Rates on the rise following CBA's hike last month

Fourteen lenders have hiked their four-year fixed rates in the wake of CBA’s controversial rate hike a month ago today.

By contrast, just 1 lender has cut its 4-year rate in this time, a sign that four-year fixed rates might not be at record lows for much longer.

RateCity.com.au research director, Sally Tindall, said record low four-year fixed rates might not be around for much longer.

“With the RBA’s term funding facility now in its final stretch and the next cash rate hike firming up for early 2024, if not before, the writing is on the wall for ultra-low four- and five-year fixed rate loans,” she said.

“So far Australia’s second largest bank, Westpac, has kept its four-year fixed loan at a record low of 1.89 per cent, but it’s hard to see this rate sticking around for long."

“The idea of paying under 2 per cent interest until 2025 is an incredibly attractive proposition for many homeowners, but that doesn’t automatically make it a good idea. Take the time to work out what type of loan suits your finances."

“Fixed loans come with extra restrictions such as caps on extra repayments, typically no offset account and break fees if you want to get out early."

“One option is to split your loan so it is part fixed and part variable, which typically lets you make extra repayments on the variable portion."

“Money might be cheap now but in a few years’ time it’s likely to be a very different story, provided the economic recovery stays on track, particularly for anyone coming off a fixed rate,” she said.