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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

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Your filter criteria do not match any product
Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment
loans.com.au Essentials - Variable (Owner Occupier, P&I)
A basic home loan with a competitive rate and low fees.
3.64% 3.66% $0 $0 p.a. 80% Go to site More info
Greater Bank Ultimate Home Loan - Discounted 1 Year Fixed LVR ≤85% ($150K+ Owner Occupier)
Discount off an already competitive interest rate for loans over $150k. NSW, QLD and ACT residents only.
3.59% 4.48% $0 $375 p.a. 85% Go to site More info
UBank UHomeLoan Variable Rate - Standard Variable Rate Value Offer (Owner Occupier P&I)
Combine a low variable interest rate and free redraw with no application or ongoing fees.
3.74% 3.74% $0 $0 p.a. 80% Go to site More info
3.69% 3.72% $0 $0 p.a. 80% Go to site More info
NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier P&I) First Home Buyer Special
A special rate for first home buyers buying residential property and borrowing over $150K. 350K NAB Rewards Points offer available. Terms and conditions apply.
3.69% 4.86% $0 $395 p.a. 90% Go to site More info
loans.com.au Offset Variable - Up to 80% LVR (Owner Occupier P&I)
Take advantage of a 100% offset account along with no annual or application fees.
3.72% 3.74% $0 $0 p.a. 80% Go to site More info
ING DIRECT Orange Advantage Loan - $150,000+ (LVR <=80% Owner Occupier, P&I)
A fully featured home loan with an offset account and discounts available. $1000 cashback offer available for loans over $300k. Terms and conditions apply.
3.79% 4.11% $0 $299 p.a. 80% Go to site More info
HSBC Home Value Loan - Resident Owner Occupier only
Enjoy a low variable rate with no ongoing fees and borrow up to 90% of the value of the property.
3.85% 3.86% $0 $0 p.a. 90% Go to site More info
State Custodians Low Rate LOC - LVR 80% to 90% (Owner Occupier)
Borrow up to 90% of property's value and pay no application fee.
3.79% 3.82% $0 $0 p.a. 90% Go to site More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 2 Year Fixed (Owner Occupier Special Rate, P&I)
Owner-occupiers can lock in a competitive rate with no ongoing fees. Conditions apply.
3.84% 4.86% $0 $0 p.a. 95% Go to site More info
NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier P&I)
A fixed rate package with flexible repayment options. 350K NAB Rewards Points offer available. Terms and conditions apply.
3.88% 4.89% $0 $395 p.a. 95% Go to site More info
Greater Bank Great Rate Discount Variable with Family Pledge Home Loan - Up to 110% LVR
Discounted rate available with family pledge loans. Family pledge loans require no LMI and no deposit. NSW, Qld and ACT only.
3.99% 3.99% $0 $0 p.a. 110% Go to site More info
3.99% 4.04% $600 $0 p.a. 90% Go to site More info
IMB Budget Home Loan - LVR <=90% (Owner Occupier)
Get a competitive rate without features you may not use.
3.97% 4.02% $445 $0 p.a. 90% Go to site More info
Finsure Home Loan Deal
Enjoy a low variable rate with no application fee.
3.69% 4.03% $0 $299 p.a. 80% Enquire now More info
P&N Bank & Home Loan & Bag
A flexible low-rate variable home loan that lets you combine your loan with other financial products.
3.99% 4.02% $395 $0 p.a. 80% Go to site More info
ME Flexible Home Loan Fixed - 2 Year Fixed Rate (Owner Occupier, P&I)
No application or ongoing fees and a competitive 2 year fixed rate.
3.74% 4.81% $0 $0 p.a. 95% Go to site More info
Select Encompass Credit Union Special Offer 2 Year Fixed Rate Home Loan
A fixed rate loan with limited fees and a competitive interest rate.
3.74% 4.15% $0 $0 p.a. 95% Go to site More info
Beyond Bank Low Rate Special Home Loan - LVR <70%
A special low variable rate for owner occupiers with 100% offset account and no application or ongoing fees.
3.83% 3.83% $0 $0 p.a. 70% Go to site More info
Auswide Bank Variable Home Loan Plus with Freedom Package - $150K+ LVR <= 90% (Special Offer, Owner Occupier)
A high maximum LVR home loan with redraw facility and additional payments.
3.69% 4.08% $0 $395 p.a. 90% Go to site More info
Newcastle Permanent Building Society Premium Plus Package Home Loan - New Customer Offer ($150,000+ Owner Occupier, P&I)
Apply for a new owner occupier loan or refinance from another lender and receive this discounted rate.
3.84% 4.22% $0 $395 p.a. 95% Go to site More info
