Scott Morrison and Anthony Albanese are preparing for an election on cost of living pressures as petrol prices climb to record levels and the nation’s largest banks start pushing up their fixed mortgage rates.
According to a report by The Sydney Morning Herald, on Friday joined the other major banks by increasing a range of its fixed lending rates that had become increasingly attractive to borrowers through the pandemic-fuelled property market surge that has pushed median house values in Sydney beyond $1.3 million and to $960,000 in Melbourne.
Earlier this year, each of the major banks had two-year fixed mortgage rates below 2 per cent while five-year loans could be locked in for under 2.25 per cent.
Since the Reserve Bank held the official cash rate at 0.1 per cent on Melbourne Cup Day, all banks have started pushing up their fixed rates in response to higher global borrowing costs.
Record numbers of Australian home buyers have locked in interest rates during the pandemic. In October, 45 per cent of the $54 billion worth of new and refinanced mortgages were on fixed rates.
Canstar finance expert Steve Mickenbecker said fixed rates were only going one way. “The increase of the past few weeks means that the horse has bolted on the absolute sweet spot for fixed rates, but this week’s rate increases should nonetheless jolt some borrowers into action,” he said.
“Inflation is up in Australia and rocketing up in the US, meaning that there can be only one direction for interest rates, and that is up.”
Prime Minister Scott Morrison on Friday said the economy was moving out of its pandemic-affected period, with global pressures growing.
“The changes of what’s happening in the global economy means an environment in which economic management of Australia is going to be more important than ever,” he told Melbourne radio station 3AW.
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