value of your debt stays the same. However, you won’t feel the impact of this until there are multiple rate increases.

Compare credit cards

Rates last updated November 23rd, 2017
Name Product Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee Product Description
St.George Vertigo Platinum - Online Offer
12.74% p.a.
0% p.a. for 24 months
$0 p.a. annual fee for the first year ($99 p.a. thereafter)
Platinum Credit Card with Balance Transfer Offer
A low rate Platinum card with a long-term, no fee balance transfer offer, up to 55 interest-free days on purchases and complimentary insurances.
Qantas Premier Platinum
19.99% p.a.
0% p.a. for 15 months
$149 p.a. annual fee for the first year ($299 p.a. thereafter)
75,000 bonus Qantas Points with Balance Transfer Offer
Fly faster with up to 2 Qantas Points per $1 spent, receive 2 yearly complimentary Qantas Club lounge invitations, plus, included travel insurance.
Woolworths Everyday Platinum Credit Card
19.99% p.a.
0% p.a. for 14 months
$0 p.a. annual fee for the first year ($49 p.a. thereafter)
Supermarket Platinum Credit Card Offer
Receive a $50 Woolworths eGift Card when you apply by 31 January 2018. Earn up to 3 points per $1 spent at Woolworths stores.
Virgin Australia Velocity Flyer Card - Bonus Points Offer
20.74% p.a.
0% p.a. for 18 months
$64 p.a. annual fee for the first year ($129 p.a. thereafter)
Up to 60,000 bonus Velocity Points with Balance Transfer Offer*
Earn up to 60,000 bonus Velocity Points in the first 3 months on eligible spend and enjoy a 0% p.a. for 18 months on balance transfers.
HSBC Platinum Credit Card
19.99% p.a.
0% p.a. for 22 months with 2% balance transfer fee
$129 p.a.
Platinum Credit Card with a Balance Transfer Offer*
A long-term balance transfer card that earns uncapped HSBC Rewards Plus points per $1 spent, plus, complimentary insurance covers.
St.George Vertigo Visa - Online Offer
13.24% p.a.
0% p.a. for 18 months
$0 p.a. annual fee for the first year ($55 p.a. thereafter)
First Year Annual Fee Waiver with Balance Transfer Offer*
Consolidate your debt and save with a competitive variable purchase rate and up to 55 interest-free days on purchases.
Citi Rewards Platinum Credit Card
20.99% p.a.
0% p.a. for 24 months with 1.5% balance transfer fee
$49 p.a. annual fee for the first year ($149 p.a. thereafter)
0% p.a. for 24 months Balance Transfer Offer*
Pay no interest on balance transfers for 2 years, earn Citi Reward Points on purchases and receive complimentary travel insurance.
ANZ Platinum Credit Card - Exclusive Offer
0% p.a. for 3 months (reverts to 19.74% p.a.)
0% p.a. for 12 months
$0 p.a. annual fee for the first year ($87 p.a. thereafter)
Platinum Card with 0% interest rates on purchases and balance transfers
An exclusive credit card offer through finder.com.au that features 0% interest on both purchases and balance transfers.
Bankwest Breeze Classic Mastercard
0% p.a. for 13 months (reverts to 12.99% p.a.)
0% p.a. for 13 months with 2% balance transfer fee
$79 p.a.
0% p.a. for 13 months Balance Transfer and Purchase Offer*
Save with a competitive low variable purchase rate and up to 55 interest-free days on purchases.
Westpac Low Rate Card - Online Only Balance Transfer Offer
13.49% p.a.
0% p.a. for 24 months with 2% balance transfer fee
$59 p.a.
Long-Term Balance Transfer Offer
Take advantage of 0% p.a. for 24 months on balance transfers with a 2% balance transfer fee when you apply online by 31 January 2018.
NAB Premium Card
19.74% p.a.
0% p.a. for 20 months with 2% balance transfer fee
$90 p.a.
Platinum Credit Card with Balance Transfer Offer*
Enjoy Platinum benefits including complimentary travel insurance, a 24/7 concierge and Visa Front Line Access.
Citi Platinum Credit Card - 100k Bonus Points
20.99% p.a.
0% p.a. for 15 months with 1% balance transfer fee
$49 p.a. annual fee for the first year ($149 p.a. thereafter)
Bonus Points & Balance Transfer Offer
Earn 100,000 reward Points, take advantage of a long-term balance transfer offer and receive complimentary travel insurance.
Bankwest Breeze Platinum Mastercard
0% p.a. for 13 months (reverts to 12.99% p.a.)
0% p.a. for 13 months with 2% balance transfer fee
$99 p.a.
Low Rate Platinum Card with No Foreign Transaction Fees *
Benefit from 0% p.a. for 13 months on balance transfers, platinum privileges and 0% foreign transaction fees on overseas and online purchases.
Bendigo Bank Low Rate Mastercard
11.99% p.a.
$45 p.a.
A no-frills card with a competitive annual fee and a low variable interest rate of 11.99% p.a. on purchases.
NAB Low Fee Card
19.74% p.a.
0% p.a. for 16 months with 2% balance transfer fee
$30 p.a.
Low Annual Fee & Balance Transfer Offer
Receive up to 44 interest-free days on purchases and complimentary Purchase Protection Insurance.
Virgin Money Low Rate Credit Card
11.99% p.a.
0% p.a. for 14 months
$49 p.a.
Low Purchase Rate & Balance Transfer Offer*
Enjoy a low ongoing purchase rate, $100 cashback and a long-term balance transfer.
Virgin Australia Velocity Flyer Card - 0% Interest Offer
0% p.a. for 12 months (reverts to 20.74% p.a.)
0% p.a. for 6 months
$129 p.a.
Platinum Card with Purchase Offer
Save with 0% p.a. on purchases for 12 months and rack up Velocity Points by earning up to 0.66 points per $1 spent.
HSBC Platinum Qantas Credit Card
19.99% p.a.
0% p.a. for 6 months
$199 p.a.
International Frequent Flyer Credit Card*
Receive 60,000 bonus Qantas Points on eligible spend within 3 months, plus, earn 1 Qantas Point per $1 spent on purchases.
ANZ Frequent Flyer Platinum
19.99% p.a.
$0 p.a. annual fee for the first year ($295 p.a. thereafter)
Platinum Frequent Flyer Credit Card Offer*
Receive 65,000 bonus Qantas Points when you spend $2,500 on eligible purchases for the first three months.

Compare up to 4 providers

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