The rate you pay is not the cash rate
The RBA sets the cash rate, but each lender decides how much of a move to pass on and to which products. Interest-only investment loans are priced in their own tier and can move by a different amount, or on a different date, to owner-occupier loans.
After any decision, check what your lender actually did to your specific product, not just the headline announcement.
The knock-on effect on borrowing power
Lenders assess new applications at your rate plus a buffer. When rates move, so does the assessment rate, which means your capacity for the next purchase shifts too, even if your income hasn’t changed.
For investors part-way through a growth plan, that can bring a purchase forward or push it back by months.
IO expiry and the reversion question
If your interest-only period ends in the next year, the decision affects what you will be offered on rollover. Some lenders reassess servicing before extending IO; others don’t. Knowing which is which before the expiry date gives you options.
What to do now
Ask for a repricing on your current loans, model the reversion on any IO period ending soon, and re-run your borrowing capacity before you commit to the next property.
General information only. It does not consider your objectives, financial situation or needs. Speak with a licensed adviser and your accountant before acting. See our Disclaimer.
