Local mortgage holders have been dealt a huge blow with interest rates increased by 0.25 per cent.
The Reserve Bank of Australia confirmed the rate rise this afternoon.
The official cash rate is now at 3.85 per cent. Banks and lenders are expected to move swiftly to pass on the increases.
It means mortgage holders with a $750,000 mortgage will need to find around $120 a month in additional payments.
Graham Cooke, Head of Consumer Research at Finder, said the RBA is sending a clear signal that the inflation genie isn’t back in the bottle just yet.
“Our research showed mortgage stress on average had started to subside – expect it to rise with a vengeance as monthly payments jump,” he said.
“If inflation persists, expect more of last year’s mortgage stress relief to be wiped away.”
Earlier today, Treasurer Jim Chalmers said a rise in government spending shouldn’t be blamed for higher mortgage payments.
“That uptick in that data was primarily holiday spending, but it was also the withdrawal of the energy rebates,” he told ABC Radio.
“There were some persistent pressures there in housing and there were some weather related factors as well. But overall, we know that inflation is higher than we would like.”
Troy Dodds is Parra News' Managing Editor and Breaking News Reporter. He has more than 20 years experience as a journalist, working with some of Australia’s leading media organisations. In 2023, he was named Editor of the Year at the Mumbrella Publish Awards.