The double-whammy of skyrocketing petrol prices and increasing interest rates means borrowers shopping for a home loan will be highly sensitive to the interest rate charged.
The recent interest rate rise of 0.25 per cent takes the official cash rate to 6 per cent but some economists are tipping more of the same for the end of the year. The latest rise will lift the standard variable home loan rate to 7.82 per cent, increasing monthly repayments on a $500,000 loan from $3717 to $3799 – an extra $82 a month.
As the accompanying table shows, online loans are as low as 6.71 per cent compared with 7.82 per cent on the average standard variable loan – a difference of 1.11 per cent. For mortgage borrowers groaning under the weight of massive loans, that’s a substantial saving….more