Although the RBA have not shifted the official cash rate in six months, the last few months have seen a number of banks adjusting their standard variable interest rates outside the RBA cycle. In many cases, interest rates on loans for investment purposes or loans with interest only repayments have increased. On top of this, in the last two weeks we have seen the four major banks lead the market with further increases on variable rates across all loans.

The reasoning that banks are giving for these adjustments is varied. For example, the Australian Prudential Regulation Authority (APRA) – the national bank regulator – have requested that banks cap the growth of their investment lending. And this is one of the drivers behind the adjustments we have seen in investment and interest only loans, as banks have tried to manage their growth to stay within the limits set on investment lending.

The second factor coming into play concerns the increases in the levels of capital, or savings, that banks are now required to hold in reserve for every dollar that they lend to consumers. The government and industry regulators place a lot of importance on ensuring our banking system is safe and secure, and these changes are designed to enhance the already strong position.

But, it means the cost of doing business effectively goes up for the banks – and that means us as customers are wearing some of that cost

So what does this mean for us as borrowers? It means we need to make sure that, just like checking your smoke alarms and cleaning out the gutters, we carry out regular checks and maintenance on our home loans.

It’s a simple as a phone call – talk to one of the team at Union Shopper Mortgage Planners and we can help you ensure that what you have is right for you. For a free home loan health check contact us on 1300 760 or online by completing the form on this page.