major lenders increase fixed rates

There is growing speculation behind the idea that interest rates in Australia are more likely to rise than fall. One of the clearest signs is that a wide range of lenders have been quietly lifting their fixed home loan rates across multiple terms. This is significant because fixed rates are not based on today’s cash rate, they are priced on what banks believe interest rates will be in the future.

When banks move fixed rates higher, it usually means they are seeing higher long-term funding costs and are also pricing in a greater risk that the RBA will lift rates down the track. In other words, fixed rate movements tend to act as an early warning system for where the market believes interest rates are heading, often well before the RBA actually makes a move.

The fact that these increases are happening broadly across the market shows a shift, where the conversation previously centred on when cuts might begin, it has now moved toward whether further increases are coming. This change in pricing behaviour suggests that banks are no longer confident that rates will fall in the near term, and are instead preparing borrowers for the possibility that higher rates may still be ahead.

Some of the major lenders that have recently increased their fixed rate include Westpac Group (St George, BankSA & Bank of Melbourne),Commonwealth Bank, NAB, Macquarie Bank & Suncorp.