While many commentators have predicted the Reserve Bank could reduce the official cash rate before the end of the year, one mortgage industry figure believes it will have little relief for anybody with a home loan. 

A reduction of the cash rate on Melbourne Cup day has been predicted for months, and 1300HomeLoan managing director John Kolenda believes it’s likely the RBA will make a move in November.

“The RBA has some history in playing a part on Melbourne Cup day and we may see the central bank cut rates once more on the first Tuesday in November or before the end of the year,” he said.

While Kolenda is predicting the RBA will lower the cash rate, he doesn't believe lenders will pass the reduction on to consumers. Instead, Kolenda says it’s more likely banks will raise the interest rates on home loans as they respond to changing capital requirements

Kolenda predicts home loan interest rates could rise by up to 0.5%

“The decision of many lenders to raise interest rates for investment and interest only loans as well as revised borrowing conditions has already had an impact on many borrowers," he said

“We are likely to see increases from 25 to 50 basis points in out of cycle movements by many banks as they adjust their pricing to accommodate additional costs. They face a balancing act between managing home loan growth and shareholder returns.”

Unlike other rate rises seen in recent months, which have targeted investment and interest-only loans, owner occupier loans would also likely be affected, Kolenda claimed.

“Over the next six to nine months we may see increases in rates across the board with the pressure on the major banks to meet APRA measures by June next year," Kolenda said.

"This will likely see rates increase for owner-occupied in the future.” 

Kolenda's prediction backs the position of UBS banking analyst Jonathan Mott who also believes rates are on their way up, regardless of RBA moves