RBA decision: Experts split on potential $152-a-month hike
Experts and economists are split down the middle on whether the RBA will hike the cash rate this month.
Whether the Reserve Bank (RBA) will hike the cash rate tomorrow is a point of contention among the experts - with 55 per cent predicting a lift, according to the Finder RBA Cash Rate survey.
If the RBA were to hike rates by the standard 0.25 per cent tomorrow, the official interest rate would hit 4.1 per cent - the highest rate since April 2012.
Finder head of consumer research Graham Cooke said, after last month’s shock increase, there was growing uncertainty on this month’s outcome.
Also read: Shocking mortgage reality 1.3 million Aussie households face
Also read: ‘Every chance’ RBA will hike interest rates again
“Our panel continues to be heavily divided, demonstrating the uncertainty in the market around the RBA’s strategy,” Cooke said.
“Despite the RBA board being heavily criticised due to its unprecedented series of rate hikes, the recent uptick in inflation may be enough to trigger another rate increase.
“Our experts forecast a maximum of two more rate rises this year. After that, the floodwaters should start to subside.”
What would another rate hike cost me?
Another 0.25 per cent rise would mean the average borrower - with a $500,000 loan before the hikes started in May last year - could soon be paying a total of $1,134 more a month, according to data from RateCity.com.au. That’s a 49 per cent increase.
Loan size at start of hikes | 0.25% point increase | Total increase since start of hikes to 4.10% |
$500,000 | $76 | $1,134 |
$750,000 | $114 | $1,701 |
$1 million | $152 | $2,269 |
RateCity research director Sally Tindall said a lot of households were hoping there would be a light at the end of the tunnel sometime soon.
“Borrowers should plan for one, if not two, more rate hikes over the coming months,” Tindall said.
“Call your bank and ask what your repayments would be if the cash rate gets to 4.35 per cent, and start planning out a new budget around these figures.”
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