Has your bank hiked home loan rates yet? When will mortgage repayments rise

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

The cash rate has now been hiked 1.25 percentage points since May 2022, with the latest increase in July another double hike of 0.50%. The cash rate now sits at 1.35%, with experts from the big four banks now predicting it could sit around 2-3% by Christmas.

Some of the biggest names in home loans and competitive lower-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

At the time of writing, 22 lenders have announced home loan rate changes. These lenders have all agreed to pass on the full cash rate hike for July of 50 basis points to their variable home loan products.

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

• If your bank is not on the list above, then it has likely not yet made an announcement. To get notified when your lender hikes rates, please visit RateCity’s Rate Tracker page.

When will interest rates stop rising?

These cash rate hikes are only the beginning, with economists and experts predicting more interest rate increases by December 2022. The latest big four bank predictions 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
• NAB – 2.00-2.35% cash rate by December 2022

Over a 25–30-year home loan term it’s expected that your interest rate will fluctuate. Experts recommend factoring in at least a 2-3% interest rate hike buffer when you apply for your mortgage to ensure you know you can comfortably service the loan. And lenders also follow this rule, testing your income when you apply on a higher interest rate as they expect rates to rise while you repay a mortgage.

It's also fair to expect that the cash rate will fall again over the life of your home loan. All of these factors are risks those homeowners take on board when applying for a mortgage.

But that doesn’t mean the sting of higher interest rates amidst high inflation and cost-of-living pressures is any easier. In fact, with the Reserve Bank stating that inflation is due to supply issues and global conflict, Australians may be confused why their mortgage repayments are going up at all.

For homeowners currently on variable rate loans, these hikes should impact your mortgage repayments generally by your next monthly bill. If you’re currently on a fixed rate home loan, keep in mind that when this period ends you will be entering into a potentially higher rate market.

Whichever position you are in, if the cost of higher mortgage repayments is adding financial stress to your household, it’s worth looking at your options. Consider speaking to your lender and requesting a lower interest rate, especially as they typically offer lower rates to new customers. You may even want to request hardship assistance if you’re really struggling.

Otherwise, one option homeowners have to consider is giving themselves a rate cut by refinancing to a lower-rate lender. Not every homeowner is in a suitable position to refinance so do your research first, but if you are, you may be able to switch to a lower interest rate and reduce your mortgage repayments by the next cash rate hike.

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