Borrowers looking to switch mortgage lenders amid the recent increase in interest rates will be assessed by their new bank for the ability to repay a mortgage at almost 10 per cent, after the prudential regulator added its serviceability buffer to the banks’ higher variable rates.
None of the major banks have so far announced whether they would hike rates on mortgages following the Reserve Bank of Australia’s decision on Tuesday to increase the cash rate to 4.85 per cent , its highest level in 18 years. But the banks are expected to eventually pass on the interest rate rise in full to home loan borrowers.
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