Ninth consecutive interest rate hike looms for mortgage holders

Most economists are predicting an 0.25 per cent increase this afternoon but some believe it could rise by as much as 0.5 per cent, which would bring the cash rate to 3.6 per cent.

With inflation stubbornly high at just under eight per cent, it is unlikely the RBA will break from its trend of raising the cash rate.

If the RBA lists rates by 0.25 per cent, a household with a mortgage of $750,000 will have to find an extra $1400 every year.

The ongoing increases will also continue to have an impact on house value.

In Sydney, Canberra, and Brisbane, it’s expected that anywhere between eight to 11 per cent will be shaved off house prices, compared to between seven and 10 per cent for Melbourne and Hobart.

Commonwealth Bank is forecasting interest rates to peak at 3.5 per cent, but Deutsche Bank economists expect the official cash rate to hit 4.1 per cent by August.

In a market note, Deutsche Bank predicted 25 basis points hikes to occur in February, March, May and August.