Increase in lender’s three-year fixed rates seen as signalling two more rate rises, analysis suggests
Commonwealth Bank of Australia’s recent fixed-rate changes are signalling expectations of two further Reserve Bank of Australia cash rate rises, according to analysis from broker Bheja Home Loans, even though the bank’s economists have publicly flagged only one additional increase in May.
Ahead of the RBA’s February cash rate decision, CBA lifted its three-year fixed rate for owner-occupier borrowers by 0.7 percentage points to 6.04%, which Bheja’s research identifies as the sharpest 30‑day increase on a single mortgage product by any major Australian lender.
Bheja chief executive Pravin Mahajan said the move goes beyond the official house view from CBA’s economics team, which still projects the cash rate to reach 4.1% in May.
“The move effectively prices in three consecutive 0.25% RBA increases,” Pravin Mahajan (pictured right), chief executive of Bheja Home Loans, said in a Daily Mail report.
“CBA moved before the RBA even announced the first rise - their pricing tells us they expect at least two more rises.”
Following the latest increase in February, two additional 25‑basis‑point rises would add about $360 a month to repayments for a borrower with a $750,000 mortgage, based on Bheja’s calculations.
The pressure on households is already evident in the RBA Board’s minutes, which note that required mortgage repayments as a share of household income have moved above their historical average, even as many borrowers direct surplus cash into offset and redraw facilities.
The central bank has stressed that its decisions will remain driven by incoming economic data and its dual mandate.
“The board will remain focused on its mandate to deliver price stability and full employment and will do what it considers necessary to achieve that outcome,” the minutes said.
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