Why Is The CBA Warning Of Mortgage Lags As The Reserve Bank Sets Another Interest Rate Rise?


The Commonwealth Bank is warning of the risk a three-month mortgage lag poses to the economy if the Reserve Bank keeps raising interest rates aggressively. The RBA is widely expected to raise the cash rate target by 0.5 of a percentage point in September. That means that variable mortgage customers have not yet felt the cashflow effects of at least the last percentage point of rate rises. What do you think LiveTribers? Why is the CBA warning of mortgage lags as the Reserve Bank sets another interest rate rise?

Posted by on 27 Sep 2022

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  • [0] [0]
    IamGroot

    obviously its gonna get higher than they expect it to be, were doomed!

    Posted by IamGroot on 01 Nov 2022
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  • [0] [0]
    Mikayla

    Imagine if the Govt passed legislation, that made it mandatory for the banks to pass on any interest rate changes within 24 hours of them being announced by the RBA. That would be mind blowingly difficult wouldn't it. Also, the Govt should make them pay interest to savings at the same rates. I'm sick of 40 years worht of savings, and the best interest rate I have ever seen, is 1%. Save up for a first house deposit, so easy.

    Posted by Mikayla on 09 Oct 2022
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  • [0] [0]
    alderwick

    the interest rate was to low for to long now they have to catch up which is finicially cripplying australians hopefully in the near future interest rate will stop or slow down

    Posted by alderwick on 08 Oct 2022
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  • [0] [0]
    Anney

    the inevitable game of catch up as usual....

    Posted by Anney on 05 Oct 2022
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  • [0] [0]
    Turbotom

    It always takes a while before changes are fully felt in the economy, so an interest rate change today doesn't change what people can spend till a bit later

    Posted by Turbotom on 05 Oct 2022
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  • [0] [0]
    dodger37

    well it seems that in October the RBA has listened to concerns and raised only the base rate by 0.25 % so it seems coold heads are prevailing over the alarmists !

    Posted by dodger37 on 05 Oct 2022
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  • [0] [0]
    LeafyGreen

    Wake up people this is being done on purpose to crush the low and middle income earners so the rich can buy up.

    Posted by LeafyGreen on 02 Oct 2022
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  • [1] [0]
    June

    This is very possibly because of the current high average property prices and therefore high level of mortage loans born by anybody. I have seen some home owners or property investors selling investment properties to help their own primary residence homes to reduce the amoung of loan stress. However, rising interests rates is good to people who rely on or who have good cash savings and low/no loan.

    Posted by June on 02 Oct 2022
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  • [0] [0]
    mact

    Because as usual all banks have one aim in mind......guess what? And don't forget people who have unsustainable debt and banks who lend irresponsibility have only themselves to blame!!!

    Posted by mact on 28 Sep 2022
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  • [1] [0]
    Paula

    Mortgage holders have yet to feel the pain from interest rises but as they adjust their finances the rates are still increasing so it will be December before they feel the rises from August and September with any future rises not felt in full until next year. The same goes for businesses. Watch out after Christmas as businesses start to struggle with a mix of higher interest rates, higher rent, higher wages, higher power costs, then the flow on from fuel, transport and groceries. 2023 isn't looking so good.

    Posted by Paula on 27 Sep 2022
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  • [2] [0]
    ere

    From a cash flow perspective the impact is not felt for three months on average for a CBA customer. "The lags across other lenders vary, but we estimate that on average the lag is around two to three months across the major lenders." Isn't Google great?

    Posted by ere on 27 Sep 2022
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