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.
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