Banks begin end of super cheap fixed mortgage rates

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As noted over the past week, the RBA’s bond market back-up is going to kill sub-2% fixed-rate mortgages in short order. To wit:

Westpac has hiked its fixed mortgage rates for a second time in three weeks, becoming the first major bank to increase home loan rates in response to Tuesday’s decision by the Reserve Bank to abandon its yield curve target.

Westpac pushed its three-year fixed rate for owner-occupiers up by 21 basis points to 2.29 per cent; and the four-year and five-year fixed rates up by 10 basis points to 2.69 per cent and 2.99 per cent respectively.

And more:

Australia’s largest home loan lender the Commonwealth Bank has hiked fixed rates on home loans by 0.25 per cent to 0.4 per cent. This is the second time in around a month the bank has hiked borrowing rates.

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Bond yields have flamed out in the last few days:

This will run for a while before crashing commodity prices turn yields lower again.

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Assuming no stimulus in China.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.