Will Interest Rates Go Up Again In Australia?

The Reserve Bank of Australia says that the conditions in 2023 are not in the favor of the increment in most of the interest rates. Well! The market is expecting a good move in the next year.

Governor Philip Lowe said in a speech to the CPA Australia Riverina Forum in Wagga Wagga on Thursday the central bank was considering three options for its stimulus program of bond-buying, with the third option being to completely end it in February. We can either further taper the purchases from the current rate of $4 billion a week and end them in May, or we can taper further and re-evaluate the situation then.

All three options will be considered at the board’s next meeting in February assuming no further economic downturn. In light of rising inflation rates and improving labor market conditions, the US Federal Reserve announced overnight it would taper its asset purchases, buying $US60 billion worth of bonds in January, down from $US90 billion this month. Hence, the interest rates in Australia will be hiked from the historic low of 0.1 percent in 2022.

How It Hit The Bank And People

Well! Because of the guidelines given by the RBA (Reserve Bank Of Australia), numerous banks brought some changes in their interest rates. Some of these bank interest rates along with their previous rates are listed as follows with help of which you can compare mortgage interest rates –

BankProductChangeNew RateComparison Rate
Horizon BankFixed-Rate Home Loan 3 Years30 bps2.89% p.a.2.89% p.a.
Great Southern BankFixed IO 3 Years25 bps3.24% p.a.3.99% p.a.
Credit Union SAFixed Home Loan Package P&I 3 yrs Special Offer25 bps2.59% p.a.3.53% p.a.
ME BankFlexible Fixed OO 3 yrs P&I15 bps2.69% p.a.3.07% p.a.(≤80%LVR)
GateWay BankResidential 3 Years60 bps2.99% p.a.4.11% p.a.

On the other hand, the Commonwealth Bank’s fixed rates for owner-occupiers were raised by up to 0.25 percent, and fixed rates for investors were raised by up to 0.20 percent.

Would It Affect People

The increment in the interest rates in Australia has been increased to a greater level. Well! It was a much necessary step for the Reserve Bank Of Australia to announce a hike in current interest rates in Australia. Due to the covid pandemic, everyone was expecting a slight dump in the market.

To cope up with that dump, it was very necessary for the RBA to bring variable interest rates. But this step can hit hard to some of the people who are going to take the loan either for theory personal needs, home needs, refurbishment at home, etc. This sudden hike in the interest rates can affect your treasure adversely.