Property investors should consider the possibility that retail banks may raise rates independently.

Home loan and mortgage specialist Resi expressed concerns about the 25 percent chances of banks raising their mortgage rates independently even if the Reserve Bank (RBA) holds rates at 4.5 percent.

Resi chief executive Lisa Montgomery said, “It is really imperative that the borrowers look at the interest rates they are paying and how much spending they may have overall, not just on their home loan but also on other debts that they might have.”

Increased funding costs may prompt retail banks to increase rates. Montgomery disclosed that borrowers can expect a 15 to 20 basis point increase with retail bank rates if the RBA rates remain the same a few weeks after the election.

The RBA could hold rates, at least, until the next inflation figures are out by October. The period from today to October, according to Montgomery, would be the perfect time to pay more for your home
loan.

“Getting yourself a buffer... is imperative if you want to fall on to that later, she said.