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Revealing data shows Commonwealth Bank is bracing for triple rate hikes, despite forecasts of only one RBA increase in May.
Analysis from Bheja Home Loans reveals the bank's fixed‑rate pricing is signalling expectations of multiple RBA cash rate increases, even as its economists publicly forecast just one more rise.
Bheja chief executive Pravin Mahajan said that ahead of the RBA's February cash rate decision, Commonwealth Bank lifted its three‑year fixed interest rate for owner‑occupier loans by 0.7 percentage points to 6.04 per cent - the largest 30‑day increase by any Australian lender on a single product.
While CBA economists officially expect the cash rate to peak at 4.1 per cent in May, Mr Mahajan said the bank's pricing behaviour tells a different story.
'The move effectively prices in three consecutive 0.25 per cent RBA increases,' Mr Mahajan said. 'CBA moved before the RBA even announced the first rise.
'Their pricing tells us they expect at least two more rises.'
With meetings scheduled for March 17 and May 5, multiple rises could arrive rapidly.
If three standard 0.25 per cent hikes hit, a homeowner with a $750,000 mortgage could be slugged about $360 extra a month.
Revealing data shows Commonwealth Bank is bracing for triple rate hikes, despite forecasts of only one RBA increase in May
Canstar data insights director Sally Tindall said the fixed‑rate tide is on the way up
Any further rate rises will add fresh pressure to households already dealing with elevated repayments.
Required mortgage payments as a share of household income are now above the historical average, according to the RBA Board's minutes, even as households funnel extra funds into offset and redraw accounts.
The RBA said it remained open‑minded about the path ahead but noted that policy decisions will depend on the flow of economic data.
'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.
Canstar data insights director Sally Tindall said the fixed‑rate tide is on the way up.
'It's a big change from last year when the bank was offering up a 2-year special at 4.99 per cent,' she said.
'While the majority of borrowers are on variable rates, anyone who was considering fixing may feel like they've missed the boat.'
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