RBA’s low cash rate lulls borrowers into a “false sense of security”

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Although the RBA has announced that it will keep the spot rate at 0.10% and not increase until 2024, new research reveals that interest rates are starting to climb.

Aussie’s results – which is part of the Lendi Group – found that despite the cash rate remaining at 0.10% since November 2020, more than 1,000 mortgage rate changes have gone into effect.

There has recently been a surge in lenders raising their fixed rates, according to Aussie research.

It comes after recent findings revealed a “worrying” complacency among Australian mortgage holders to refinance, with 62% aware of its benefits but 54% having never refinanced before.

According to David Hyman, CEO of Lendi Group, remaining complacent, millions of people will likely lose their chance to “extend” their mortgage before interest rates rise again.

“It appears that a majority of Australian mortgage holders have acquired a false sense of security whenever the RBA’s cash rate is held steady – not realizing that lenders have no obligation to stay there. comply when they set their rates, ”Hyman said.

“The whole talk is that the cash rate doesn’t go up for a while, but the reality is that the stability of the cash rate doesn’t stop lenders from raising interest rates.”

Refinancing hits record high but concerns prevail

Although the Australian Bureau of Statistics (ABS) recently revealed that refinancing reached an all-time high of $ 17.2 billion, Mr Hyman said that only represented 7% of home loans refinanced over the course of the year. past year.

“This lack of action could cost Australians dearly across the board, when they finally realize that the low rates they once ignored are no longer on offer,” he said.

Mr Hyman said history has shown that interest rates don’t stay low forever and mortgage holders should prepare for them before they find out they have “missed the moment.”

“A home loan is not a short-term commitment – it’s a long-term investment,” Hyman said.

“If you are unsure of the process or the lack of time, speak to an expert who can compare your current rate to what is on offer, and ultimately help you secure your mortgage by capitalizing on favorable market rates at. the current time.”


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Image by Bruno Nascimento

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