What is the market predicting for rates in 2022?
Last week, NAB sent the biggest signal yet that the Reserve Bank may well hold course on their commitment to keeping the cash rate low, increasing their 3, 4 and 5-year home loan rates.
The rate rises show a newfound 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 has publicly voiced their opinions 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 those customers with existing home loans now 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.
Several 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 clients.
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 are asking and reaching out to clients to review their home loans to help ensure that the loan they have is still meeting their needs and goals.
It is a great time to reach out to us so that we can review your current needs as well as any future needs. It is important to have some consistency and attention to your loans so that we can assist you in securing true savings. Contact me today to review your home loan.