Mozo urges borrower caution after new RBA rate rise
Article by Mozo
Finance comparison website mozo.com.au has advised borrowers to keep a close eye on the interest rate activity of the ‘Big Four’ banks after the Reserve Bank (RBA) put the official cash rate up by a further 0.25 per cent.
The RBA’s hike of 25 basis points today (April 6th), which brings the official cash rate to 4.25 per cent, has been the bank’s consistent response to Australia’s rapidly growing economy.
With rates now tipped to reach at least five per cent by Christmas, RBA governor Glenn Stevens recently made an unprecedented appearance on Channel Seven’s Sunrise to warn Australians against making highly-geared property investments, noting that interest rates will continue to rise for the foreseeable future.
Meanwhile, Mozo has advised borrowers to compare home loans across the Big Four banks by using its Naughty or Nice table, particularly as Westpac and Commonwealth have warned that higher funding costs may prompt them to raise rates above future RBA increases.
Commonwealth, ANZ and Westpac have all matched the latest RBA rise by lifting their standard variable rates on mortgages by 25 basis points.
However, Mozo noted that only NAB, the smallest home loans player among the Big Four, made a point of promising customers it would not raise interest rates above the official increase prior to the RBA announcement.
"It’s a clever move, since the bank’s consistently lower mortgage rates has made it extremely attractive amongst borrowers and we certainly applaud its efforts to keep the others in check. After all, a jump in interest rates by 0.25 per cent will see monthly repayments on an average $300,000 home loan rise by $50," it said.
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