Yahoo Finance NAB’s shock interest rate prediction could cost Aussies an extra $2,300
If interest rates hit 4.6 per cent, the average Aussie could be forking out $2,300 more per year.
After the Reserve Bank of Australia (RBA) hiked the cash rate last week for the 12th time in just over a year, NAB has upped its interest rate prediction, saying it could reach as high as 4.6 per cent.
NAB said it believed the RBA would lift the interest rate by 0.25 per cent another two times - once in July and again in August - but did say the “timing is less certain”.
Finder money expert Sarah Megginson told Yahoo Finance, if the RBA were to hike interest rates to 4.6 per cent, Aussies could be forking out thousands more per month.
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“Aussies with an average loan size of $585,000 are already spending over $15,000 more per year on their mortgage compared to what they were in April last year,” Megginson said.
“That’s an additional $1,200 every month – a huge amount of extra money to be forking out on your mortgage. Another two rate rises would add another $2,300 per year to this figure.”
Megginson said it was no wonder Aussies would be feeling frustrated by the ever-increasing cost of living.
“At a time when many companies – including the banks – are reporting record profits, it’s understandable that people are wondering why it’s mortgage-holders who are paying the price for record-high inflation,” she said.
When will the RBA cut interest rates?
NAB said it believed the RBA would start cutting interest rates back towards the “neutral” level of between 2 and 3 per cent, in 2024.
The majority (two-thirds) of experts who participated in Finder’s RBA Cash Rate Survey said the RBA would hold the cash rate next month.
The experts forecasted a slow decline in the cash rate. Almost two in three predicted the cash rate would begin to decrease between November 2023 and April 2024.
Megginson said the easing of cost-of-living pressures couldn’t come soon enough.
“The only silver lining on this very grim, grey cloud is that what comes up must come down again. Although rates are now sky-high, economists are predicting that they will come down again in 2024 and 2025, so hopefully this pain won’t last for too long.”
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