What NAB’s fixed rate raise means for home loans in 2022

by Mike Wood20 Sep 2021

Last week, NAB sent the biggest signal yet that the RBA might well hold course on their commitment to keeping the cash rate low, hiking their three-, four- and five-year fixed rates.

The rate rises show a new found confidence that the Big Four banks have in the RBA, especially given their quite public deviations from the central bank on policy in recent months.

CBA had publicly floated the idea that rates would rise in 2022, and raised their variable rates commensurately, a move that rippled through the industry.

That was before the recent extended lockdowns in New South Wales and Victoria, which seem to have reset thinking and moved it back into line with expectations of the RBA.

Big Four banks are still largely clinging onto their sub-2% 2-year variable rates but, with the majority of the market now going towards refinancing and locking in low rates, it was inevitable that fixed would rise.

“With increasing vaccination rates, and lockdown restrictions easing, RBA is holding course and believes the economy will bounce back, albeit at a delayed schedule,” said Jay Ahluwalia, senior mortgage broker at TrueSavings.

“Both lenders and the RBA seem to agree that the cost of funding will need to go up as we approach 2024. As we see fixed term interest rates move upwards, there needs to be education around its implications for the client.”

“Fixed terms can offer certainty of payments when they’re suitable for the client, but what may have been the right loan a year ago could now be costing you extra when compared to the market.”

“So as the savings equation is shifting with rising interest rates, we’re reaching out to clients to review their home loans to help ensure that the loan they have is still meeting their needs and goals.”

“As trusted experts, the education, review, and consistent attention to service are what’s going to drive true savings for the Australian borrower.”

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