Home owners should look at locking in the interest rates on their mortgages as the banks get set to raise home loan and business rates.NAB, the Commonwealth Bank and ANZ have all responded to the tightening global credit market by lifting their variable home loan rate in excess of the Reserve Bank's last raise in December.
Federal Treasurer Wayne Swan has urged Australian banks to take into account the financial pressures that people will face as interest rates get set to rise, although he recognises that the rise in variable mortgage rates is a direct result of the US sub-prime crisis and not directly the fault of the banks.
Marquette Turner believes that there is more hurt to come as the US sub-prime crisis works its way through the financial systems, therefore a shift away from variable home loans is a reflection of uncertainty and caution.
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