• Home
  • About Us
  • Services
    • Purchase A HomePurchase A Home
    • RefinanceRefinance
    • Joint ownershipJoint ownership
    • No Deposit LoansNo Deposit Loans
    • Interest-only LoansInterest-only Loans
    • Interest only loan with offsetInterest only loan with offset
    • Investment LoanInvestment Loan
    • Interest only Investment loanInterest only Investment loan
    • Car LoansCar Loans
    • Construction LoansConstruction Loans
    • Low Deposit LoansLow Deposit Loans
    • RentvestingRentvesting
    • Bridging LoansBridging Loans
    • Land Equity Construction LoanLand Equity Construction Loan
    • Land Investment LoansLand Investment Loans
    • Home loans for single parentsHome loans for single parents
    • Home loans for nursesHome loans for nurses
    • Home loans for DoctorsHome loans for Doctors
  • Process
  • Resources
    • BlogsBlogs
    • GuideGuide
    • CalculatorsCalculators
    • Property ReportProperty Report
  • Contact Us
1300 796 937
...
28, February, 2022 - News

3 minute Read

Mortgage Rate Hikes Could Be Coming As Early As June

Joseph Daoud

3 minute Read

If you’re new to the property market, and an estimated one million of you are, you are about to experience your first rate hike. This time earlier than predicted, at least according to the Commonwealth Bank (CBA) who have just brought their interest rate increase estimation forward from August 2022 to June 2022.

Why have they brought it forward? It’s a mixture of things but the main culprit being the now record levels of the costs of living, which is a sure sign of inflation. This will therefore put pressure on the Reserve Bank to call a rate increase as one of the RBA’s roles is to monitor and control inflation as much as possible.

In a statement made by RBA Governor Philip Lowe before the House of Representatives Standing Committee on Economics, he discussed supply chain issues and the rising rates for cars and electronics.

“So we want to see how that goes, and I think these uncertainties are not going to be resolved quickly,” Mr Lowe said. “We are prepared to take the time, particularly given our inflation history and the prospect of low unemployment.”

It was this statement that changed CBA’s mind about when rates would rise. Gareth Aird, CBA’s head of Australian economics, wrote, “We interpret this statement to mean that the RBA will conclude that inflation is ‘sustainably within the target range’ if the next two inflation prints are in line with their forecasts, provided wages growth continues to accelerate and the labour market further tightens, as we expect. Based on the Governor’s comments last week we believe the RBA’s central scenario and reaction function is consistent with a first increase in the cash rate in August 2022.”

Gareth Aird also wrote, “we estimate there are over one million home borrowers who have never experienced an increase in mortgage rates.”

The official cash rate has been at a record low of just 0.1% since November 2020 as a response to the pandemic, but it is expected that will jump up by 1% by the end of 2022 and then 1.25% in 2023. A 1% rise doesn’t sound like that much, but it could mean hundreds, if not thousands in some cases, extra every month on your mortgage repayments.

Those with variable rates will feel the impact immediately but those on fixed rates will not be spared either. Mr Aird believes that $500 billion worth of fixed home loans are set to expire over the next two years which will mean those loans will also be affected by the rate hike.

August is still the month most economists have marked out for the hike but who knows, maybe the CBA is right. Regardless, it is important to be ready for a rate hike and if you need to refinance within the next two years, be sure to speak to a broker at It’s Simple and ensure you are making responsible financial decisions.

More Articles.

...
May 15, 2022 - News
Price Caps Raised For Home Guarantees

Prime Minister Scott Morrison has just recently declared that the government’s Home Guarantee Scheme will have higher maximum property prices and more available places per year. From July 1, this price upgrade will qualify houses in two out of five (40%) suburbs nationwide for the scheme. This is up from 24.1% according to analysis by […]

Joseph Daoud

3 minute Read

...
April 15, 2022 - News
The Cause of Australia’s Rental Price Explosion

Rental prices have increased dramatically right across the nation due to record low vacancy rates. Capital city rents have risen by 11.8% over the past 12 months and rose by 2.2% in just the last month, according to SQM Research. Louis Christopher, SQM Research managing director said that “The magnitude of rental increases across the […]

Joseph Daoud

2 minute Read

...
April 7, 2022 - Purchasing A Home
Knowing Your Credit Score and How It Can Help You Get Your Mortgage

https://itssimple.com.au/wp-content/uploads/2022/04/Ep126_-_Joseph_Daoud_mixdowna3qma.mp3Podcast: Play in new window | Download Just recently, our founder and CEO, Joseph Daoud, appeared on the Real Estate Right podcast to discuss the importance of credit scores. While you may be familiar with the definition of a credit score, you may not be so familiar with the role it plays in your mortgage. [...]

Joseph Daoud

2 minute Read

Let’s Have A
Chat.

Contact us

Pages

  • Home
  • About Us
  • Legal

Services

  • Purchase A Home
  • Car Loans
  • Construction Loans
  • Investment Loan
  • Low Deposit Loans
  • Refinance Home Loan

Resources

  • Blogs
  • Guide
  • Calculators
  • Free Property Report
  • Let’s Get Started
  • Contact Us

Legal stuff:

It's Simple 2021 © Its Simple Pty Ltd. Trading as It’s Simple Finance (Credit Representative 495852) is authorised under Australian Credit Licence 389328. ABN: 22 637 831 157 | ACN: 637 831 157

Interest Rates are correct as at 27/05/2021 and subject to change at any time. The interest rate provided applies for a 4 year fixed rate with a LVR of 80% or lower. The comparison rate is based on a loan amount of $150,000, over a 25 year term.

WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

Terms, conditions, fees and charges apply and your full financial situation would need to be reviewed prior to acceptance of any offer or product.

Your full financial needs and requirements need to be assessed prior to any offer or acceptance of a loan product. This page provides general information only and has been prepared without taking into account your objectives, financial situation or needs.

We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances.

Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.