It’s not over yet – ANZ ups cash rate call to peak at 4.35%

ANZ’s economic team has today revised its forecasted cash rate peak to 4.35 per cent - the highest of the big four banks predictions – with one rate rise expected in June or July, and another in August.

The bank’s economic team believes its previously forecasted peak of 4.1 percent would not be high enough to bring inflation back into the target range in a “reasonable period of time”. 

If this happens, the average variable owner-occupier who hasn’t negotiated their loan since the hikes began could be paying a rate of 7.11 per cent by mid-August.

Big four banks’ current cash rate forecasts:

• CBA: Cash rate has peaked at 3.85%, with five cuts between Nov 2023 and Aug 2024, to a cash rate of 2.60%.
• Westpac: Cash rate has peaked at 3.85%, with six cuts between Feb 2024 and May 2025, to a cash rate of 2.35%.
• NAB: Peak of 4.10% by Jul 2023, with four cuts between Apr 2024 – Jul 2024, to a cash rate of 3.10%.
• ANZ: Peak of 4.35% by Aug 2023, then one cut in Nov 2024 to a cash rate of 4.10%

What would a cash rate of 4.35% mean for your mortgage?

If the cash rate reaches 4.35 per cent the average borrower with a $500,000 loan could see their repayments rise, in total, by $1,211. 

Impact on monthly mortgage repayments if the cash rate gets to 4.35%

Source: RateCity.com.au. Notes: based on an owner-occupier paying principal and interest with 25 years remaining. Assumes they were on a rate of 2.86% in April 2022, that they have not renegotiated their loan in this time, and that the banks pass on the next two hikes in full.

RateCity.com.au research director, Sally Tindall, said: “Some borrowers’ mortgage rates could soon start with a ‘7’ if ANZ’s cash rate forecast is realised.”

“That’s not something many Australians would have thought possible even just a few months ago, but it’s a reality we could soon face before winter’s out,” she said.

“If you’ve got a mortgage, call your bank and ask what your monthly repayment would be if the cash rate hits 4.35 per cent.”

“Whatever the number, try and start paying that amount now. It will either give you confidence you can tackle the next few months head on, or act as an early warning to make changes while you still have time,” she said.

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