Invest
‘If you’re a borrower, it will hurt’
The cash rate is unlikely to move in any significant way but Aussie homeowners could still be stung in another fashion, an investment firm has warned.
‘If you’re a borrower, it will hurt’
The cash rate is unlikely to move in any significant way but Aussie homeowners could still be stung in another fashion, an investment firm has warned.
FIIG Securities director of education and research Liz Moran told Nest Egg she doesn’t see the official cash rate moving any time soon, but mortgage-holders could still be hit with a proxy rate hike.
She explained that despite the cash rate not moving since August 2016, the bank bill swap rate (BBSW) has spiked recently. The BBSW is essentially the rate at which banks borrow and lend between each other. It recently spiked to 1.6 per cent over the cash rate from where it usually hovered around 0.25 per cent over the cash rate.
“That, in essence, will feed through to variable rate loans and new fixed rate housing loans. So you're almost getting a cash rate hike from the banks through that increase in the bank bill swap rate,” Ms Moran said.
“That's happened because we're seeing the US increase short-term rates. All the major banks here are big borrowers of US dollars, so it's costing them more so they're charging each other more to lend and borrow.”
This in turn means Aussie borrowers will suffer the impact of higher rates, even if a Reserve Bank-led hike doesn’t transpire.
“If you're a borrower, it will hurt,” she told Nest Egg at the FIIG high yield conference.
Ms Moran said term deposit rates will also “hopefully move up” as banks seek out the cheapest markets.
“If the term deposit market in Australia then becomes the cheapest market, they'll try and borrow more from that market, and they might put the rates up,” she said.
“We've seen some evidence of that already through our [term deposit brokerage] business. Some of the smaller credit unions and the smaller banks certainly are going to be hurt by that, with the bigger top four coming out with higher rates.”
RELATED ARTICLES
Property
From intuition to instrumentation: How a "two-stakeholder" sales playbook lifted close rates and cut cycle times
High-stakes consumer purchases are increasingly joint decisions. When one partner is under-served, deals stall. This case study follows an Australian real estate group that rebuilt its sales motion ...Read more
Property
Selling in 2025: How to spot bad agents fast—and build an ROI-first vendor playbook
In Australia’s property market, choosing the wrong listing agent isn’t just inconvenient—it’s a textbook principal–agent failure that can wipe tens of thousands off your sale outcomeRead more
Property
Selling in 2026: How to de‑risk your agent choice and protect tens of thousands at settlement
Choosing the wrong selling agent isn’t just an inconvenience — it’s a balance‑sheet risk. In a market where digital discovery is concentrated and AI is recasting how listings are priced and promoted, ...Read more
Property
Rate resilience in Australian housing: why scarce supply is overpowering monetary tightening
Australia’s housing market is defying higher borrowing costs because the binding constraint isn’t demand—it’s supply. Brokers report persistent buyer competition and investor repositioning, while ...Read more
Property
Victoria’s $100m renter support push: what it means for landlords, proptech and the housing economy
Victoria has unveiled a new suite of rental support services, including a dedicated helpline for renters aged 55+, underpinned by a funding package widely reported at around $100 millionRead more
Property
The multigenerational home moves mainstream: where the next margin lives in Australian real estate
Multigenerational living is shifting from edge case to core demand driver in Australia’s housing market. For agents, developers and lenders, the commercial upside lies in rethinking product design, ...Read more
Property
Multigenerational living is moving mainstream: how agents, developers and lenders can monetise the shift
Australia’s quiet housing revolution is no longer a niche lifestyle choice; it’s a structural shift in demand that will reward property businesses prepared to redesign product, pricing and ...Read more
Property
Prestige property, precision choice: a case study in selecting the right agent when millions are at stake
In Australia’s top-tier housing market, the wrong agent choice can quietly erase six figures from a sale. Privacy protocols, discreet buyer networks and data-savvy marketing have become the new ...Read more
Property
From intuition to instrumentation: How a "two-stakeholder" sales playbook lifted close rates and cut cycle times
High-stakes consumer purchases are increasingly joint decisions. When one partner is under-served, deals stall. This case study follows an Australian real estate group that rebuilt its sales motion ...Read more
Property
Selling in 2025: How to spot bad agents fast—and build an ROI-first vendor playbook
In Australia’s property market, choosing the wrong listing agent isn’t just inconvenient—it’s a textbook principal–agent failure that can wipe tens of thousands off your sale outcomeRead more
Property
Selling in 2026: How to de‑risk your agent choice and protect tens of thousands at settlement
Choosing the wrong selling agent isn’t just an inconvenience — it’s a balance‑sheet risk. In a market where digital discovery is concentrated and AI is recasting how listings are priced and promoted, ...Read more
Property
Rate resilience in Australian housing: why scarce supply is overpowering monetary tightening
Australia’s housing market is defying higher borrowing costs because the binding constraint isn’t demand—it’s supply. Brokers report persistent buyer competition and investor repositioning, while ...Read more
Property
Victoria’s $100m renter support push: what it means for landlords, proptech and the housing economy
Victoria has unveiled a new suite of rental support services, including a dedicated helpline for renters aged 55+, underpinned by a funding package widely reported at around $100 millionRead more
Property
The multigenerational home moves mainstream: where the next margin lives in Australian real estate
Multigenerational living is shifting from edge case to core demand driver in Australia’s housing market. For agents, developers and lenders, the commercial upside lies in rethinking product design, ...Read more
Property
Multigenerational living is moving mainstream: how agents, developers and lenders can monetise the shift
Australia’s quiet housing revolution is no longer a niche lifestyle choice; it’s a structural shift in demand that will reward property businesses prepared to redesign product, pricing and ...Read more
Property
Prestige property, precision choice: a case study in selecting the right agent when millions are at stake
In Australia’s top-tier housing market, the wrong agent choice can quietly erase six figures from a sale. Privacy protocols, discreet buyer networks and data-savvy marketing have become the new ...Read more
