woman using her phone and laptop to check rates

As we all know, the OCR (Official Cash Rate) is the rate set by the Reserve Bank of Australia (RBA) that commercial banks use when lending money to each other. This rate influences other interest rates in the economy, such as the interest rates on home loans and business loans.

While the OCR was at its record low of 0.1% back in November, things have changed. We're in 2022, and it has gone up. This, of course, means an increase in interest rates on loans and such. Overall, this will make it much more difficult for people to afford their repayments.

That being said, what do brokers have to say about this rate hike? Let's find out:

How Brokers Are Reacting to the Official Cash Rate Hike in Australia

In an attempt to battle surging inflation, the Reserve Bank has lifted the target cash rate for the fifth time in a row. It was announced that the OCR would be lifted to 2.35%. Now, how do brokers react to this? Well, many have bad news.

Many brokers now believe that they've reached a point where borrowers will find it next to impossible to refinance their loans. In a sense, they'll be trapped in a "mortgage prison." This is a situation where borrowers are forced to stick to their current lenders at the rate they're being charged, all because they cannot secure a new loan. Why can they not secure a new loan? Because the rate that's assessed on their application is a few percentage points higher than the actual rate.

For instance, if one's property value and equity decrease, one will find it quite difficult to meet the deposit threshold needed to secure a new lender. As a result, refinancing becomes quite difficult. One might think that because they can afford higher payments that new lenders might consider this fact. Unfortunately, the assessment criteria nullify this, essentially blocking the individual from finding a new lender for refinancing purposes.

What Can Borrowers Do to Refinance?

That being said, all hope is not lost for borrowers. There are still many options out there, and it all lies in the individual needs of the borrower. However, as a general rule of thumb, a borrower must see a mortgage broker as soon as one is able to discuss the situation. Time is of the essence for refinancing, so if a borrower believes they can make higher repayments, acting now is the way to go.

Now, to actually do this, the first step is to reach out to one's existing lender and see what they can do. If they cannot offer a better rate, then looking for a broker who has more lenders is the way to go. One may even get access to second-tier or non-bank lenders, and these people can offer solutions that banks cannot.


While inflation is making a living comfortably a little tougher for all of us, the fact of the matter is that, when it comes to loans, all is not lost just yet. While the OCR has gone up, making loans more expensive, refinancing is still a solution that can help one find a better loan that helps save money. So, what are you waiting for? If you believe you can make higher payments, look around for better loans that offer more attractive rates right away! The earlier you go about it, the higher your chances of success.

Wealthy You is an Australian mortgage company that offers a variety of mortgage solutions to meet various needs. If you are looking for the best mortgage broker in Sydney, work with us today!