Mortgage House Advantage Variable Home Loan - 70 (PAYG Special No Offset)
A home loan with a competitive interest rate and flexible repayment that has a maximum LVR of 70%.
3.64% 3.66% $0 $0 p.a. 70% Go to site More info
Greater Bank Ultimate Home Loan - Discounted 2 Year Fixed LVR ≤85% ($150K+ Owner Occupier)
Discount off an already competitive 2 year fixed rate for loans over $150k. NSW,QLD and ACT residents only.
3.79% 4.46% $0 $375 p.a. 85% Go to site More info
QT Mutual Bank Mortgage Saver Home Loan
A low rate home loan with no application or ongoing fees. Note that to be eligible for this loan you must be QLD resident.
3.95% 3.95% $0 $0 p.a. 95% Go to site More info
4.59% 4.90% $0 $0 p.a. 95% Enquire now More info
Greater Bank Great Rate Home Loan - Discounted Variable ($150K+ Owner Occupier)
A competitive variable rate with a redraw facility. NSW, QLD and ACT residents only.
3.99% 3.99% $0 $0 p.a. 85% Go to site More info
NAB Base Variable Rate Home Loan - Owner Occupier (P&I)
A competitive no frills home loan. 350K NAB Rewards Points offer available. Terms and conditions apply.
4.17% 4.21% $600 $0 p.a. 95% Go to site More info
IMB Essential Home Loan - LVR <=90% (Owner Occupier)
Get access to a redraw facility and offset account without the annual fee.
4.19% 4.19% $0 $0 p.a. 90% Go to site More info
ME Basic Home Loan - LVR <=80% (Owner Occupier, P&I)
A low variable rate loan with no application or ongoing fees.
4.09% 4.11% $0 $0 p.a. 80% Go to site More info
NAB Choice Package Variable Rate - $250k to $749,999 P&I (Owner Occupier)
Package your home loan to get discounts on your interest rate and other financial products.
4.39% 4.78% $0 $395 p.a. 95% Go to site More info
ME Flexible Home Loan Fixed - 3 Year Fixed Rate (Owner Occupier, P&I)
A competitive 3 year fixed rate with a redraw facility and split loan options, plus no application fee.
3.99% 4.77% $0 $0 p.a. 95% Go to site More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 2 Years Fixed (Standard Rate, P&I)
Enjoy a low interest rate and borrow up to 95% (with LMI) of your property's value.
4.14% 4.92% $0 $0 p.a. 95% Go to site More info
4.59% 4.93% $0 $0 p.a. 95% Enquire now More info
NAB Choice Package Home Loan - 5 Year Fixed (Owner Occupier P&I)
A competitive loan with flexible features. 350K NAB Rewards Points offer available. Terms and conditions apply.
4.59% 5.01% $0 $395 p.a. 95% Go to site More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 3 Years Fixed (Standard Rate, P&I)
Split your loan for free with one of the lowest fixed home loan rates.
4.19% 4.86% $0 $0 p.a. 95% Go to site More info
Bank of Queensland Fixed Rate Home Loan - 3 Year Fixed Rate (Owner Occupier, P&I)
Borrow up to and fix in a 3 year home loan rate. Access your account via internet and phone banking.
4.39% 5.42% $300 $10 monthly ($120 p.a.) 95% Enquire now More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 3 Year Fixed (Owner Occupier Special Rate, P&I)
A limited time fixed rate home loan with extra repayment abilities. Conditions apply.
3.89% 4.78% $0 $0 p.a. 95% Go to site More info
ANZ Simplicity PLUS Home Loan - Special Offer (Owner Occupier, P&I)
Enjoy a basic home loan with a high LVR and no application or ongoing fees.
4.03% 4.07% $0 $0 p.a. 95% Enquire now More info
3.78% 3.79% $600 $0 p.a. 90% Enquire now More info
St.George Basic Home Loan - Promotional Rate (Owner Occupier, P&I)
A no frills loan with a competitive rate and a maximum LVR of 95%.
3.80% 3.81% $0 $0 p.a. 95% Enquire now More info
Commonwealth Bank Wealth Package Fixed Home Loan - 2 Year Fixed (Owner Occupier) P&I
A package home loan with fee free extra repayments available during the fixed term.
3.99% 4.99% $0 $395 p.a. 95% Enquire now More info
St.George Fixed Rate Advantage Package -  2 Year Fixed Rate (Owner Occupier, P&I)
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% 4.98% $0 $395 p.a. 95% Enquire now More info
Westpac Fixed Options Home Loan Premier Advantage Package - 2 Years, P&I
Lock in a discounted fixed rate with a low service fee.
3.88% 4.88% $0 $395 p.a. 95% Enquire now More info
Virgin Reward Me Variable Home Loan - LVR <= 80% ($750k+ Owner Occupier, P&I)
Earn Velocity points on a competitive variable rate home loan with flexible features.
3.79% 3.92% $0 $10 monthly ($120 p.a.) 80% Enquire now More info
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 July 29th, 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 Reward Saver

