RBA’s Rate Increase and Medical Equipment Finance

The 0.25% increase in the cash rate last week will have limited effect on finance for medical equipment.  The fixed term – fixed rate facilities that are typical for asset finance change weekly and, unlike variable residential mortgage rates, are independent of the Reserve Bank’s monetary policy.  There was, however, upward pressure on the 90-day bank bill rate, which rose by 12 points since last Monday.  Three and five year term deposit rates were mostly unchanged.

It’s easy to form the impression that an RBA increase will mean higher interest rates for all forms of finance, but lenders tend to ‘factor in’ anticipated rate changes a little at a time based on their cost of funds, individual perceptions of general trends, and strategies regarding market share.

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