It’s the number one topic of conversation at just about every dinner party: what should we do about property? Should we fix our loans? And should we buy the dip or hold?

With rising interest rates there is now a mismatch between what sellers want for their property and what buyers are willing to pay. The mismatch has led to properties sitting on the market for a long period of time and then having the price reduced.

A freestanding three-bedroom Victorian cottage in South Australia’s Port Pirie had its asking price dropped from $119,000 to $99,000 after it sat on the market for 420 days.

In Seven Hills in Sydney, a six-bedroom, two-bathroom weatherboard house had its price dropped from $950,000 to $930,000 after sitting on the market for 55 days.

A home in Tarturua, Victoria saw its price drop dramatically from $870,000 to $660,000.

In addition to the mismatch between buyers’ and sellers’ expectations, there has also been a jump in distressed listings. A distressed listing occurs when a property needs to be sold quickly, normally at a heavily reduced price.

Banks are also trying to entice customers following three consecutive months of the Reserve Bank of Australia raising rates.

There are pros and cons to fixed and floating rates:

  • A fixed rate does give you stability in knowing exactly how much your repayments will be
  • But there is a chance it could cost you more in the long run.

tic:toc’s Live-in Loan Fixed Rate Home Loan attracts a rate of 4.59 per cent with a term of one year and a minimum 10 per cent deposit.

That compares with Well Money’s Equity Plus, which was much lower at 2.57 per cent and had a minimum deposit of 40 per cent. If you only have a 10 per cent deposit you could get a tic:toc Live in Loan Variable Rate with a rate of 2.59 per cent. also compared variable rates with one or two options having a lower interest rate than on Finder.

They found that out of the big four banks though, Westpac has the lowest rate, with customers being able to fix their mortgage for up to five years.’s research director Sally Tindall told Yahoo!Finance that if you are planning to refinance you’ll need to move quickly and move away from the big four banks.

She said: “There is currently just one fixed rate under three per cent and that rate has a target on its back.

“A handful of low-cost lenders and smaller credit unions are still offering relatively competitive fixed rates, but these are unlikely to stick around for long.”

She notes: “The variable rate market is a completely different story. Banks big and small are still falling over themselves to hand out discounts to ideal customers, primarily existing borrowers willing to jump ship from a competitor.”

Big Four Banks: Lowest rates

Rate type CBA Westpac NAB ANZ
1-yr fixed 4.99% 4.09% 4.69% 4.69%
2-yr fixed 5.79% 4.79% 5.59% 5.49%
3-yr fixed 6.39% 5.19% 5.79% 5.89%
4-yr fixed 6.59% 5.29% 6.19% 5.99%
5-yr fixed 6.69% 5.39% 6.29% 6.09%
Lowest variable 2.79% 2.64% for 2 yrs then 3.04% 2.94% 2.79%

Lowest home loan rates on

Rate type Lender Advertised rate
1-yr fixed First Option Bank 2.99%
2-yr fixed The Capricornian 3.39%
3-yr fixed Queensland Country Bank 4.29%
4-yr fixed QBANK 4.79%
5-yr fixed IMB Bank 4.89%
Lowest variable Homestar Finance, Credit Union SA 2.44%


With rising interest rates, now could be the time to buy or refinance because as South Australia mortgage broker, Chris Longwill says: “We’ve seen borrowing capacity reduced and people I’ve spoken to are really aware of that.

“I’m really impressed that people know that any interest rate hike will affect their borrowing power.”

He suggests asking your broker to requalify you if you are worried that your borrowing capacity has diminished.

He notes however that: “Some people have had a pay increase. That’s probably going to make up for the increase and improve your borrowing power.”

Zippy Financial Director and Principal Broker Louisa Sanghera agreed that the current fixed rate offerings are often higher than variable home loan rates.

She said: “The real winners were those property owners who fixed their interest rates last year.

“Anyone wanting to fix the rates on their mortgages ideally should have done so last year when rates were in the one or two per cent range.

“Fixed rates are already in the four to six per cent range, depending on the fixed loan term, which is generally well above the current variable option in most cases – even after the three successive cash rate increases recently.”

She said that borrowers should review their individual circumstances and seek advice before deciding whether or not to fix their interest rate.

“Borrowers should consider whether locking in these significantly higher rates is likely to benefit them in the long-term before no one knows when the current rising interest rate cycle will end.”

“It is vital for borrowers to understand their household budgets to ensure they are well-placed for future interest rate adjustments.

This may include reducing discretionary spending now if they are worried about their cash flow, and potentially refinancing for a better home loan deal if and when it is appropriate for them.”

She had only recently started to see clients paying higher property mortgage repayments following interest rate hikes the last three months.

“The RBA won’t have seen any real benefits from the first rate rise yet, such as reduced spending, but they need to increase rates gradually so that borrowers can adjust to the new repayments.”

What you can do about rising interest rates:

  1. Review your budget
  2. Talk to your broker
  3. Compare the variable and fixed options on the market
  4. Review your existing loan to see if there are any break fees
  5. Ask your current lender for a better deal if you have a good credit history and stable income.



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