24 Jan 2022

Historically low rates have been a staple in the mortgage market for some time now – so long in fact that it seems like forever since we saw a rate that started with a “4” or a “5”. Maybe we have become a little complacent and it’s now time to plug back in. Here is how the market has opened so far and what those in the know are predicting for interest rates in 2022.

Isaac Newton once asserted that “what goes up, must come down”, but the reverse is also true when it comes to interest rates. Whilst many believed that we had seen them tumble to their lowest point with no clear indicators pointing to further drops, ANZ decided to kick off 2022 by cutting their variable rate by 20 basis points. Great news for ANZ customers!

This rate reduction means that ANZ now sits alongside Westpac as joint cheapest of the Big Four and is sending a clear message that they are open for business.

How can you use ANZ’s rate drop to your advantage?

If you are not an ANZ customer and your variable rate is no longer as sharp as theirs, it’s probably a good time to approach your lender for some additional interest rate discount to keep you on board. Your Blackburne Mortgage Broker can go back to your lender on your behalf and request some further discount based on retaining your business. When was the last time you took advantage of this service?  No better time than the present. It’s quick, easy and highly effective in shaving interest payments.

Many economists have predicted that the RBA will not be lifting rates until the first half of 2023, with some even citing 2024 as the year if the rate rise, but at lot can happen with financial markets in two years.

Westpac: “Rates will rise!”

Interestingly, Westpac has gone on the record announcing that their economists believe the official rates will be rising 0.15 basis points as early as August 2022 with a further 0.25 basis point rise likely before the end of the year. If this prediction is correct a mortgage holder with an average $500,000 loan balance will expect to pay an extra $103 per month.

These rate hikes may happen, or they may not but one thing is certain, it pays to be prepared. Now is the time to create a buffer for yourself to best shield yourself from rate rises. This can be done by:

Securing an additional interest rate discount from your lender

Refinancing to a cheaper rate

Locking in a low fixed rate

No one can definitively say what interest rates are likely to do in 2022, but one thing’s for sure it will pay to safeguard against paying too much down the line by reviewing now. Check in with your Blackburne Mortgage Broker to get on the front foot with your home loan to ensure 2022 is a great one for finances.



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