min read
· Posted on
February 21, 2024

Not a homeowner? Here’s how the May interest rate rise impacts you

Interest rates just rose 0.25% to 0.25%. What does that mean if you don't have a home loan?

What's the key learning?

  • The interest rate rise still impacts you, even if you don't have a home loan.

When the interest rate rises, often we hear a lot about it impacts homeowners. But what about if ya don’t own a home!?

Yup, you guessed it. The interest rate rise still impacts you, just in a slightly different way. 

How does an interest rate rise impact my savings account?

If the RBA increases the official cash rate, then the cost of borrowing money increases too. In a practical sense, that means your bank and lender will likely raise their interest rates, too.

So if you have a savings account, then your savings account interest rate might increase. AKA, you may see your savings account earn more interest per month.

Buuuut don’t get ya hopes up. The banks are generally quicker to pass on rate hikes that work for them (i.e. loan rates) than rate hikes that don’t (i.e. savings rates).

How does an interest rate rise impact other loans?

If you have another loan, like a personal loan or a car loan, then you may also see the interest rates on that loan rise too. 

But there is good news for credit card holders: experts don’t reckon rates will rise for credit cards… but only ‘cos they never really went down in the first place. 

How does an interest rate rise impact investments?

The good news is: a rate hike doesn’t directly impact your investments. The bad news? Well, generally economic announcements like this can lead to some market uncertainty. That can cause a ‘lil bit of volatility in the market. 

It’s generally nothing to panic about though, because investing is a long-term game.

Ready to win at money?

Sign up for Flux and join 100,000 members of the Flux family

A button to App StoreGoogle Play store button
Excellent  4.9 out of 5
Star rating