A report from a government committee has suggested that Australian Banks be forced to issue “Tracker Mortgages” (Aust Financial Review 27 March 2024).
Australian banks have unsurprisingly pushed back.
A “tracker mortgage” supposedly “tracks” the Reserve Bank cash rate so that your home loan rate remains at a fixed margin relative to the Reserve Bank cash rate.
The benefit is that a borrower will not be left (as currently happens) with a rate stranded high and dry well adrift of where it should be.
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