More home loan rate hikes expected in 2017: RateCity report

More home loan rate hikes expected in 2017: RateCity report
More home loan rate hikes expected in 2017: RateCity report

Home loans rates began to rise towards the end of the December quarter, despite no change to the RBA cash rate according to RateCity. 

About two-thirds of lenders raised fixed rates while a smaller number of lenders lifted variable rates with more hikes set to follow in 2017, according to comparison website RateCity’s Rates of the Nation report.

Longer-term fixed rates are sitting higher than variable rates and rising by the biggest margins, which indicates that banks don’t expect low rates will last forever. 

"Previously, banks were betting on lower rates in the future but we saw those expectations change daily during the past quarter," according tot Peter Arnold, data insights director of RateCity.com.au.

Fixed rates under 4 percent fell by 15 percent over the quarter; that’s around 100 less sub-4 percent fixed rates on offer now compared to three months ago, the report says.

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More home loan rate hikes expected in 2017: RateCity report

Consumers responded quickly by shifting towards fixed rates.

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More home loan rate hikes expected in 2017: RateCity report

"Consumers should expect more rate rises... While there are still plenty of home loan rates under 4 per cent, those deals are less prevalent now. It’s unlikely that we’ll see rates return to the long term average of around 7 percent just yet, but competition at the low-rate end of the market is slowing," Arnold adds.

Fixed home loan rates - Under 4 percent getting harder

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More home loan rate hikes expected in 2017: RateCity report

 

Distribution of variable rates

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More home loan rate hikes expected in 2017: RateCity report

According to RateCity's website, below is a snapshot of some of the popular home loan products:

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 More home loan rate hikes expected in 2017: RateCity report 

 

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Home Loans

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