Rate rise could wipe 15 per cent from home prices: RBA

A 2 percentage point lift in interest rates could knock 15 per cent off the value of Australian homes, the Reserve Bank has warned while telling people who have taken out huge mortgages over recent years to start bracing for an increase in their repayments.

Economists at the nation’s leading banks expect the RBA to start lifting interests from a record low 0.1 per cent at its June 7 meeting and follow that up with at least three more increases by year’s end. They all think the cash rate will be 2 per cent or higher by December 2023. A full percentage point lift in mortgage rates would add almost $500 a month to the repayments on a $600,000 loan. Taking the cash rate to 3 per cent or more would increase repayments by $1500 a month or $18,000 annually.Campaigning in Victoria, Mr Morrison said there was “no doubt” pressures on the economy had increased but the Coalition was the only party able to handle them.

Mr Albanese, campaigning in South Australia, said the threat of higher interest rates emphasised the need to deliver policies that permanently reduced cost-of-living pressures.“We are being modest at this election, we are not promising to change the world. We are being “Increases in interest rates – which are anticipated by market participants over the next couple of years – would result in higher debt repayments for many households and businesses, but most are well-placed to absorb these,” it said.

Another fifth would face a lift of no more than 20 per cent while a quarter would have to deal with a 30 per cent increase in their monthly repayments.

Great….. let’s get on with it….

Jack them up!

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