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RBA deals ‘shock’ $15,000 blow to Aussies as interest rates rise again

The RBA hiked interest rates for the 12th time in just over a year.

A composite image of RBA governor Philip Lowe and Australian money.
The RBA has hiked the official interest rate to 4.1 per cent. (Source: AAP / Getty)

The Reserve Bank of Australia (RBA) has delivered another blow to Aussie homeowners, hiking the official interest rate today by 0.25 per cent to 4.1 per cent.

PBA governor Philip Lowe said the increase in the interest rate was necessary to bring inflation back under control.

“High inflation makes life difficult for people and damages the functioning of the economy. It erodes the value of savings, hurts family budgets, makes it harder for businesses to plan and invest, and worsens income inequality,” Lowe said.

“Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will depend upon how the economy and inflation evolve. “

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Hike to come as a shock

Finder head of consumer research Graham Cooke said the decision would have “come as a shock” to many.

“The RBA continues to operate in the dark, as our panel of economists are split on the bank’s intentions,” Cooke said.

“Aussies with an average loan size of $577,000 will be spending over $15,000 more per year on their mortgage compared to what they were in April last year.

“That’s an additional $1,200 every month – a huge amount of extra money to be forking out on your mortgage.”

Average Aussie mortgage repayments

Cash rate

Average home loan rate*

Average monthly repayment

Average monthly increase

Average annual repayment

Average annual increase

April 2022

0.10%

3.45%

$2,575

-

$30,900

-

June 2023(full rate rise applied)

4.10%

7%

$3,839

$1,264

$46,068

$15,168

Will the RBA hike again in July?

More than two-thirds of the experts who took part in the Finder RBA Cash Rate survey believed the RBA would hold the cash rate next month.

Experts forecast 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.

Cooke said the easing of cost-of-living pressures couldn’t come sooner.

“It will be a relief to homeowners and renters to hear that this peak-rate period should not extend beyond the first quarter of 2024,” he said.

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