Although the Reserve Bank kept interest rates on hold at its August meeting thanks to a slowdown in house prices and lower-than-expected inflation results, borrowers should be aware that their bank or lender may still lift interest rates on home loans.

The banking industry has clearly flagged that it's considering lifting rates against the trend and out of cycle because the cost of funds is increasing. This increased cost is largely due to the ongoing European debt crisis and the roll-over of cheaper funding. 

This increase will affect any borrower who currently has or is looking at a variable rate home loan, or is near the end of a fixed rate term.

If interest rates are of concern to you, keep a close watch on fixed interest rate mortgages, as some lenders are now offering deals competitive with standard variable mortgage rates.

Depending on your situation, a low fixed interest rate combined with the certainty you will have over repayments may be more appealing to you than a variable rate - despite the fact a fixed rate offers limited flexibility.

If you need assistance determining the right home loan strategy or would like to discuss the home loan in your best interest, make an appointment today. Contact our office on (08) 9293 4888 or email finance@kalamundarealestate.com.au