With NAB the latest bank to jack up rates on fixed loans, borrowers are flooding back to variable rate mortgages, which will make RBA rate rises more effective.
For owner-occupiers, NAB lifted its interest rate on Friday for four-year fixed rate loans by 0.60 of a percentage point to 4.79 per cent. This would add $400 a month, or $4800 a year, to the cost of a loan for a median price property in Sydney assuming a 20 per cent deposit.
Other banks have also increased fixed rates while keeping variable rates competitive. Westpac lifted most of its fixed rates twice in one week in mid-April. ANZ also upped its one- to five-year fixed rates by up to 0.60 of a percentage point in mid-April.Analysts say variable rate borrowers should also brace for higher repayments once the RBA begins tightening monetary policy.
. Bank analysts expect major banks to quickly pass through the full impact of official rate rises to variable rate customers.
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