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How much more will you pay on your mortgage? The impact of July's rate increase
The Reserve Bank of Australia has hiked the cash rate for the third month in a row, lifting it by 0.50 percentage points to 1.35%. So, how much more could you be paying in home loan repayments?
After starting the year with a cash rate of 0.10%, this quick succession of increases to home loan rates could leave homeowners feeling the pinch. If you are repaying a variable rate home loan and your lender has chosen to pass the rate hike on to you, that could mean your home loan interest rate has jumped 1.25% in just three months.
While that percentage may seem small, it can mean an increase of hundreds of dollars in repayments from April 2022 to today. So, how much more could the average home loan customer be paying today?
- Not sure if your lender has hiked rates yet? View the full list and get live updates with our RBA Rate Tracker.
Impact of rate hikes on home loan repayments
RateCity crunched the numbers on different home loan amounts with 25-years remaining, and the impacts of the May, June and July cash rate hikes on the mortgage repayments. The initial interest rate is based on the Reserve Bank of Australia’s average existing customer rate of 2.86% as of April 2022.
$350,000 home loan – impact of rate hikes
| Starting month | Estimated repayment | Increase |
| Apr-22 | $1,634 | |
| May-22 | $1,680 | $45 |
| Jun-22 | $1,772 | $138 |
| Jul-22 | $1,867 | $233 |
$500,000 home loan – impact of rate hikes
| Starting month | Estimated repayment | Increase |
| Apr-22 | $2,335 | |
| May-22 | $2,400 | $65 |
| Jun-22 | $2,532 | $197 |
| Jul-22 | $2,667 | $333 |
$600,000 home loan– impact of rate hikes
| Starting month | Estimated repayment | Increase |
| Apr-22 | $2,802 | |
| May-22 | $2,879 | $78 |
| Jun-22 | $3,038 | $236 |
| Jul-22 | $3,201 | $399 |
$700,000 home loan – impact of rate hikes
| Starting month | Estimated repayment | Increase |
| Apr-22 | $3,269 | |
| May-22 | $3,359 | $91 |
| Jun-22 | $3,544 | $276 |
| Jul-22 | $3,734 | $466 |
$800,000 home loan– impact of rate hikes
| Starting month | Estimated repayment | Increase |
| Apr-22 | $3,736 | |
| May-22 | $3,839 | $104 |
| Jun-22 | $4,051 | $315 |
| Jul-22 | $4,268 | $532 |
$900,000 home loan– impact of rate hikes
| Starting month | Estimated repayment | Increase |
| Apr-22 | $4,203 | |
| May-22 | $4,319 | $117 |
| Jun-22 | $4,557 | $354 |
| Jul-22 | $4,801 | $599 |
$1,000,000 home loan – impact of rate hikes
| Starting month | Estimated repayment | Increase |
| Apr-22 | $4,670 | |
| May-22 | $4,799 | $130 |
| Jun-22 | $5,063 | $394 |
| Jul-22 | $5,335 | $665 |
$1,200,000 home loan– impact of rate hikes
| Starting month | Estimated repayment | Increase |
| Apr-22 | $5,604 | |
| May-22 | $5,759 | $155 |
| Jun-22 | $6,076 | $473 |
| Jul-22 | $6,402 | $798 |
$1,500,000 home loan– impact of rate hikes
| Starting month | Estimated repayment | Increase |
| Apr-22 | $7,004 | |
| May-22 | $7,199 | $194 |
| Jun-22 | $7,595 | $591 |
| Jul-22 | $8,002 | $998 |
$1,700,000 home loan– impact of rate hikes
| Starting month | Estimated repayment | Increase |
| Apr-22 | $7,938 | |
| May-22 | $8,159 | $220 |
| Jun-22 | $8,608 | $670 |
| Jul-22 | $9,069 | $1,131 |
$2,000,000 home loan– impact of rate hikes
| Starting month | Estimated repayment | Increase |
| Apr-22 | $8,405 | |
| May-22 | $8,638 | $233 |
| Jun-22 | $9,114 | $709 |
| Jul-22 | $9,603 | $1,198 |
Source: RateCity.com.au. RBA Lender’s Interest Rates - April 2022
Note: Figures based on different home loan amounts with 25-years remaining. Initial interest rate based on RBA average existing customer rate of 2.86% in April 2022. Factors in 0.25% hike in May, 0.50% hike in June and 0.50% in July. Does not factor in ongoing fees.
Disclaimer
This article is over two years old, last updated on July 6, 2022. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.
Calculate your own higher home loan repayments today
RateCity research shows that homeowners with a $500,000 home loan balance and 25-years remaining could find themselves paying $333 more in July in home loan repayments than they were in April 2022.
When you take into consideration the average mortgage around Australia has continued to grow due to sky-high property prices, particularly in capital cities and regional New South Wales, the impact of these rate hikes may be more severe for your household budget.
For those on million-dollar mortgages, the increase to mortgage repayments is $665 from what you were repaying in April. This is the equivalent of finding the funds for a weekend away with the family or a set of new tires each month from your household budget.
If you’re uncertain about your ability to afford higher mortgage repayments, there are steps you could consider taking today to give your budget some much-needed breathing room. These include:
- Make extra repayments – if your lender allows, this may help chip away at your principal owing and reduce your repayments.
- Use features – if you have access to an offset account or redraw facility, keep in mind that the funds you deposit here can reduce the interest charged on your home loan.
- Ask for a lower rate – If you don’t ask you don’t get. Home loan lenders tend to offer new customers lower rates, so it’s worth looking those up, speaking to your lender and requesting a lower rate.
- Refinance – You could consider giving yourself an interest rate cut by refinancing to a lower-rate home loan lender.
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Product database updated 18 Nov, 2024
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