The Reserve Bank has announced that the Official Cash Rate (OCR) will hold at 2.25%. While there was no increase, the announcement actually carries a strong message about where interest rates could be heading next.
One of the biggest talking points was that the decision was incredibly close, with the Reserve Bank committee split 3-3 before the chairperson cast the deciding vote to hold the OCR steady. This is a clear sign that pressure for higher rates is building, and whilst the OCR hasn’t increased this month – increases later this year are now looking increasingly likely.
What does this mean for you?
Banks often move fixed rates before OCR changes officially happen. So whilst the OCR stayed on hold this month, we may still see fixed rates begin to edge upwards over the coming months.
The good news is that there are still strategies available to help reduce pressure and create more certainty. Every situation is different, and although rate increases will always have an impact on repayments, your loan structure and loan term will generally have more influence on cashflow.
You may benefit from:
- Reviewing upcoming refix options early
- Restructuring lending to improve cashflow
- Exploring whether refinancing could create better flexibility
- Locking in certainty before further increases occur
The key message from us: Don’t panic, but don’t ignore it either.
Even if your mortgage isn’t due for review until later this year or early next year, it’s still worth having a conversation now so you can understand your options ahead of time.
If you’d like to review your lending, talk through strategy, or simply get clarity on your options and the best next steps ahead – Get in touch. We’re always happy to quickly review your numbers.Â
