With many banks and other mortgage lenders passing on the recent cash rate hike from the Reserve Bank of Australia (RBA), many mortgage holders may soon start feeling the pinch in their budget. And with more rate hikes expected to come in the future, it may be worth comparing alternative home loan options to get a better idea of which choice could offer more value.
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Some of the best refinance home loans
Many of Australia’s mortgage lenders announced they would be passing on the RBA’s cash rate hike by raising variable interest rates, some within 24 hours of the RBA board’s meeting. As these rate hikes begin to take effect, some home owners may already be considering alternative mortgage options.
While further rate hikes are expected in the future, with the RBA itself forecasting that the cash rate could rise as high as 2.5 per cent, there are currently still several lenders offering interest rates of less than 2 per cent, for borrowers with enough equity in their property to fulfil the eligibility criteria:
Some of the best investor variable rate home loans
Property investors on variable interest rates could also start to see their budgets being affected by the recent cash rate hike. Switching to an alternative lender could also be an option to consider, though it’s important to also consider factors beyond the interest rate, such as value-adding cashback deals.
Some of the best investor 5-year fixed interest-only loans
Investors who are concerned about rising interest rates may be curious about locking in their interest charges for up to five years. While lenders have been raising fixed rates in the lead up to the RBA meeting, while at the same time slashing variable rates, switching to interest-only repayments could help to keep the cost of your investment consistent for a limited time.
Just keep in mind that you won’t be able to refinance this mortgage without paying break fees, and because you aren’t lowering the principal, you could end up paying more total interest on the property over the long term.