Introductory interest rate was changed from 1.84% to 1.74%

December 23rd, 2016

View latest updates

Debbie Mariano Debbie
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months
Maximum Variable Rate p.a. Standard Variable Rate p.a. Bonus Interest p.a. Fees Min Bal / Min Deposit Interest Earned
ING DIRECT Savings Maximiser
Ongoing, variable 2.80% p.a. when you link to an ING Orange Everyday bank account and deposit $1,000+ each month. Available on balances up to $100,000.
2.80% 1.50% 1.30% $0 $0 / $0 Go to site More
Bankwest Hero Saver
Ongoing, variable 2.65% p.a. rate when you deposit at least $200 each month and make no withdrawals. Available on balances up to $250,000.
2.65% 0.01% 2.64% $0 $0 / $0 Go to site More
ME Online Savings Account
Ongoing, variable 3.05% p.a. rate when you link to a ME Everyday Transaction account and make a weekly purchase with your Debit Mastercard using tap & go. Available on balances up to $250,000.
3.05% 1.30% 1.75% $0 $0 / $0 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
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 Online Saver
Introductory rate of 2.55% p.a. for 3 months, reverting to 1.00% p.a. Available on the entire balance.
2.55% 1.00% 1.55% $0 $0 / $0 Go to site More
Westpac Reward Saver
Ongoing, variable 1.75% p.a. when you deposit at least $50 and make no withdrawals each month. Available on the entire balance.
1.75% 0.01% 1.74% $0 $0 / $0 Go to site More
Bank of Melbourne Incentive Saver
Ongoing, variable 1.75% p.a. when you make at least one deposit and no withdrawals each month. Available on the entire balance.
1.75% 0.01% 1.74% $0 $1 / $1 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
BankSA Incentive Saver Account
Ongoing, variable 1.75% p.a. when you make at least one deposit each month and no withdrawals. Available on the entire balance.
1.75% 0.01% 1.74% $0 $0 / $0 Go to site More
P&N Hi Saver Account
Introductory rate of 2.95% p.a. for 4 months, reverting to a rate of 1.25% p.a. Available on balances of $5,000 and above.
2.95% 1.25% 1.70% $0 $5,000 / $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 July 29th, 2017
Name Product Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee Product Description
NAB Premium Card - Exclusive Offer
19.74% p.a.
0% p.a. for 24 months
$90 p.a.
Platinum Card with an Exclusive Balance Transfer Offer
Exclusive to finder.com.au, enjoy a long-term balance transfer offer of 0% p.a. for 24 months (with no BT fee), travel insurance and a 24/7 concierge.
St.George Vertigo Platinum
12.74% p.a.
0% p.a. for 20 months
$99 p.a.
Low Rate Platinum Credit Card Offer
A low rate Platinum card with a long-term balance transfer offer, up to 55 interest-free days on purchases and complimentary insurance covers.
Virgin Australia Velocity Flyer Card - Exclusive Offer
20.74% p.a.
0% p.a. for 18 months
$64 p.a. annual fee for the first year ($129 p.a. thereafter)
Velocity Rewards Credit Card with a Balance Transfer Offer*
Apply by 31 July 2017 to earn bonus Velocity Points for the first 3 months, plus receive a $129 Virgin Australia Gift Voucher each year.
HSBC Platinum Credit Card
19.99% p.a.
0% p.a. for 22 months with 2% balance transfer fee
$99 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.
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.
Qantas American Express Ultimate Card - Online Offer
20.74% p.a.
0% p.a. for 12 months with 1% balance transfer fee
$450 p.a.
Frequent Flyer Card with a Bonus Points Offer
