With the Reserve Bank abandoning its suppression of the 3-year bond yield at 0.10% at its November 2021 meeting, interest rates exploded higher.
The 3-year interest rate swap rate now sits at about 1.35% and that is why home loan interest rates have increased substantially over the last two weeks.
On 14 September 2021 the Interest Rate Swap Market was pricing in a cash rate of 2.25% by September 2028.
Today, they are expecting a cash rate of 2.25% by November 2023. The graph below is what the Interest Rate Swap Market believes today the RBA Cash Rate will be each quarter for the next 10 years. We will update when a a significant movement in expectations changes.
Can your mortgage afford a 2.25% rise in interest rates?