Rate rises continue to drive market movements
RateCity has released its weekly interest rate movements wrap-up, which showed another week of rate hikes.
More than 350 different hikes to fixed rates across all loan terms were seen last week, showing that hikes continued to drive market movements, according to Sally Tindall (pictured), RateCity.com.au’s research director.
“Some of the activity has been focused on specific LVR tiers,” said Tindall. “Bendigo Bank, for example, hiked its basic variable rate by 0.20 percentage points for borrowers with big deposits, but also cut its packaged rate for variable borrowers with smaller deposits by 10 basis points.”
The following table indicates the major moves seen in the previous week:
Tindall said that there was no movement from any of the big banks but since the cash rate was put on hold until February, there may be some subtle changes seen in the upcoming months.
The figure below depicts last week’s rate changes in terms of cuts and hikes:
A decline in fixed rates and refinancing
The latest data from the Australian Bureau of Statistics (ABS) lending indicator showed that the popularity of fixed rates has significantly declined, dropping to 2.3% of all new and refinanced loans in October.
Refinancing also saw a decline, dropping by $4.2 billion since it peaked in July.
“This comes on the back of an exodus from the cashback game from lenders, with the RateCity.com.au database showing 61% of lenders offering a cashback in March have now withdrawn their offers,” said Tindall.
More than 671,000 mortgages have been refinanced since the hikes began according to the ABS lending indicator’s data.
“While this is a huge number of loans switching lenders, there are millions more mortgages that have stuck with their lender throughout this time,” said Tindall.