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Experts are overwhelmingly predicting another interest rate hike when the Reserve Bank of Australia (RBA) meets on Tuesday next week.
This means Aussie homeowners are set to be dealt another blow to their home loan repayments, and marks almost a year since the RBA first began hiking rates in May 2022.
Almost all panellists (93 per cent) believed the cash rate would increase on Tuesday, with the majority (86 per cent) forecasting another increase of 25 basis points – bringing the official rate to 3.60 per cent in March.
Graham Cooke, head of consumer research at Finder, said this was the most dramatic series of rate rises in many homeowners’ lifetimes.
“The rate increases so far have already added around $12,000 per year to the average 30-year mortgage,” Cooke said.
Cooke said lenders were coming up with creative ways to keep customers who had contacted their bank – offering incentives such as cheap broadband or up-front cash.
“In some cases, lenders are offering up to 100-basis-point discounts to prevent existing customers from switching,” Cooke said.
“If you haven’t already, call your lender and ask for a lower rate. If you don’t get it, it might be time to refinance somewhere else.”
How much would another rate rise cost?
In April last year, when the cash rate was at a record-low 0.1 per cent, Aussies were spending, on average, $32,364 per year on their mortgage repayments – or $2,697 per month.
After the rate hike in February, the average Aussie mortgage holder with a variable rate was paying $3,710 per month, or $$44,520 per year. That’s an increase of $12,156 since April 2022.
If the cash rate hits 3.6 per cent in March, the average mortgage holder would be paying $3,808 per month, or $45,696 per year. This is a jump of $1,176 a year from February.
