Savers are finally getting decent interest rates as the banks look to cover the rising cost of funding mortgages.
When the Reserve Bank of Australia first started hiking interest rates in May, banks were typically quick to pass on higher interest rates to mortgage holders but more reluctant to do the same for savers.
However, RateCity research director Sally Tindall said some banks were now actively chasing savers.
With mortgage funding costs growing due to the rising official cash rate, Ms Tindall said deposits by savers were becoming an increasingly important part of the funding mix.
"That's why the lowest rate home loan providers are now primarily banks, rather than the non-bank lenders we've grown used to," she said.
"The good news is savers are back to being a sought-after commodity after years of lousy returns, but they'll still need to shop around if they want to get the best deals."
Market leaders are now offering interest rates as high as 3.60 per cent for savers.
But Ms Tindall said some banks were still picking and choosing which savings accounts to apply higher interest rates to, or were not lifting rates at all.
All of the big four banks lifted rates by the full 0.50 per cent for variable mortgage customers following the September cash rate decision, but National Australia Bank and ANZ are yet to announce higher interest rates across any of their savings accounts.
Commonwealth Bank and Westpac have so far passed on a higher interest rate to some savings accounts, but not others.
Rising interest rates have also triggered a surge in mortgage refinancing, with July recording the second highest monthly total for refinancing loans on record.
Once the September central bank hike is applied, a home loan under four per cent will be considered a competitive variable rate, according to RateCity, with Gateway Bank currently offering the lowest rate at 3.74 per cent.
Ms Tindall said people were refinancing in droves because many banks were cutting rates for new customers.
Households on fixed rate mortgages were also being forced to refinance as their loans expire, with research by Finder showing nearly $30 billion worth of fixed rate loans will lapse by the end of the year.
Finder head of consumer research Graham Cooke said the end of low-interest fixed rates could force many borrowers into mortgage stress because their repayments could suddenly lift by as much as $600 a month.
Rising interest rates are also putting small businesses under pressure.
Small businesses are struggling to pay their invoices on time, suggesting a wave of insolvencies could be approaching.
Payment defaults have lifted by 53 per cent compared with the same time last year, according to CreditorWatch's index that measures business risk.
Businesses struggling to pay one another is typically a sign of financial stress, with high inflation, rising interest rates, labour shortages and supply-chain disruptions starting to take a toll.
Food and beverage companies saw the sharpest surge in their inability to pay up, followed by the arts and recreation sector and the education and training sector.
CreditorWatch head Patrick Coghlan said the lift in payment defaults was disturbing.
"The multiple challenges confronting many businesses, whether they be rising inflation and interest rates, labour shortages or the ongoing impacts of the COVID pandemic, are all conspiring to make it that much tougher to pay invoices," Mr Coghlan said.
