What does an interest rate rise mean for you?

Rates and Fees verified correct on February 24th, 2017

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 February 24th, 2017.

Newcastle Permanent Building Society Fixed Rate Home Loan - 2 Years Fixed (Owner Occupier)

Comparative rate increases by 0.04% | Interest rate increases by 0.25%

February 13th, 2017

Newcastle Permanent Building Society Fixed Rate Home Loan - 3 Years Fixed (Owner Occupier)

Comparison rate increases by 0.05% | Interest rate increases by 0.20%

February 13th, 2017

HSBC Home Value Loan - Resident Owner Occupier only

Application fee waived for Resident Owner Occupier only.

February 15th, 2017

View latest updates

Jodie Humphries Jodie
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Loan purpose
Offset account
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Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment
Newcastle Permanent Building Society Premium Plus Package Home Loan - New Customer Offer ($150,000+ Owner Occupier)
Apply for a new owner occupier loan or refinance from another lender and receive this discounted rate.
3.74% 4.12% $0 $395 p.a. 95% Go to site More info
HSBC Home Value Loan - Resident Owner Occupier only
Enjoy the low variable rate with $0 ongoing fee and borrow up to 90% LVR.
3.75% 3.77% $0 $0 p.a. 90% 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% 4.42% $0 $375 p.a. 85% Go to site More info
IMB Budget Home Loan - LVR <=90% (Owner Occupier)
A competitive budget rate without any unwanted bells and whistles.
3.87% 3.92% $445 $0 p.a. 90% Go to site More info
Beyond Bank Low Rate Special Home Loan
A special low variable rate for Owner Occupier with 100% offset account and no application or ongoing fees.
3.73% 3.73% $0 $0 p.a. 70% Go to site More info
Switzer Home Loan
No upfront or ongoing fees and a competitive variable rate for owner occupiers.
3.89% 3.89% $0 $0 p.a. 90% Go to site More info
Auswide Bank Home Loan Plus with Freedom Package - Special Package Discount LVR <= 90% (Owner Occupier) P&I
A high maximum LVR home loan with redraw facility and additional payments.
3.79% 4.18% $0 $395 p.a. 90% Go to site More info
CUA Fresh Start Basic Variable Home Loan - Owner Occupier
A basic mortgage with flexible repayments options.
3.89% 3.94% $600 $0 p.a. 90% Go to site More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 2 Year Fixed (Owner Occupier Special Rate)
A limited time 2 year fixed rate for owner occupiers. Conditions apply.
3.89% 4.79% $0 $0 p.a. 95% Go to site More info
3.85% 4.26% $0 $395 p.a. 80% Go to site More info
ING  DIRECT Orange Advantage Loan - $150,000+ (LVR <= 80% Owner Occupier)
A competitive variable interest home loan offer from ING DIRECT.
3.89% 4.11% $0 $199 p.a. 80% Go to site More info
Bank Australia Basic Home Loan - Variable (Owner Occupier)
A competitive variable that allows borrowers to borrow a minimum of $100,000 with a $0 ongoing fee.
3.79% 3.83% $0 $0 p.a. 80% Go to site More info
CUA Fixed Rate Home Loan - 2 Year Fixed (Owner Occupier)
A fixed home loan with no ongoing fees and flexible repayments options.
3.84% 4.59% $600 $0 p.a. 95% Go to site More info
Australian Unity Kick Starter Home Loan
$0 ongoing service fees, maximum 80% LVR and a linked transaction account.
3.79% 3.82% $600 $0 p.a. 80% Go to site More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 3 Year Fixed (Owner Occupier Special Rate)
A limited time fixed rate home loan with extra repayment abilities. Conditions apply.
3.99% 4.73% $0 $0 p.a. 95% Go to site More info
3.94% 4.33% $0 $395 p.a. 90% Go to site More info
Bank Australia Premium Home Loan Package - 2 Year Fixed (Owner Occupier) LVR < 80%
A discounted 2 year fixed rate loan with high maximum LVR and no application fee.
3.69% 4.31% $0 $350 p.a. 95% Go to site More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 2 Years Fixed (Owner Occupier)
Enjoy a low interest rate and borrow up to 95% (with LMI) of your home value.
4.49% 4.90% $0 $0 p.a. 95% Go to site More info
Greater Bank Great Rate Home Loan - Discounted Variable ($150K+ Owner Occupier)
A competitive rate with redraw facility. NSW, QLD and ACT residents only.
3.89% 3.89% $0 $0 p.a. 85% Go to site More info
Bank Australia Premium Home Loan Package - LVR<=80% $700k + (Owner Occupier)
Enjoy the discounted interest rate with redraw facility and no ongoing fees.
3.82% 4.17% $595 $350 p.a. 95% Go to site More info
AMP Essential Home Loan  -  $100,000 and above (Owner Occupier)
Take advantage of a redraw facility, competitive variable rate and no application or settlement fees for a limited time.
3.89% 3.91% $350 $0 p.a. 90% Go to site More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 1 Year Fixed (Owner Occupier)
Get a short term fixed rate for that investment property with no application or ongoing fees.
4.49% 4.95% $0 $0 p.a. 95% Go to site More info
ME Flexible Home Loan Fixed - 3 Year Fixed Rate (Owner Occupier)
A competitive 3 year fixed rate with a redraw facility and split loan options, plus no application fee.
4.09% 4.80% $0 $0 p.a. 95% Go to site More info
Australian Unity Health, Wealth and Happiness Package - (Owner Occupier)
Get a 0.60% discount on your rate, a 100% offset account and no ongoing fees.
4.05% 4.08% $600 $0 p.a. 90% Go to site More info
Australian Unity Wealth Builder Investor Package Home Loan - Variable
An investment loan with no ongoing fees and borrow up to 90% LVR.
4.19% 4.22% $600 $0 p.a. 90% Go to site More info
Newcastle Permanent Building Society Fixed Rate Home Loan - 3 Years Fixed (Owner Occupier)
Split your loan for free with one of the lowest fixed home loan rates.
4.59% 4.89% $0 $0 p.a. 95% Go to site More info
IMB Essential Home Loan - LVR <=90% (Owner Occupier)
Get a discount on your rate and flexible repayment options with this loan.
4.09% 4.09% $0 $0 p.a. 90% Go to site More info
ANZ Simplicity PLUS Home Loan - Special Offer (Owner Occupier)
Enjoy a home loan with no aplication fee or ongoing fee.
4.03% 4.07% $0 $0 p.a. 95% Enquire now
3.88% 3.89% $600 $0 p.a. 90% Enquire now
Westpac Flexi First Option Home Loan - 3 Years Introductory Special Offer (New Owner Occupier, P&I)
A limited time deal for new owner occupiers. Advertised rate includes 1.03%p.a. discount for the first two years.
3.99% 4.37% $0 $0 p.a. 95% Enquire now
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%.
4.08% 4.09% $0 $0 p.a. 95% Enquire now
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% 5.00% $0 $395 p.a. 95% Enquire now
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 cash back available for refinancers, conditions apply.
3.99% 5.04% $0 $395 p.a. 95% Enquire now
Westpac Fixed Options Home Loan Premier Advantage Package - 2 Years
A low interest rate home loan and competitive two year fixed rate.
4.19% 5.32% $0 $395 p.a. 95% Enquire now
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 February 24th, 2017.

