Mortgage holders should prepare for an inevitable interest rate rise in the next six months, Australia's main finance broker organisation has warned.
Big banks are set to raise rates before the end of the year regardless of whether the Reserve Bank of Australia lifts the official cash rate, Finance Brokers Association of Australia spokesman Peter White told AAP
People with loans and those looking at investing need to be prepared, he said.
"It can be dangerous because ... they don't think about the consequence of when rates go up," Mr White said.
Although the rate rise would be gradual and most owners could handle an increase, Mr White said people need to remember cheap loans won't hang around forever.
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"Lending is all about acquiring something, so you're buying a car or buying a house and they're emotional decisions - it's hard to separate it all out at times," he said.
As costs of compliance and funds take a toll on banks' bottom lines, the chance of a rate rise is increasing.
"The banks have been talking about it for ages, the fact they are being squeezed on margin," he said.
"They are just going to step outside of what they RBA does."
The Bank of Queensland led the way by announcing an out of cycle home loan rate increase on April 7.
Mr White said it was a only a matter of time before more banks made the move.
"Somebody takes a leap, then the others follow," he said.
