The Reserve Bank of Australia is signalling that the first rise in official interest rates in 11 years could be sooner than expected, saying a lift in the cash rate “could be warranted” in 2023 – if wages growth and inflation are higher than its base case.
With the re-opening of the NSW and Victorian economies likely to drive a surge in demand, pushing inflation higher, some commentators are expecting rates to rise as early as next year.The cash rate is a major factor in lenders’ pricing of their variable-rate mortgages. These low rates have helped fuel a massive rise in house prices and the size of mortgages.
The last time the RBA increased the cash rate was in November 2010 – a 0.25 percentage point hike to 4.75 per cent. The cash rate has been on its way down ever since, hitting a record low 0.1 per cent in November last year. RateCity’s analysis shows that, even though buyers are now taking on much more debt, the lower variable-mortgage rates mean mortgage repayments for a new buyer in Sydney are only 18 per cent higher, compared to the repayments for someone buying in Sydney 11 years ago.In Melbourne, mortgage repayments for a new buyer are actually 6 per cent less than 11 years ago.
jcollett_money Yes... use some of that extra/spare money you have just lying around doing nothing! 🤔🤦♂️