However Luke Scheales, national sales manager for Mortgage House, warns this is the time when borrowers must keep a cool head and not adopt a knee-jerk reaction to the interest rate hike.
"Rather than panicking, what you need to do is to start setting yourself up where you can actually pay some additional funds into your loans now, reduce debts, get rid of credit card debts and personal loans where you are paying higher rates," he says.
"Go back to your vendor and see if you can refinance those now to get rid of those payments then put money into the home loans. You need to make sure that you've got loans with a redraw facility so that you can put in any extra funds later on. If you're struggling to make payments now then you should look at fixing."
The looming rate hike is a concern not just to borrowers but also to lenders who are likely to feel the pinch. "We expect if this rise takes place now it will lead to more loans going into arrears and slow the property market down further in the prime mortgage belt areas," says Greg Stevens, AIMS general manager for servicing and marketing. "We also see this will trigger more refinancing opportunities for borrowers as they compare their interest rate to other offers in the market place."
It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan