The Relentless RBA Strikes Again!

The Reserve Bank of Australia (RBA) has raised the official cash rate once again! The seventh straight increase in a row entails another 25 basis points and now sees the cash rate sitting at 2.85%.

Back in May the official cash rate was just 0.10%. Just last week on November 1st, it was increased for the seventh straight month in a row to 2.85%. The RBA Governor, Philip Lowe said in a statement that the RBA board expected to increase interest rates even further over the period ahead.

“The size and timing of future interest rate increases will continue to be determined by the incoming data and the Board’s assessment of the outlook for inflation and the labour market,” said Governor Lowe. “The board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.”

When Are the Hikes Expected to Stop and How Much Will This New Rate Rise Increase Your Monthly Mortgage Repayments?

The banks will likely follow the RBA’s lead and increase the interest rate on your variable home loan soon, unless you’re on a fixed rate mortgage.

If for instance, you’re an owner-occupier with a 25-year loan of $500,000 paying principal and interest. This month’s increase of 25 base points will mean your monthly repayments could increase by nearly $75.00 per month. That’s an additional $760.00 on your mortgage in comparison to May 1st.

If you have a $750,000 loan for example, your repayments will likely increase by roughly $110.00 per month, up $1140.00 from May 1st.

Meanwhile, a $1 million loan will increase almost $150.00 per month, up nearly $1,530.00 from May 1st. Crazy right?!

Are you ready for another cash rate increase? It may be time to chat about your options! Learn More

How Many More Rate Hikes Are You Going to See This Year?

The good news is that most economists believe we’re through the bulk of the rate rises, and they could stop as early as December.

Economists from the big four banks are predicting:

  • CommBank – 1 rate rise to go, peaking at 3.10% in December 2022
  • Westpac – 3 rate rises to go, peaking at 3.85% in March 2023
  • NAB – 3 rate rises to go, peaking at 3.60% in March 2023
  • ANZ – 3 rate rises to go, peaking at 3.85% in May 2023

Are you worried about your mortgage? Get in touch

If you’re starting to feel the pinch and you’re worried about what these interest rate rises might mean for your monthly budget, reach out to me for a chat.

Some options we can help you explore include refinancing. This could include debt consolidation, increasing the length of your loan to decrease monthly repayments, or building up a bit of a buffer in an offset account ahead of more rate hikes.

So, if you’re concerned about how you might meet your repayments in the months ahead, give us a call today. We’d love to sit down with you and help you work out a plan moving forward.


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