Borrow
Avoiding the bite of rate rises means listening for the bark
Stop asking when rates will rise; start thinking about what to do about it.
Avoiding the bite of rate rises means listening for the bark
As Australia’s banks begin to hike their fixed home loan rates, their customers might want to start thinking about what that means for them.
WLTH head of lending Catherine Mapusua said that a shift away from thinking about when interest rates might rise and towards what living in a world with higher rates looks like was prudent.
“With improving economic conditions and banks scrambling to announce interest hikes, it is wise to start preparing for this shift in the interest rate environment,” she said.
Ms Mapusua recommended consumers consider whether a fixed rate suits their needs, as it can restrict additional repayments and leave them on the receiving end of a break fee if their circumstances change.
“If you change banks, sell the property, or need to break the rate of your repayments, you risk charges that can be from a couple of hundred to several thousand,” she said.
To avoid being caught out, Ms Mapusua said consumers should consider paying a lock fee.
“This can help secure your fixed rate on offer at the time of settlement, protecting you from rate increases before the loan is advanced,” she explained.
Those with a variable rate mortgage also might want to think about fixing part of their rate sooner rather than later.
“Given the speed at which rates rise and the challenge in predicting the climb, speak to your provider to guide you through a ‘stress test’ to determine what your future financial position looks like,” Ms Mapusua said.
Many of these concerns were echoed by RentBetter chairman Tony Breuer, who argued that all indications now suggest that the interest rate cycle is at a turning point.
“For those investors that have not already fixed rates, this will mean in the first instance a sharp reduction in free cash flow.,” he predicted.
With current interest rates as low as they are, Mr Breuer warned that even a small increase in rates would translate into a large one when it comes to the material costs involved.
“This will put pressure on the cash flow resources of many landlords and will focus their minds on maximising rental flows and reduction in costs, such as insurance, repairs and agent’s fees,” he said.
Mr Breuer also said that investors should consider what a rate rise means for property prices, noting that the relationship between the two has often been an inverted one.
“There is not much you can do about this other than sell the property if you have the conviction to do so,” he said.
Speaking to nestegg earlier this year, WLTH cofounder Drew Haupt recommended first home buyers prepare for the inevitable by staying informed, educating themselves about how future rate rises might impact their budget and working around those possibilities.
“Rather than running for the hills when interest rates rise, it’s important that first home buyers do their due diligence and build confidence by staying informed, educating themselves about future rate rises, and creating a realistic budget,” he said.
RELATED ARTICLES
-
Australia’s credit pivot: Mortgage enquiries hit a three‑year peak as households lean on plastic — what lenders and fintechs must do next
-
Trust is the new yield: Why brokers win when credibility compounds
-
Mortgage Relief Window: How Australia’s Lenders Are Rewiring Risk and Growth at a Three‑Year Lull
About the author
About the author
Loans
Australia’s credit pivot: Mortgage enquiries hit a three‑year peak as households lean on plastic — what lenders and fintechs must do next
Australian home loan interest has rebounded even as households lean harder on cards and personal loans — a classic late‑cycle signal that demands sharper risk, pricing and AI executionRead more
Loans
Trust is the new yield: Why brokers win when credibility compounds
In a market where products look interchangeable, credibility has become the most defensible asset in mortgage broking. With broker channel share hitting record highs and AI reshaping client ...Read more
Loans
Mortgage Relief Window: How Australia’s Lenders Are Rewiring Risk and Growth at a Three‑Year Lull
Australia’s mortgage stress has eased to its lowest level since early 2023, creating a rare—likely brief—window for lenders, brokers and fintechs to reset risk and rebuild growth. This case study ...Read more
Loans
Why ANZ’s tougher stance on company-borrowed home loans matters: A case study in risk recalibration, competition, and what CFOs should do next
ANZ has tightened mortgage credit parameters for loans where a company or trust is the borrower—an apparently narrow policy tweak with wide operational consequences. It signals a broader recalibration ...Read more
Loans
Mortgage 2026: Australia’s share‑of‑wallet war will be won on switching, data rights and AI discipline
The defining feature of Australia’s 2026 mortgage market won’t be house prices; it will be switching velocity. With competition reforms sharpening the Consumer Data Right, lenders and brokers that ...Read more
Loans
Mortgage remorse reshapes the game: Australia's lending squeeze set to redefine banking and household demand
A growing cohort of Australians is rethinking recent home loan decisions as higher repayments collide with household budgets. This isn’t just consumer angst; it’s an economy-wide red flag for lenders, ...Read more
Loans
Aussie mortgage game-changer: Brokers dominate while AI sharpens the edge
Mortgage brokers now originate roughly three in four new Australian home loans, a structural shift that rewires bank economics, product strategy and customer acquisition. MFAA data shows broker market ...Read more
Loans
Fixing the future: How brokers and lenders can turn rate-hike anxiety into strategic advantage
Australian borrowers are leaning into short-term fixed loans as rate uncertainty lingers, shifting risk from households to lenders and their funding partners. That creates a narrow window for broker ...Read more
Loans
Australia’s credit pivot: Mortgage enquiries hit a three‑year peak as households lean on plastic — what lenders and fintechs must do next
Australian home loan interest has rebounded even as households lean harder on cards and personal loans — a classic late‑cycle signal that demands sharper risk, pricing and AI executionRead more
Loans
Trust is the new yield: Why brokers win when credibility compounds
In a market where products look interchangeable, credibility has become the most defensible asset in mortgage broking. With broker channel share hitting record highs and AI reshaping client ...Read more
Loans
Mortgage Relief Window: How Australia’s Lenders Are Rewiring Risk and Growth at a Three‑Year Lull
Australia’s mortgage stress has eased to its lowest level since early 2023, creating a rare—likely brief—window for lenders, brokers and fintechs to reset risk and rebuild growth. This case study ...Read more
Loans
Why ANZ’s tougher stance on company-borrowed home loans matters: A case study in risk recalibration, competition, and what CFOs should do next
ANZ has tightened mortgage credit parameters for loans where a company or trust is the borrower—an apparently narrow policy tweak with wide operational consequences. It signals a broader recalibration ...Read more
Loans
Mortgage 2026: Australia’s share‑of‑wallet war will be won on switching, data rights and AI discipline
The defining feature of Australia’s 2026 mortgage market won’t be house prices; it will be switching velocity. With competition reforms sharpening the Consumer Data Right, lenders and brokers that ...Read more
Loans
Mortgage remorse reshapes the game: Australia's lending squeeze set to redefine banking and household demand
A growing cohort of Australians is rethinking recent home loan decisions as higher repayments collide with household budgets. This isn’t just consumer angst; it’s an economy-wide red flag for lenders, ...Read more
Loans
Aussie mortgage game-changer: Brokers dominate while AI sharpens the edge
Mortgage brokers now originate roughly three in four new Australian home loans, a structural shift that rewires bank economics, product strategy and customer acquisition. MFAA data shows broker market ...Read more
Loans
Fixing the future: How brokers and lenders can turn rate-hike anxiety into strategic advantage
Australian borrowers are leaning into short-term fixed loans as rate uncertainty lingers, shifting risk from households to lenders and their funding partners. That creates a narrow window for broker ...Read more
