While the Reserve Bank of Australia became the enemy of many borrowers early last year, hitting mortgage holders with a number of consecutive rate rises before taking a short breather, only to then slug us again in November, the true boogeyman in the closet was the banks.
Just before Christmas they decided to get into the spirit – of bumping up profits that is – and make a move on their own retail rates independent of the RBA. Mind you, while this rather unwelcome gift was widely publicised and just as widely vilified, the fact that it was the icing on an overall 1% increase on top of any official rate rises that the banks slyly snuck in over the course of the previous 24 months went largely unmentioned.
READ POSTThe government and Wayne Swan in particular, have loved playing hero for the Aussie home owner by attacking lenders and allegedly tightening the reins on their credit policies. Sweeping in like a white knight on his trusty regulatory steed, the federal treasurer believes his recent moves to abolish exit fees on new home loans will increase competition in the sector and give borrowers a better deal.
READ POSTTraditionally speaking, it has long been held that home owners will fare better over the life of their mortgage if they elect to stick with a variable rate package rather than go for a fixed option. While fixing might protect you from rate hikes in the short term, many experts suggest that you’re more likely to win out and pay less interest by the end of your loan if you go with a variable product and ride the ups and downs of rate movements.
READ POSTWith most economists predicting inflationary pressures to continue into 2011 and 2012 – largely due to China’s obsession with our local resources – many are forecasting at least two more rate rises from the Reserve Bank this year and some are even suggesting an increase of 1% by the beginning of 2012.
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