In a sign that the current interest rate cycle may be close to ending, the RBA this week increased the cash rate by 25 basis points to 2.6%.

While borrowers may be concerned about the rise, Mortgage Choice CEO Anthony Waldron says it is a “smaller hit” than previous rises and is a sign the RBA is starting to slow the pace of its “tightening cycle”.

Waldron says recent rate rises have encouraged some home-owners to shop around for better deals on their home loans.

He says while the rises have also resulted in some adjusting to household budgets, that is not being reflected yet in the economic data, which is why the RBA is still trying to combat inflation via rate increases.

“The Reserve Bank’s decision to slow the pace of tightening is great news for households, but I don’t think we’ve seen the end of rate rises yet,” Waldron warns.

Despite the recent rises, Mortgage Choice data shows the vast majority – 96% of borrowers during September – are opting for variable loans.