Broker and consumers should expect out-of-cycle rate hikes after the federal election dust settles, according to a mortgage industry veteran.
While it’s expected the Reserve Bank of Australia (RBA
) will again lower its cash rate, taking it below the current record low of 1.75% over the coming months, 1300HomeLoan managing director John Kolenda said the banks will also be looking to lift their home loan interest rates.
“The July 2 federal election has delayed moves by the banks to increase rates independently of the RBA,” Kolenda said.
“The banks want to lift rates in response to rising funding costs and the additional costs they face for the extra compliance and regulatory increase on reserves they will have to have in place by the end of June this year.”
Kolenda said the recent political attention, calling for a Royal Commission into Australia’s banking system, has stopped the banks from increasing rates until after the election.
He believes the banks will look to increase in the second half of the year once the election is out of the way.