Great news for mortgage holders. After 4 months of stable interest rates, the folk over at No 1 Martin Place have decided to leave rates on hold again, leaving the cash rate at 4.50%.

There had been much speculation that rates would increase, mainly due to Australia's continued economic strength which stems from the resources boom and continues to be fuelled by China's surging growth. This economic expansion is likely to accelerate in 2011 and the Reserve Bank knows it and will be keen to keep inflation in check.

With this in mind, it seems that rate rises may not be too far away. In fact economists at Ninemsn are tipping that the cash rate will hit 6.0% by the end of the financial year.

Added to this of course is the prospect that the big 4 Banks may just increase rates independently of the RBA, and the number seems to be 20 basis points. They have certainly been making lots of noise over the past couple of weeks about their increasing cost of funds, but it seems like a bit of a Mexican Standoff, with none of majors wanting to move first.

Whether intentional or not, ANZ’s chief economist Warren Hogan has already “inadvertently” indicated that the ANZ will raise interest rates above and beyond the official RBA rises. Last week, Hogan stated that the RBA wants lenders to lift their rates by between 40-70 basis points, further commenting that the RBA will need to make two 25 basis point rises in the official cash rate to do that. Some quick maths reveals that there's a potential 20 basis point difference between the two.

Whatever the majors decide to de, we’ll keep you posted on our Facebook page.

Of course, if you would like to explore your options to fix your rate, or would simply like to review your current loans, feel free to give us a call on 1300 72 68 48 or request a free Home Loan Health Check here.