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.”

Property
RBA’s 30% property growth forecast to materialise in 75% of regions
Experts believe that RBA’s forecasted 30 per cent growth in property prices over the next three years will materialise in 75 per cent of Aussie regions. ...Read more

Property
HomeBuilder applications soar as first-timers enter the market in record numbers
Record numbers of first home buyers are coming into the market assisted by the government’s HomeBuilder stimulus, which is expected to help spur $50 billion in economic activity. ...Read more

Property
Dual Occupancy Homes – Why They Are A Smart Investment In The Current Market
Promoted by Metricon ...Read more

Property
4 factors affecting property market trends in 2021
Following a tough 2020, property investment activity is expected to rebound strong, expanding by 50 per cent in the second half of 2021. ...Read more

Property
House prices tipped to surge 30% on the back of cheap money
According to new documents released from the Reserve Bank of Australia, persistently low interest rates could push up property prices by as much as 30 per cent. ...Read more

Property
Double-digit price growth to stick around as ‘property boom’ arrives
According to leading indicators, Australia’s property boom officially began in November, following several slow months on the back of the COVID crisis, with double-digit price growth already logged ...Read more

Property
How to turn your ‘costly’ lifestyle investment into a money-making asset
Emotionally driven holiday home buyers are being advised to seek maximum rental income and depreciation benefits to make their investments viable. ...Read more

Property
Dutch e-commerce giant VidaXL ramping up Australian operations
Netherlands-based online retailer VidaXL is ramping up its operations in Australia, by launching the build of a brand new 81,000 sq m national distribution centre in Melbourne. ...Read more

Property
RBA’s 30% property growth forecast to materialise in 75% of regions
Experts believe that RBA’s forecasted 30 per cent growth in property prices over the next three years will materialise in 75 per cent of Aussie regions. ...Read more

Property
HomeBuilder applications soar as first-timers enter the market in record numbers
Record numbers of first home buyers are coming into the market assisted by the government’s HomeBuilder stimulus, which is expected to help spur $50 billion in economic activity. ...Read more

Property
Dual Occupancy Homes – Why They Are A Smart Investment In The Current Market
Promoted by Metricon ...Read more

Property
4 factors affecting property market trends in 2021
Following a tough 2020, property investment activity is expected to rebound strong, expanding by 50 per cent in the second half of 2021. ...Read more

Property
House prices tipped to surge 30% on the back of cheap money
According to new documents released from the Reserve Bank of Australia, persistently low interest rates could push up property prices by as much as 30 per cent. ...Read more

Property
Double-digit price growth to stick around as ‘property boom’ arrives
According to leading indicators, Australia’s property boom officially began in November, following several slow months on the back of the COVID crisis, with double-digit price growth already logged ...Read more

Property
How to turn your ‘costly’ lifestyle investment into a money-making asset
Emotionally driven holiday home buyers are being advised to seek maximum rental income and depreciation benefits to make their investments viable. ...Read more

Property
Dutch e-commerce giant VidaXL ramping up Australian operations
Netherlands-based online retailer VidaXL is ramping up its operations in Australia, by launching the build of a brand new 81,000 sq m national distribution centre in Melbourne. ...Read more