Time to factor in higher interest rates

By Stacey Moseley 30 November 1999 | 1 minute read

Home buyers should expect borrowing costs to rise at some point very soon, the Reserve Bank of Australia (RBA)indicated this week.


In the minutes of its most recent monetary policy board meeting, released on Tuesday, the RBA said interest rates would need to rise at “some point” if economic conditions evolved as expected.

The RBA also revealed that there was a strong case for a rise in the cash rate in October but members decided to hold off.

“Global economic growth remained around trend, but with significant differences across regions,” the minutes read.


“In the North Atlantic economies, growth remained subdued, while growth prospects for Asia remain solid.”

“As such, the Board concluded that it would be appropriate to hold the cash rate steady for the time being, pending evaluation of further information at the next meeting.”

With this in mind, first home buyers should be preparing for higher home loan rates, Troy Phillips, director of brokerage FirstPoint, has urged.

“Anyone with a home loan should be aware that the RBA has sent the clearest indication yet that an interest rate rise is likely to occur sooner rather than later,” he says.

According to Mr Phillips, borrowers need to take rising interest rates into their borrowing plans.

“Borrowers need to be asking, what is my strategy? Do I have one? How will a rate rise affect me now and over the next 18 months? These are all valid concerns.”

If you’re thinking about entering the property market, it’s crucial to keep in mind that the interest rate on your home loan is bound to rise, unless you take out a fixed rate.

If you need help factoring in higher borrowing costs it might be worth speaking to a mortgage broker. They will be able to help you assess your loan servicing capabilities and explore different scenarios, to ensure you’ll be able to manage your mortgage, as your repayments increase.



Interest is the amount of money charged by a lender or financial institution for a loan, which is calculated as the percentage of the principal amount paid over the loan term.

Time to factor in higher interest rates
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