If you are a homebuyer or a property investor you should think about laying an extra place for the Grinch at Christmas Dinner, because he has made a big comeback in the last few weeks.
ANZ late this week became the last of the Big Four banks to raise their mortgage interest rates, following CBA, NAB and Westpac in upping rates for investors.
ANZ’s variable rate for investors is now at 5.6 percent while NAB also increased rates for investors to 5.5 percent.
CBA and Westpac have also upped rates for owner-occupiers, in a trend which the pundits say is going to be one of the features of 2017. The low interest rate party, many claim, is over.
It’s all part of a general trend which is gathering force, despite the Reserve Bank holding official interest rates steady at 1.5 percent this week.
“It’s all about the cost of funding, which is an international marketplace, and funding costs are going up after the Trump victory in anticipation of higher rates in the US,” says an insider at one of the Big Four.
“The only thing I can say is that the last time funding costs went up substantially, the banks upped their deposit rates in a bid to attract funds.
“That won’t be good for homebuyers, of course, but it’s going to be ok if you have cash in the bank.”
Australia is caught between two opposite dynamics in terms of interest rates.
On one hand, the global momentum is for higher rates off the back of what is happening, or expected to happen, under a Trump presidency.
In Australia, meanwhile, this week’s shock GDP figures, which showed that the economy contracted 0.5 percent in the September quarter would, in classic economic policy terms, put pressure on the RBA for another cut in official rates.
When it comes to mortgages, for the time being anyway, the Christmas Grinch’s hat will have the logo of one of the Big Four banks on it.
Elsewhere in the market, smaller banks have been slow to move their rates upwards and bargains can still be had under 4 percent.
Some reports claim that some smaller banks, and Suncorp was one named in a report this week, are about to cut rates on investment loans as they look to win business away from the Big Four.
If you are a property investor, that could be a nice present.