Your mortgage could increase by $500+ per month – here’s why
Westpac predicts 6 mortgage rate rises before Easter 2024. If they're on the money, how much could this cost you?
And more importantly – is there anything you can do about it?
The short answer is yes. You can get in front of these predicted variable rate rises by locking your mortgage into a fixed rate loan, pronto.
Westpac aren't alone in changing their rate predictions: on our RBA panel of 40 economists and property experts, almost half of them expect interest rates to increase sooner than later.
If Westpac's prediction of 6 rate hikes does come true, how much would you expect to pay for your home loan?
I ran the numbers on principal and interest mortgages, and here's the result:
| Mortgage value | Current monthly repayment at 2% | Future monthly repayment at 3.4% | Difference per month / year |
|---|---|---|---|
| $300,000 | $1,109 | $1,331 | $222 / $2,664 |
| $500,000 | $1,849 | $2,218 | $369 / $4,428 |
| $750,000 | $2,773 | $3,327 | $554 / $6,648 |
| $1,000,000 | $3,697 | $4,435 | $738 / $8,856 |
Source: Finder's home loan repayment calculator (click to run the numbers on your own mortgage)
Fixed rate loans are already starting to rise, so if you're keen to lock in a good rate ASAP, here are a few of the offers available right now:
Moral of the story? If a fixed rate home loan suits you, take steps to lock it in ASAP. Check out the latest fixed rate home loan offers now.
