Negotiation remains the key as rates continue to rise

Negotiation Remains the Key as Rates Continue to Rise

Mark Stevenson, Managing Director at Bell Partners Finance (now Evolve Lending & Finance) wrote for The Western Weekender in July 2022 as the RBA delivered its third consecutive monthly rate rise, pushing the cash rate to 1.35 per cent and sparking widespread debate about how much further rates would go.

Forecasts at the time ranged from 2.0 to 3.0 per cent by year end, with some analysts expecting the RBA to move aggressively every month while others anticipated pauses to assess the impact of previous decisions. Against the backdrop of the war in Ukraine driving cost-of-living pressures and inflation tipped to hit 7.0 per cent by December, variable home loan rates had already moved above 3.0 per cent and fixed rates were sitting around 5.0 per cent. Borrowers rolling off fixed rate loans in the 2.0 per cent range were facing a particularly sharp adjustment.

Mark noted that the team at Bell Partners had been telling clients for months that the record low cash rate of 0.10 per cent was an emergency measure that could not last, and that preparation was essential. The rate cycle had arrived exactly as anticipated, but many borrowers were still navigating the adjustment without a clear plan.

Despite the rising rate environment, the lending market remained competitive. Banks were still fighting to retain customers and negotiation was very much alive. Lender retention teams were in some cases offering cash back to borrowers who signalled they were prepared to move. The opportunity to negotiate a lower rate had not disappeared simply because the RBA was hiking, it had just shifted in form.

In this environment, having a broker work on your behalf makes a real and measurable difference. The right approach and the right relationships can still deliver meaningful savings even in a tightening cycle.

If rates have moved and your loan needs a review, contact Evolve Lending & Finance to explore what is still negotiable.