What economists predict for RBA rates
In March, Westpac Group’s chief economist Luci Ellis predicted that after the RBA raised rates to 4.10%, there would be three more rate rises in the coming months. With ongoing global conflicts and economic uncertainty, some analysts suggest mortgage borrowers might consider reviewing their rate arrangements, but there are risks.
Fixed vs variable: weighing the options
Wealth Within’s chief analyst Dale Gillham told SBS News that now is “absolutely” a suitable time for mortgage holders to review their loan rate and consider switching from variable to fixed. Canstar spokesperson Sally Tindall also noted that the RBA’s latest meeting comments and major bank forecasts could make borrowers uneasy, especially those with tight budgets.
If you lock in your rate now, you can avoid future rate rises and bank increases to variable rates during the fixed period, but you could also miss out on potential rate cuts. As Tindall pointed out, if you have locked your mortgage rate and the central bank cuts rates and banks reflect that on variable rates, you won’t benefit from the cut. Savings.com.au editor Dominic Beattie added that fixed rates are usually higher than variable rates. When you choose a fixed-rate mortgage, it generally means you may not be able to make extra repayments, and it could be difficult to refinance or exit early during that period, otherwise you may have to pay thousands of dollars in break costs.
For borrowers weighing these factors, reviewing your current loan structure and understanding the trade-offs can help you make a more informed decision.