The Reserve Bank of Australia (RBA) has increased interest rates by 0.25 per cent in a blow to mortgage holders.
It is the second time the RBA has lifted the official cash rate this year.
Official interest rates now sit at 4.10 per cent with lenders expected to quickly pass on the increase.
It’s a huge hit to householders already dealing with rising petrol prices and soaring electricity bills.
“This is a tough blow at a time when Aussie families are already feeling the pinch from a volatile global market,” said Head of Consumer Research at Finder, Graham Cooke.
“Between the rising cost of fuel and now higher mortgage repayments, financial safety nets could be pushed to breaking point.
“The RBA has decided that the risk of runaway inflation is a bigger threat than the immediate strain on budgets.”
Mark Stevenson from Evolve Lending and Finance said a number of factors would have gone in to the RBA’s decision.
“Inflation is still higher than the RBA’s target range and although it does not appear to be running away, the big increase in fuel prices that is a byproduct of the Middle East conflict and its impact on consumers will be of concern to the central bank,” he said.
The interest rate rise will add about $160 a month a $1 million loan, or $118 a month to the average mortgage of $736,000.
Compared to January this year (before the RBA started hiking the cash rate) the average Aussie borrower will have to fork out $2,805 more per year.
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.