Apply by 31 July 2017 to earn 100,000 bonus Qantas Points and receive 2 American Express Airport Lounge entries each calendar year.
Bank of Melbourne Vertigo Platinum
12.74% p.a.
0% p.a. for 20 months
$99 p.a.
Low Rate Platinum with a Long-term Balance Transfer Offer
Platinum credit card with a 20-month balance transfer offer, complimentary insurances, a 24/7 concierge and price guarantee cover.
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.
St.George Vertigo Visa
13.24% p.a.
0% p.a. for 14 months
$0 p.a. annual fee for the first year ($55 p.a. thereafter)
$0 First Year Annual Fee with Balance Transfer Offer*
Consolidate your debt and save with a competitive variable purchase rate and up to 55 interest-free days 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.
Bendigo Bank Basic Black Credit Card
12.24% p.a.
$45 p.a.
Long-Term Low Purchase Rate
A no-frills card that allows you to receive up to 44 interest-free days on purchases and add an additional cardholder for $0.
Suncorp Clear Options Platinum Credit Card - Exclusive Offer
20.74% p.a.
0% p.a. for 18 months
$99 p.a. annual fee for the first year ($129 p.a. thereafter)
Exclusive Balance Transfer Card Offer*
Receive a discounted annual fee in the first year, a long-term balance transfer offer and earn 1.25 Suncorp Rewards Points per $1 spent.
HSBC Low Rate Credit Card
13.25% p.a.
0% p.a. for 15 months with 2% balance transfer fee
$55 p.a.
Long-term Balance Transfer Offer*
Enjoy the benefits of the home&Away Privilege Program, the ability to pay using Apple Pay and a low annual fee for the life of the card.
American Express Velocity Platinum Card
20.74% p.a.
0% p.a. for 12 months with 1% balance transfer fee
$375 p.a.
100,000 Velocity Points Credit Card*
Earn up to 100,000 bonus Velocity Points on signup when you apply and spend $1,500 on your new card within the first 3 months.
NAB Low Rate Platinum Card
13.99% p.a.
0% p.a. for 16 months with 2% balance transfer fee
$100 p.a.
Platinum Credit Card with an introductory Balance Transfer Rate*
Receive complimentary purchase and travel insurance, a 24/7 concierge service and Visa Front Line access.
HSBC Platinum Qantas Credit Card
19.99% p.a.
$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.
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 $100 Woolworths eGift Card when you apply by 30 September 2017. Earn up to 3 points per $1 spent at Woolworths stores.
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.
American Express Essential®  Credit Card
14.99% p.a.
0% p.a. for 12 months with 1% balance transfer fee
$0 p.a.
$0 Fee Card with Balance Transfer Offer
Earn 1.00 Membership Rewards point per $1 spent on eligible purchases and pay no annual fee for the life of the card.

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NAB Choice Package Home Loan - 2 Year Fixed (Owner Occupier P&I)

A fixed rate package with flexible repayment options. 350K NAB Rewards Points offer available. Terms and conditions apply.

Greater Bank Ultimate Home Loan - Discounted 1 Year Fixed LVR ≤85% ($150K+ Owner Occupier)

Discount off an already competitive interest rate for loans over $150k. NSW, QLD and ACT residents only.

IMB Budget Home Loan - LVR <=90% (Owner Occupier)

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HSBC Home Value Loan - Resident Owner Occupier only

Enjoy a low variable rate with no ongoing fees and borrow up to 90% of the value of the property.

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