Even though the Reserve Bank of Australia (RBA) kept the nation’s cash rate on hold this month, that hasn’t stopped banks and other lenders from quietly adjusting their own interest rates out of cycle, in anticipation of a cash rate hike that may be coming sooner than the current 2024 forecast.
Banks anticipate cash rate rise
With some major banks raising fixed rates frequently – twice in three weeks, in some cases – if you’re in the process of applying for a fixed rate home loan, it may be worth considering paying a rate lock fee. This effectively sets your fixed rate in stone at the start of your application, so you won’t be affected if your lender bumps up its rates during the approval and settlement process.
Some banks have also been cutting interest rates on variable rate home loans and adding cashback incentives to help attract new customers. These deals may be tempting, though it’s important to compare your options, consider which choices may best fit your financial situation, and to keep in mind that if the RBA is pressured to increase the national cash rate sooner rather than later, your repayments could increase to more than you could easily afford.
With this in mind, regulators are requiring lenders to raise the floor rate used to assess home loan applications – in other words, you may not be able to borrow quite as much as you could previously, as that may have put you at higher risk of ending up in financial stress.
Aussies buying cars as lockdowns lift
As COVID-19 restrictions ease around Australia and travel becomes a more valid option, more Australians are understood to be purchasing new vehicles than in the year before. If you’re planning to invest in some new wheels to get out to the regions or make an interstate road trip, it’s important to consider your choice of car finance.
And with some states introducing legislation to help encourage the uptake of electric vehicles (EVs), a green car loan could be a valid car finance option to consider.
Shop ‘til you drop
While international shipping is still in a bit of a quagmire thanks to delivery backlogs and supply chain issues around the world, it’s becoming easier to once again go out shopping in person. Remember what that was like? Trying things on before buying? Browsing? Window shopping?
If your bank balance could use some support for a post-lockdown splurge, there are options to consider, such as Buy Now Pay Later services and 0% interest credit cards, both of which the big banks are increasingly getting into.
Traditional credit cards may also be an option to consider in some cases, as they may offer extra benefits such as reward points and travel insurance, which could be handy when venturing interstate or overseas now that borders are beginning to open up.