Markets15 November 20215 min read
November 2021: the RBA abandons the yield target
The three-year yield target was quietly killed. Fixed mortgage rates began climbing well before the first cash-rate hike.
The signal
On 2 November 2021 the RBA removed the 0.10% three-year yield target without replacing it. Three-year fixed mortgage rates had already moved from 1.95% to 2.75% over the previous six weeks. The rate cycle had effectively started — the cash rate just hadn't caught up yet.
The narrowing window
The 'fix everything for five years at 1.99%' window had closed for new applications by late October. Investors with pre-approvals in flight scrambled to settle before fixed rates re-priced again in December.
Dax Stanley
Founder & Principal Strategist, Hera Property. #1 international bestselling author of Real Estate Investing Using ChatGPT.