Lenders tipped to break with cash rate
6 May 2014| Mortgage Business
The Reserve Bank is not expected to change the official cash rate today, but home loan rates may continue to move.
Despite a steady outlook for most of 2014, several variable rate home loans have moved out of cycle this year, Finder.com.au money expert Michelle Hutchinson said.
“Our monthly survey of leading experts suggests that it will be at least four months before we will see any movement to the cash rate by the Reserve Bank,” Ms Hutchinson said.
“However, that doesn’t mean your variable home loan rate won’t change,” she added.
“We found that five lenders increased their rates on seven home loans by up to 0.10 percentage points this year, including Citibank, Homeloans, HSBC, Loans.com.au and Westpac (which saw a promotional offer end).”
Ms Hutchinson said that comparison website Finder.com.au has also seen seven lenders drop 20 home loans this year by as much as 0.17 percentage points.
“It’s even more unusual to see variable home loans rise out of cycle because most lenders haven’t passed on the full rate cuts of the past two years, which could be an indicator that the cash rate may rise next week or if not, later this year,” she said.
According to the Finder.com.au Monthly Reserve Bank Survey of 12 of Australia’s leading economists and money experts, all unanomously expect the official cash rate to remain unchanged today.
Almost half of those surveyed (five out of 12) are betting on a rate rise by the end of this year, including experts from the Commonwealth Bank and National Australia Bank, HSBC, St George Bank and AMP.
A further three experts from ANZ, Bank of Sydney and RAMS are predicting the next rate change will be in 2015, while four experts were unsure of the next rate move.