We all knew that interest rates would not stay low forever, and we’re now seeing the first signs that the downward trend is being broken. It’s public knowledge that the banks have been selectively raising rates. Recent evidence is Westpac and its related banks raising rates for interest only loans by 0.08%. And, only yesterday, my bank notified me of an increase in my line of credit of 0.15%.
What is not widely known is that since early October, the five-year swap rate (in red) has moved sharply higher, as shown in the chart below. For those of you with variable rate loans, I suggest that now is the time to fix some or all of your debt.