Are You Paying More for Your Home Loan? How to Fight Back Against Hidden Rate Hikes
Homeowners across Australia may be celebrating as the Reserve Bank of Australia (RBA) keeps the cash rate on hold, but that doesn’t mean all lenders are following suit. Some banks have quietly increased variable home loan rates, leaving borrowers unknowingly paying more.
These “out-of-cycle” rate hikes can go unnoticed—but you don’t have to sit back and accept them. Here’s how to stay on top of your mortgage and ensure you’re not paying more than you need to.
Which Banks Are Raising Interest Rates?
Reports from Mozo reveal that several lenders have increased their variable home loan rates despite the cash rate remaining unchanged. Some affected lenders include:
- ANZ
- Commonwealth Bank
- Macquarie Bank
- Easy Street
- Great Southern Bank
While some rate increases may be as little as 0.03%, others have gone up by 0.15%—a change that could cost borrowers hundreds each year. For example, an increase of 0.15% on a $500,000 loan adds $750 extra annually to your repayments.
How Are Australian Mortgage Holders Coping with Rising Rates?
A recent Canstar study shows how homeowners are adapting to rising costs:
- 35% are reducing extra repayments
- 29% have stopped extra repayments altogether
- 26% are using redraw or offset funds to manage costs
- 22% are refinancing to a lower-rate loan
- 12% are extending their loan term
While these strategies may offer short-term relief, some come with long-term financial risks.
The Hidden Costs of Adjusting Your Loan Repayments
Making changes to your repayment structure can help during difficult financial periods, but it’s essential to consider the long-term impact.
- Reducing or stopping extra payments increases interest costs and extends your loan term.
- Using redraw or offset funds results in higher interest payments.
- Extending your loan term may lower monthly repayments but adds significant extra interest over time.
For instance, extending a $500,000 loan at 6.73% from 20 to 25 years may reduce monthly repayments by $348, but it could add $123,464 in extra interest over the lifetime of the loan.
What Can You Do to Avoid Paying More?
Out-of-cycle rate hikes benefit your lender—not you, but there are steps you can take to ensure you’re getting the best deal.
1. Know Your Current Interest Rate
Check your loan statements or ask your lender directly. If you’re unsure, we can help you investigate and compare your rate.
2. Negotiate with Your Current Lender
If your rate is higher than expected, we can help you ask for a discount and provide a script to negotiate with your lender.
3. Consider Refinancing to a Lower Rate
If your lender won’t budge, switching to another bank with a more competitive rate could save you thousands over the life of your loan.
🔹 Explore refinancing options today: CBM Mortgages Refinancing Guide
Don’t Let Sneaky Rate Hikes Cost You – Get Expert Help Today
At CBM Mortgages, we specialise in helping Australian homeowners fight back against unexpected rate increases.
📞 Need advice? Contact Us to check your rate and discover better mortgage solutions.
Read our blog post on fixed rates dropping here
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
Post amended by Craig McDonald 08/06/2025
