“The Reserve Bank keeps reminding us that its cash rate decisions are all based on the data, and the December quarter inflation increase of 1.9 per cent, and annual rate 7.8 per cent won’t be enough to change the Bank’s course,” he said.“Australia’s cash rate is 3.10 per cent after a record run-up, yet it’s still well below the historical average of 4.6 per cent.”
He said this would bring the average variable rate for existing borrowers as high as 7.48 per cent “and make many mortgage holders nervous.” Research shows the repayments on a $500,000 loan over 30 years would jump to about $3,490 a month on a 7.48 per cent interest rate for borrowers paying principal and interest.The Canstar analysis shows that even if record high rates from the early 1990s were excluded, the adjusted average rate would still be well above the current rate at 4.1 per cent.
“Before 2009, the cash rate had never been below 4.25 per cent, and it only hit subsequent lows in response to the Global Financial Crisis,” he said.He said while the RBA may take their foot off the pedal as recession fears grow stronger, any pause in hikes would likely be temporary.Deutsche Bank has predicted four rate rises“By now a borrower with a $500,000 loan has seen their repayment go up on average by $888 since April 2022 to now be paying $2,991 per month.
Leshgooo