Has your bank ever raised mortgage rates? When will mortgage payments increase

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The Reserve Bank of Australia has raised the cash rate for the third month in a row, and homeowners already juggling higher repayments should keep abreast of when their lender raises rates again.

The cash rate has now been raised by 1.25 percentage points since May 2022, with the last increase in July having risen a further 0.50%. The cash rate now sits at 1.35%, with experts at the big four banks now predicting it could be around 2-3% by Christmas.

Some of the biggest names in home loans and competitive low-rate lenders have already announced rate hikes as early as this week. So, is your lender on the list?

Banks that have announced interest rate hikes from July

As of this writing, 22 lenders have announced home loan rate changes. These lenders have all agreed to pass on the entirety of July’s cash rate hike of 50 basis points to their variable mortgage products.

Lender

Rate hike

Effective date

Commonwealth Bank of Australia

0.50

7/15/22

Westpac

0.50

7/20/22

ANZ

0.50

7/15/22

NAB

0.50

7/15/22

MyState Bank

0.50

07/18/22

Macquarie Bank

0.50

7/14/22

Bankwest

0.50

7/15/22

Suncorp Bank

0.50

7/15/22

loans.com.au

0.50

07/08/22

Horizon Bank

0.50

07/07/22

Bank first

0.50

7/22/22

first mac

0.50

07/08/22

Bank ME

0.50

07/09/22

Bank of Queensland

0.50

07/08/22

blank silver

0.50

07/09/22

ING

0.50

12/07/22

St. George’s Bank

0.50

7/20/22

Bank of Melbourne

0.50

7/20/22

Bank SA

0.50

7/20/22

Newcastle Permanent Building Society

0.50

7/15/22

Bank Australia

0.50

07/18/22

Bendigo and Adelaide Bank

0.50

7/15/22

Source: RateCity.com.au. Data accurate as of 07/08/2022.

  • If your bank is not listed above, it probably hasn’t made an announcement yet. To be notified when your lender increases their rates, please visit the RateCity Rate Tracker page.

When will interest rates stop rising?

These interest rate hikes are just the start, with economists and pundits predicting further interest rate hikes by December 2022. The latest forecasts from the big four banks show:

  • CommBank – 2.10% cash rate by December 2022
  • Westpac – 2.35% cash rate by February 2023
  • ANZ-2.00-3.00% cash rate by December 2022
  • NA – 2.00-2.35% cash rate by December 2022

Over a mortgage term of 25 to 30 years, your interest rate is expected to fluctuate. Experts recommend factoring in at least a 2-3% interest rate hike buffer when applying for your mortgage to ensure you can comfortably repay the loan. And lenders follow this rule too, testing your income when you charge a higher interest rate, because they expect rates to rise while you pay off a mortgage.

It’s also fair to expect the cash rate to drop again over the life of your home loan. All of these factors are risks that homeowners consider when applying for a mortgage.

But that doesn’t mean the sting of higher interest rates amid high inflation and cost-of-living pressures is any easier. In fact, with the Reserve Bank saying inflation is due to supply issues and global conflict, Australians may not understand why their mortgage payments are rising.

For homeowners currently on variable rate loans, these hikes should impact your mortgage payments typically on your next monthly bill. If you are currently on a fixed rate home loan, keep in mind that at the end of this period you will enter a potentially higher rate market.

No matter what position you find yourself in, if the cost of higher mortgage repayments is adding financial stress to your household, it’s worth considering your options. Consider talking to your lender and asking for a lower interest rate, especially since they usually offer lower rates to new customers. You can even ask for hardship help if you are really struggling.

Otherwise, one option homeowners should consider is to give themselves a rate reduction by refinancing with a lower rate lender. Not all homeowners are in a suitable position to refinance, so do your research first, but if you are, you may be able to move to a lower interest rate and lower your mortgage payments by now. the next rise in cash rates.

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