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RBA raises cash rate 50 basis points from 1.35% to 1.85%

by Larissa Andrews
02/08/2022 in News

RBA raises cash rate 50 basis points from 1.35% to 1.85%

The Reserve Bank of Australia has just announced a fourth rate increase yesterday imposing a 50 basis point hike which has landed the official cash rate from 1.35% to 1.85%.

Governor Philip Lowe faced criticism over prior “forward guidance” that indicated cash rates would be staying at record lows till 2024. However the RBA just delivered it’s fourth consecutive rate hike to 1.85%.


Economist and experts warn that a steep rise in interest rates could mean a real risk of recession and believe that inflation should be tackled with a patient approach over a number of years, instead of a series of steep rate hikes within 12 months.

So what does this mean for the Aussie homeowners?

Since early May, the increased cash rate means that on a $500,000 loan, owners can expect to fork over and extra $472 per month on top of their repayments. Some households are tipped to fork out over $700 per month in addition just to stay afloat.

After the third and recent hike last month, experts anticipated the impending increases and the RBA signalled that this may not be the last of the rate hikes we can expect over the coming months.

This rate increase not only compounds the pressures many Aussie homes are facing, such as exorbitant fuel prices and the impact on household budgets as new flood warnings and fresh food prices create more concern.

Treasurer Jim Chalmers acknowledged the challenges faced in the changing economic situation that homeowners are currently at the mercy of. Chalmers stated that a larger proportion of household budgets, which are already spread thin by the rising cost of fuel, groceries, energy and other essentials would be consumed by the increased mortgage repayments.

Unsure if you’re getting the best deal on your home loan?

As rates are expected to increase over the next coming months it’s a smart idea to give your mortgage a health check to ensure you’re getting the sharpest rates on your loan.

If you’re struggling to meet your repayments or looking for a sharper rate on your home loan, get in touch with our team of expert brokers and financial advisors who can help you save thousands in the long run and guide you through the refinancing process.


Need a to crunch numbers? Try our 20+ free online calculators that can help you better assess your financial position. Simply head to our website to use them, no sign ups or hassles!

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** General Advice Warning

The information provided on this website is general in nature only and it does not take into account your personal needs or circumstances into consideration. Before acting on any advice, you should consider whether the information is appropriate to your needs and where appropriate, seek professional advice in relation to legal, financial, taxation, mortgage or other advice.

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Any calculations or estimated savings do not constitute an offer of credit or a credit quote and are only an estimate of what you may be able to achieve based on the accuracy of the information provided. It doesn’t take into account any product features or any applicable fees.

*5.64% Interest rate based on an Owner-Occupied, Principal and Interest, standard variable, minimum loan size of $250,000, maximum LVR of 80%, over a 25-year term. Eligibility is subject to servicing requirements, contact one of our specialised mortgage brokers for more information.

^5.64% Comparison rate based on a loan of $250,000 over a 25-year term. WARNING: The comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Costs such as redraw fees or early repayment fees and cost savings such as fee waivers are not included in the comparison rate but may influence the cost of the loan.

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