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Worry About Your Bank, not the RBA

Mortgage holders need to focus more on what their lender is doing with interest rates rather than be concerned about future rate rises by the Reserve Bank of Australia (RBA), says mortgage broker network 1300HomeLoan.

1300 HomeLoan Managing Director John Kolenda said the RBA currently has little choice but to stay on the interest rate sidelines and keep its cash rate at a record low of 1.5 per cent.

Mr Kolenda said consumers should worry more about the continued out of cycle rate movements by the banks.

“Banks have been hitting home owners with interest only loans and investors with rate increases while there have been some token reductions for owner occupier principal and interest rates,” he said.

“The central bank has room to offer some relief on rates given the subdued economy, but it’s more likely to keep the cash rate on hold for fear of igniting residential property markets, particularly the hot spots of Sydney and Melbourne.

“If you do want a more competitive rate, ask your lender or shop around for a better deal.”

Mr Kolenda said the rate movements across various home loan products meant it was more important than ever for consumers to be on top of their home loan.

“Although rates are at historical lows, complacency can still end up costing mortgages holders thousands of dollars a year,” he said.”

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