Whether the latest economic shifts will affect you largely depends on your status as a homeowner and the timing of your property purchase.
According to analysis by Finder, Australians with an average home loan of $736,259 could see their annual mortgage payments increase by $2,657 if the cash rate rises by 25 basis points today.
This projected increase highlights the financial impact compared to what borrowers were paying before the Reserve Bank of Australia (RBA) initiated its series of cash rate hikes earlier this year.
The cash rate is a key interest rate that banks and lenders use when borrowing from each other, and it sets the tone for all other interest rates in the market.
Cash rate is the interest rate that banks pay other banks and lenders, and it influences all other interest rates.
Canstar analysis estimated that a 0.25 percentage point hike today would mean borrowers could pay an extra $91 a month on a $600,000 mortgage.
If the RBA decides to increase the cash rate, it will be the third hike this year, totalling a $272 rise in monthly repayments on a $600,000 mortgage compared to 2025.
Current homeowners would be the most impacted in the short term by an anticipated hike, Canstar’s Sally Tindall says.
Tindall said another hike could be “the straw that breaks the camel’s back” for everyday Aussies.
“For new borrowers, who potentially might not have even been expecting any cash rate rises after last year’s drops, they could have a wake-up call,” she said.
Source: SBS
Australians with a larger mortgage debt will pay more over the lifetime of their mortgage.
A homeowner with $800,000 in debt would pay an additional $363 each month, and those with $1 million in debt would owe $453 more in monthly repayments.
— Cameron Carr, Alexandra Koster
