Australian 3-year Bond Yield v RBA Targeted Cash Rate

Australian home loan interest rates are edging higher in line with 3-year bond yields, fixed 3 & 4-year home loans under 2% have already vanished from the menu in 2021. The difference shouldn’t make a major impact on local disposable income but 3-year bonds are trading well above the RBA Cash Rate which often signals a period of rising interest rates lies ahead. At this stage we’re mindful that home loans are set to be higher in the coming years but they remain incredibly low when compared to the last decade, or any other time in history.