Home News Reserve Bank of Australia hikes cash rate for third consecutive month in fresh blow to mortgage holders

Reserve Bank of Australia hikes cash rate for third consecutive month in fresh blow to mortgage holders

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The Reserve Bank of Australia Raised the cash rate for 3 consecutive months.

Interest rates on Tuesday were raised by 50 basis points, or 0.5 percent. This means that the official cash rate is currently 1.35%.

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Degree of interest The pandemic has significantly reduced it to a record low of 0.1%.

The RBA first raised its cash rate by 25 basis points in May, then doubled in June, raising it by 50 basis points.

Prior to Tuesday’s announcement, the cash rate was 0.85 percent.

The reserve bank has made an interest rate decision. credit: AAP

Treasury Minister Jim Charmers said the announcement was “very challenging news for hard-working Australians who are already in a difficult situation.”

“Mortgage repayments have run out of most of the budget that has already been extended,” he said.

“The average homeowner who pays $ 330,000 needs to find another $ 90 a month while keeping up with the cost of petrol, electricity, groceries and other necessities.

“For Australians with a $ 500,000 mortgage, the additional repayment seems to be $ 137 a month.

“Rates are expected to rise and are expected to bite.”

Floating rate mortgage holders will worsen by hundreds of dollars following Tuesday’s decision, finder on the comparison site said.

Graham Cook, Head of Consumer Research at Finder, plans for when some fixed-rate homeowners will not be immediately affected, but mortgage repayments will inevitably increase. He said he should stand.

“The average homeowner who doesn’t pay a fixed fee will have $ 424 more monthly repayments compared to what he was paying in April of this year,” he said.

“If you have a fixed rate, check it out now to see if your monthly repayments could spike.

“If you’re not ready, a fixed mortgage can be a time bomb.”

RBA Governor Philip Lowe. credit: AAP

Prime Minister Anthony Albanese was asked what kind of support he was providing to people shortly before the announcement.

“We already know that the measures we supported that affect low- and middle-income earners came into effect on July 1,” he said.

Raise full-time workers with minimum or low wage rewards Effective At the beginning of a new fiscal year.

Last month’s Fair Labor Relations Commission brought up a 5.2% increase. That’s about $ 40 a week.

RBA Governor Philip Lowe said Australians should expect further increases.

“The world’s inflation rate is high,” he said in a statement.

“This is driven by COVID-related turmoil in the supply chain, the war in Ukraine, and strong demand putting pressure on capacity.

“Global monetary policy has responded to this high inflation, but it will take some time before inflation returns to its target in most countries.”

File: This change means that mortgage holders will pay more at floating rates. credit: Getty Images

He said Australia’s inflation rate is as high as 5.1%, but not as high as in other regions.

“Most of Australia’s inflation growth is due to global factors, but domestic factors are also having an impact,” said Rowe.

“Strong demand, tight labor markets, and capacity constraints in some sectors contribute to upward pressure on prices. Floods are also affecting some prices.

“Inflation peaks later this year and is projected to fall towards the 2-3 percent range next year, even at high levels as global supply-side problems continue to ease and commodity prices stabilize. Even so, inflation is expected to ease.

“Higher interest rates also help establish a more sustainable balance between supply and demand for goods and services. Medium-term inflation expectations are still firmly fixed and it is important that this is the case. . “

The updated inflation rate will be announced by the Australian Bureau of Statistics later this month.

According to the mortgage interest rate change calculator MozoA person with a $ 500,000 mortgage will pay $ 133 more per month if the floating rate changes from 3.11% to 3.61% following a 0.5% rise.

If you have a $ 600,000 mortgage, you will pay $ 159 more per month.

If you have a $ 750,000 mortgage, you will pay $ 199 more per month.

If you have a $ 1 million mortgage, you will pay $ 265 more per month.

Click to calculate the exact change in interest rates here..

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