- Home
- Home Loans
- News
- 52% increase to borrowers’ biggest monthly expense: what a rate hike tomorrow will look like
52% increase to borrowers’ biggest monthly expense: what a rate hike tomorrow will look like
A borrower with a $500,000 loan at the start of the hikes could see their biggest monthly expense rise by a total of $1,211 if the cash rate goes to 4.35 per cent tomorrow.
That’s a total increase, across what would be 13 RBA hikes of 52 per cent.
Impact of a 0.25%-point increase
| Loan size at start of hikes | 0.25% increase tomorrow | Total increase – 13 hikes (May 22 – July 23) | Total monthly repayments at 4.35% |
| $500,000 | $77 | $1,211 | $3,546 |
| $750,000 | $115 | $1,816 | $5,319 |
| $1,000,000 | $153 | $2,422 | $7,091 |
It’s not over at 4.35 per cent – at least one further hike expected from three of the big four banks
Westpac, NAB and ANZ are predicting hikes both at tomorrow’s RBA meeting, and again in August, taking the cash rate to 4.60 percent, with CBA the only big four bank expecting just one more hike.
If the rate does increase to 4.60 per cent, borrowers will soon be paying 55 per cent more on their minimum monthly repayments than at the start of the hikes.
Impact on monthly repayments at cash rate of 4.60 per cent by August
| Loan size | Monthly repayments at May 22 | Total monthly repayments at 4.60% | Total increase | % Increase of monthly repayments |
| $500,000 | $2,335 | $3,623 | $1,288 | 55% |
| $750,000 | $3,502 | $5,434 | $1,932 | |
| $1,000,000 | $4,670 | $7,246 | $2,576 |
RateCity.com.au research director, Sally Tindall, said: “There’s no hiding from these numbers. Many borrowers are being stretched to limits they never thought possible when they signed the dotted line on their mortgage contract.”
“The problem is while many households are already in severe financial stress, others are still spending at the shops or stashing extra cash in the bank. These rate hikes are having markedly different impacts around kitchen tables across the country.
“If the RBA continues with its determination to do what it takes to tame inflation, then we could see the cash rate rise to 4.35 per cent.
“However, if the Board is looking for a reason to pause, there’s enough in this month’s data to warrant one.
“If you’ve got a mortgage, plan for not just one, but at least two more rate hikes. If the RBA hits the pause button at its July meeting, it is unlikely to signal the end of the hikes,” she said.
Resources for people in financial stress:
- National Debt Helpline: 1800 007 007
- Good Shepherd no interest loans
- Services Australia Payment and Service Finder
State-based resources:
Compare home loans in Australia
Product database updated 19 Nov, 2024
Share this page
Get updates on the latest financial news and products
By continuing, you agree to the RateCity Privacy Policy, Terms of Use and Disclaimer.
