Interest rate rise

RateCity StaffDec 8, 2009( 1 min read )

Home Loans

Cash rate=interest rate

Understanding finance speak is important when entering into a home loan. If you know the basic financial terms you can easily conduct your own research to make the best choices when it comes to your own financial situation. One such term that affects the entire Australian housing market is the cash rate.

Nov 7, 2016( 2 min read )

Home Loans

Why do banks change interest rates when the cash rate is steady?

Banks, credit unions, building societies and non-bank lenders often take their lead from the Reserve Bank of Australia when making decisions about interest rates.

Sep 21, 2017( 2 min read )

Home Loans

What is the Reserve Bank's official cash rate and why should I care?

The Reserve Bank of Australia’s official cash rate is the overnight money market interest rate that the RBA charges on overnight loans to commercial banks.

Dec 1, 2017( 2 min read )

Home Loans

Rate rises: how the banks could ruin Christmas

Since late November, around 34 lenders have increased their interest rates on approximately 500 fixed loan products. While the rate rises have started off small, ranging from 0.05 per cent to around 0.6 percent, a trend for increasing rates has been set in motion.

Dec 12, 2016( 5 min read )

When the Reserve Bank lifts the official cash rate, it is often referred to as an interest rate rise. This is because lenders generally follow the Reserve Bank’s cash rate movements so when the cash rate increases, most home loans will also experience an interest rate rise.

An interest rate rise will affect your home loan repayments if you have a variable mortgage but if you have a fixed rate, you will continue paying that rate until the fixed period ends. Then your mortgage will revert to your lender’s particular variable rate of whatever it happens to be at that time.

To compare a large range of competitive interest rate home loans visit our online comparison page and work out your finances with the home loan repayment calculator. For all the latest home loan related tips and information read our news articles and home loan guides.

RateCity Staff

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FAQs

Tip: You can use RateCity how much can I borrow calculator to get a quick answer.

How much money you can borrow for a home loan will depend on a number of factors including your employment status, your income (and your partner’s income if you are taking out a joint loan), the size of your deposit, your living expenses and any other debt you might hold, including credit cards.

A good place to start is to work out how much you can afford to make in monthly repayments, factoring in a buffer of at least 2 – 3 per cent to allow for interest rate rises along the way. You’ll also need to factor in additional costs that come with purchasing a property such as stamp duty, legal fees, building inspections, strata or council fees.

If you are planning on renting the property, you can factor in the expected rental income to help offset the mortgage, but again it’s prudent to add a significant buffer to allow for rental management fees, maintenance costs and short periods of no rental income when tenants move out. It’s also wise to factor in changes in personal circumstances – the typical home loan lasts for around 30 years and a lot can happen between now and then.

Interest rate rise

Related articles

Cash rate=interest rate

Why do banks change interest rates when the cash rate is steady?

What is the Reserve Bank's official cash rate and why should I care?

Rate rises: how the banks could ruin Christmas

Today's top home loans products

Discount Offer Variable Home Loan OO P&I ($200k+)

Home Value Home Loan (Principal and Interest)

Premium Package Home Loan (LVR < 80%)

Real Deal Variable Home Loan Special (Principal and Interest) (LVR < 90%)

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FAQs