13 remains an unlucky number for most, with the RBA choosing this week’s Melbourne Cup Day
13 remains an unlucky number for most, with the RBA choosing this week’s Melbourne Cup Day to level yet another rate rise, the 13th now since early 2022, a whopping 4.25% of cumulative increases and an end to the brief reprieve we had seen since the departure of Phillip Lowe as Governor.
We might still be a couple of months off 2024 but those famous words that we wouldn’t see rates rise til “at least 2024” continue to leave ringing ears and empty bank accounts as Australians on variable rate mortgages continue to see rising costs.
Unfortunately, there isn’t much we can do about an RBA decision. And banks are about as likely to leave their rates untouched as I was to win the Melbourne cup running barefoot and carrying the horse. Just because your bank sends you a letter and a “by the way, we are increasing your rate”, doesn’t mean that that’s the end of it though.
While rates are up across the board, there remains a big disparity between offers from one bank to another, particularly depending on your level of equity and overall financial position. Unfortunately those on high LVR (Loan to Value Ratios) mortgages will have less negotiating power but if you have 20% equity in your property or better (80% LVR) then you’ll likely find a lot more mobility between lenders and may have the option to either 1. Move banks or 2. Renegotiate your rate with your current bank.
Long gone are the days of swapping lenders a costly or particularly difficult exercise. Today, it can take as little as a phone call to get the ball rolling, and with cash-back incentives on offer in some cases you can find not only all costs covered for the move, but you might even end up with something extra in your pocked AND a lower rate. If you haven’t refinanced over the past 2 years and have just been riding the wave of rate rises, you might actually be pleasantly surprised by the outcome. Do make sure you check the terms and conditions though, and that whatever product you pick offers you the right fit for your circumstances – talk to an expert, as always.
Otherwise, given the next RBA meeting won’t occur until January, hopefully the board (and new Governor Michelle Bullock) receive some new tools for Christmas – they might then be less inclined to use the interest rate Hammer for every job…