Rate rise coming, despite election delay

By |
The spectre of a looming Federal Election could bring some relief for Australian borrowers, with it predicted that lenders will wait until after the Australia has gone to the polls before announcing the next round of interest rate rises.

According to a report by Your Investment Property Magazine’s sister publication Australian Broker, analysts at wealth management firm Morgan Stanley this week predicted in a research note to clients that there is a “high probability” that lenders will increase rates for borrowers following the election in the wake of cost pressures.

Banks are likely to delay the rate hikes until after the election so as to avoid the ire of a government campaigning for re-election.

“Despite the near-term pressures, we expect the timing of future re-pricing initiatives for the major banks to be delayed until after the federal election,” the research note.

Speaking to Australian Broker, Otto Dargan, managing director of specialist mortgage broker firm Home Loan Experts, told Australian Broker that while lenders may hold off on rate rises for the time being, any increases are justified.

“There's definitely increased cost pressures, particularly due to increased compliance costs and higher capital requirements,” Dargan told Australian Broker.

“So while we never like to see rates go up, it is justified,” Dargan said.

Whether the increase is justified or not, the delay in any rate rise is likely to be welcomed by borrowers as it they given some time before they need to worry about the next change in a lending market that has been described as a minefield.

“Home owners have to tip toe through a mortgage minefield at the moment and it's only expected to get even more confusing. Interest rates are being raised independently of the RBA's deliberations while we also have a range of home loan products with some of the biggest price differentiations in memory,” John Kolenda, head of mortgage broking network 1300HomeLoan, said earlier this week.

Confused mortgage holders must be struggling to keep on top of all the changes. But they also can't afford to adopt a set and forget mentality with their home loan as it could cost them thousands of dollars,” Kolenda said

Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker

Top Suburbs : geelong west , eagle vale , alderley , newtown , millner

go back

Get help financing your investment

Do you need help finding the right loan for your investment?

When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.

Just fill in a few details below and we'll then arrange for a local expert Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus, our mortgage broking service is at no cost to you.

How soon would you like a mortgage?
What is your Annual Household Income i $
Do you currently own any Investment Properties?
Do you own your own residence?
How much equity do you have in all your current properties?
First Name
Last Name
Where do you live?
What number can we reach you on?
E-mail address
We value your privacy and treat all your information seriously - you can check out our privacy policy here