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

Westpac eSaver

Ongoing interest rate was changed from 1.25% to 1.05%

December 23rd, 2016

View latest updates

Debbie Mariano Debbie
$
$
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 3.00% 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.
3.00% 1.60% 1.40% $0 $0 / $0 Open 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 Open More
Bank Australia Bonus Saver Account
Ongoing, variable 2.60% p.a. when you deposit at least $100 and make no withdrawals. Available on the entire balance.
2.60% 0.15% 2.45% $0 $0 / $1 Open 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 Open More
Bank Australia mySaver Account
Ongoing, variable 2.60% p.a. when you deposit $10+ each month. Available on the entire balance and to customers under the age of 25.
2.60% 0.15% 2.45% $0 $0 / $10 Open More
ANZ Progress Saver
Ongoing, variable 1.91% p.a. when you link to any Australian everyday bank account and deposit $10+ each month. Available on the entire balance.
1.91% 0.01% 1.90% $0 $10 / $10 Open More
Bank Australia Online Saver Account
Ongoing, variable rate up to 1.65% p.a. when you link to a Bank Australia Everyday Access or Pension Access or a mortgage offset account. Available on balances more than $5,000.
1.65% 1.65% 0.00% $0 $150,000 / $5,000 Open More
Westpac eSaver
Introductory rate of 2.51% p.a. for 5 months, reverting to a rate of 1.05% p.a. Available on the entire balance.
2.51% 1.05% 1.46% $0 $0 / $0 Open More
ING DIRECT Savings Accelerator
Ongoing, variable 2.35% p.a. applies on balances $150,000 and over.
2.35% 2.35% 0.00% $0 $0 / $0 Open More
BankSA Maxi Saver
Introductory rate of 2.75% p.a. for 3 months, reverting to a rate of 1.00% p.a. Available on the entire balance.
2.75% 1.00% 1.75% $0 $1 / $1 Open More
ANZ Online Saver
Introductory rate of 2.65% p.a. for 3 months, reverting to 1.25% p.a. Available on the entire balance.
2.65% 1.25% 1.40% $0 $0 / $0 Open More
Bank of Melbourne Maxi Saver
Introductory rate of 2.75% p.a. for 3 months, reverting to 1.00% p.a. Available on the entire balance.
2.75% 1.00% 1.75% $0 $1 / $1 Open 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 Open 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 Open 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 Open 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 February 24th, 2017.

