Australians could soon be paying more than $26 billion a year in extra mortgage repayments as interest rates begin to "normalise", but the Commonwealth Bank argues there are several reasons why most households will be able to cope just fine.
Key points: The RBA's interest rate decision will be announced at 2:30pm AEST, followed by a rare press conference from the governor No-one is expecting a rate rise, but there are likely to be announcements about the future of other measures that have kept mortgage rates very low CBA says households should be able to cope with a forecast rise in the cash rate from 0.1 to 1.25 per cent over the next two-and-a-bit yearsMortgage costs to jump as interest rate rises loom, warns CBA
Mortgage costs to jump as interest rate rises loom, warns CBA ahead of Reserve Bank meeting
By business reporter Michael Janda
CBA is expecting interest rates to rise earlier and faster than many other institutions. (ABC News: John Gunn)
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Fixed rate home loans are at their lowest ever — but they come with a catch
Fixed rate home loans are at their lowest ever — but they come with a catch
By David Taylor
The banks want to lock you in as a customer now for as long as they can.(ABC News: Grant Wignall)
Interest rates in Australia have plumbed new depths since the Reserve Bank's monetary policy announcement on Melbourne Cup Day,
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It's taken several weeks, but following a number of extraordinary policy measures by the RBA (including a formal adoption of Quantitative Easing), at least one bank has taken the decision to offer a three-year fixed home loan rate of 1.89 per cent.
That's low. In fact, according to interest rate comparison site, Mozo, it's the lowest commercial fixed interest rate (with an 80 per cent Loan to Value Ratio or LVR) the country has ever seen.
Fixed rates are dropping to all-time lows because the banks are desperate for your money. So far the evidence shows they're…