September Update
As we move into spring, we’re seeing new energy in the home loan and property market. Spring always brings fresh house listings and renewed activity, making it a great time to check in on your mortgage.
The Reserve Bank Raised the Official Cash Rate
Recently, the Reserve Bank raised the OCR by 25 bps, taking it from 2.50% to 2.75%.
By doing this the Reserve Bank aims to cool inflation and bring it back down to its normal target over the next year or two.
What this means for you is that short-term interest rates have nudged up slightly, but the Reserve Bank expects things to settle down as global prices stabilize.
What’s Happening with Interest Rates Right Now?
When you look at current fixed mortgage rates, short-term options (like 6 - 18 months) are generally the lowest interest rates in the market, hovering around 4.7- 5% for special deals. With longer-term rates being 5%+
Because short-term rates are currently cheaper, many homeowners face a common dilemma:
Do you fix short to save money today, or fix long for peace of mind?
A Smart Way to Protect Yourself: Splitting Your Loan
Rather than putting your entire home loan into a single fixed term, a popular strategy right now is splitting (or "tranching") your mortgage into two or three smaller pieces.
For example, you might fix one portion of your loan for 1 year to take advantage of lower short-term rates, and fix another portion for 2 years.
This simple approach gives you two major benefits:
Fewer Surprises: Your whole mortgage won't come up for renewal at the exact same time, protecting you if rates jump unexpectedly.
Better Balance: You get the savings of lower short-term rates today while keeping your future repayments predictable and manageable
Banks are Fighting for Business (Which Works in Your Favor!)
Even with interest rate changes, banks are extremely eager to attract quality borrowers. Right now, they are offering very generous incentives to secure your business:
Cashback Bonuses: Banks are offering cash back payments—often between 0.90% and 1.00% of your total loan amount. On an $800,000 home loan, that’s up to $8,000 cash back in your bank account to help cover legal costs, moving expenses, or home updates.
Hidden Rate Discounts: The rate you see advertised on a bank's website isn't always the lowest rate they can offer. Depending on your situation, we can often negotiate custom discounts behind the scenes that are lower than their published rates.