Virgin No Annual Fee Credit Card

Balance transfer and $100 cashback offers have been extended until 28 February 2017.

January 16th, 2017

NAB Premium Card

Balance transfer period changed from 15 to 24 months, and is valid until 31 May 2017.

January 23rd, 2017

St.George Vertigo Visa

Balance transfer offer has been changed to 0% p.a. for 12 months and is valid until 1 May 2017.

February 21st, 2017

View latest updates

Jonathan Choi Jonathan
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
Velocity Rewards Credit Card with a Balance Transfer Offer*
Earn 2 bonus Velocity Points in your first 3 months and receive a balance transfer offer of 0% p.a. for 18 months. Receive a free Virgin Australia $129 Gift Voucher each year.
20.74% p.a. 0% p.a. for 18 months $64 p.a. annual fee for the first year ($129 p.a. thereafter) Go to site More info
HSBC Platinum Credit Card
Platinum Credit Card with a Balance Transfer Offer*
HSBC Platinum Credit Card offers an annual fee refund when you spend a minimum of $6,000 per year. You can also enjoy an introductory balance transfer rate of 0% p.a. for 15 months.
19.99% p.a. 0% p.a. for 15 months $149 p.a. Go to site More info
ANZ Platinum Credit Card - Exclusive Offer
Platinum Card with 0% interest rates on purchases and balance transfers
Pay a competitive annual fee and also receive 0% p.a. for 12 months on balance transfers and purchases.
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) Go to site More info
American Express Essential Credit Card
$0 Fee Card with Balance Transfer Offer
0% p.a. for 12 months on balance transfers combined with no annual fee, reward points and insurances.
14.99% p.a. 0% p.a. for 12 months with 1% balance transfer fee $0 p.a. Go to site More info
Citi Rewards Credit Card - Platinum Card
0% for 24 months Balance Transfer Offer*
Enjoy a low and long term balance transfer offer and reduced annual fee for the first year.
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) Go to site More info
HSBC Platinum Qantas Credit Card
International Frequent Flyer Credit Card*
Receive 60,000 bonus Qantas Points on eligible spend within 3 months, 1 Qantas Point per $1 spent and complimentary international travel insurance.
19.99% p.a. $199 p.a. Go to site More info
NAB Premium Card
Platinum Credit Card with Balance Transfer Offer*
Enjoy Platinum benefits including complimentary travel insurance, 24/7 concierge plus a low interest rate on balance transfers.
19.74% p.a. 0% p.a. for 24 months with a one off 3% balance transfer fee $90 p.a. Go to site More info
St.George Vertigo Visa
Low Rate Credit Card & Long Term Balance Transfer Offer*
Enjoy a balance transfer offer of 0% p.a. for 12 months with a low annual fee from St.George
0% p.a. for 6 months (reverts to 13.24% p.a.) 0% p.a. for 12 months $55 p.a. Go to site More info
Bank of Melbourne Vertigo Visa Credit Card
Low Purchase Rate*
Enjoy 0% p.a. for up to 6 months on everyday purchases and 0% p.a. for 12 months on balance transfers.
0% p.a. for 6 months (reverts to 13.24% p.a.) 0% p.a. for 12 months $55 p.a. Go to site More info
Virgin No Annual Fee Credit Card
No Annual Fee with Balance Transfer Plus Cashback Offer
A no annual fee card with an introductory balance transfer offer and $100 cashback.
18.99% p.a. 0% p.a. for 18 months with 2% balance transfer fee $0 p.a. Go to site More info
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HSBC Home Value Loan - Resident Owner Occupier only

Enjoy the low variable rate with $0 ongoing fee and borrow up to 90% LVR.

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.

Newcastle Permanent Building Society Premium Plus Package Home Loan - New Customer Offer ($150,000+ Owner Occupier)

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