Yahoo Finance RBA could deliver another $152 blow to Aussies
Almost half of experts expect another RBA rate hike this year.
The Reserve Bank of Australia (RBA) is widely expected to hold the cash rate when it meets next week, but that doesn’t mean the pain is over for Aussies with a mortgage.
Nearly half (42 per cent) of experts and economists who weighed in on this month’s Finder Cash Rate Survey are expecting another rate rise before the end of this year.
The majority believe the cash rate will peak at either 4.35 per cent or 4.60 per cent - which means there could be at least one more 0.25 per cent hike.
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The good news? All 38 panellists believe the RBA will hold the cash rate steady at 4.10 per cent on Tuesday.
Graham Cooke, head of consumer research at Finder, said it was the first time this year every expert was predicting a hold.
“Another rate hold will be welcome news to the many homeowners who are already at the end of their tether,” Cooke said.
“Our data shows that many households are at breaking point – 36 per cent of mortgage holders struggled to pay their home loan in September.”
AMP chief economist Shane Oliver said the RBA was likely to hold rates in October, citing the continued slowing in household spending, the softening jobs market and inflation still trending lower despite the uptick in August.
“While it’s not our base case, the risk of another rate hike by year end remains high though, given the increasing signs of wages growth pushing beyond levels consistent with 2-3 per cent inflation,” Oliver said.
What would another rate hike mean?
If the cash rate rises to 4.35 per cent, the average mortgage holder with a $500,000 loan would pay an extra $76 a month. That’s a total of $1,210 a month extra compared to when the rate hikes started in May last year, RateCity found.
Loan size at start of hikes | Increase of 0.25% | Total increase to 4.35% |
$500,000 | $76 | $1,210 |
$750,000 | $114 | $1,815 |
$1 million | $152 | $2,421 |
Source: RateCity
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