With six years of declining home loan interest rates likely to come to an end in 2017, Aussie homeowners are now facing more mortgage uncertainty than they have in previous years.

A growing number of economists believe that the next interest rate move will be up. Even though the Reserve Bank of Australia (RBA) has been slashing interest rates every year since 2011, in recent weeks banks and other lenders have been increasing fixed and variable rates independent of the Reserve Bank’s moves.

People with mortgages are being urged to double-check their interest rates, shop around for better deals, and in some cases, consider fixed rates, which are climbing more than variable rates amid expectations of higher interest rates and greater inflation globally.

Michael McCarthy, chief market strategist at CMC Markets (Australia), said risk factors such as Trump’s looming presidency, rising inflation, and a falling Australian dollar make 2017 a difficult year to predict, leading to a wide range of forecasts. “The spread of estimates of what will happen over the next 12 months is wider than I have seen for many, many years,” he said.

McCarthy said banks need to do a better job of explaining their business dealings and how the Reserve Bank’s cash rate was not the sole factor driving mortgage rates. “In my view it’s going to be a rising interest rate environment. That means most moves are likely to be up,” he said.

The Reserve Bank’s next interest rate decision will be made at its February 7 board meeting, and economists do not expect any changes to be made then.

Craig James, chief economist at Commsec, believes the Reserve Bank would be “reticent to cut rates further unless it’s totally convinced that a rate cut will actually do some good”.

“I think the variable rate will be pretty constant through most of 2017. The longer rates remain stable, the greater the likelihood that the next move will be a hike rather than a cut,” he said. “We have seen [how] long term interest rates have pushed up, so the cost of borrowing for fixed rates has already gone up.”

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