Higher rates for fixed rate loans
Since early September, lenders have raised rates on over 180 fixed home loan products, including 88 rate hikes in the past fortnight.
According to financial comparison website RateCity, this trend shows borrowers where lenders think the market is heading.
Alex Parsons, CEO of RateCity, said longer-term fixed rates are on the way up with about half of all four- and five-year fixed rate products climbing in the past two months.
By comparison, shorter-term fixed rates remained largely unchanged, according to Mr Parsons, with one-year fixed rates still as low as 4.29 per cent.
"We have seen a lot of competition in the shorter term fixed rates. While they are also subject to the same market forces as longer terms, they're a lower risk method for institutions to offer hot rates to attract new customers," he said.
Mr Parsons said all borrowers need to be prepared for inevitable rate rises.
“Borrowers should prepare for the eventuality of higher interest rates in the future and make sure they could comfortably afford to service the loan if rates increased to the historical average of around seven per cent or even higher.”