Hindsight is a marvelous thing and excluding guessing where AfterPay’s share price might sit today (545% above issue price), getting interest rates right would arguably have made us all the richer. 2019 threatens to hold all the omens of 2018 plus a few we would not have otherwise imagined. In the last several weeks we saw 3 home lenders raise their variable and fixed home loan rates, one by as much as 27 basis points, blaming increased cost of non-deposit funding (savings rates have dropped from 7.3% in 2008 to just 1.35%; below the rate of inflation) and regulation to increase capital reserves.

I think other banks will be forced follow to follow lead and this in the face of the mortifying news these illustrious institutions have been collectively ripping us off for years.

My guess is the Reserve Bank will have no alternative but to decrease the Official Cash rate due to slowing national and international factors but don’t hold your breath expecting the banks will pass on any of the cut. This of itself will be somewhat of a first but if the Shorten Labor Party win government look out. With so much bad air circulating I’d be fixing a portion of my variable loan before fixed rates join the stampede in earnest.

By Richard Aulsebrook.