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- Ninth RBA hike a near certainty on back of soaring inflation figures
Ninth RBA hike a near certainty on back of soaring inflation figures
Borrowers will almost certainly face another RBA cash rate hike next month with today’s annual inflation rate clocking in at 7.8 per cent for the December quarter.
If the RBA does increase the cash rate to 3.35 per cent, it would be the ninth rise in as many meetings, taking it to the highest rate since the September 2012 meeting.
How much will another 0.25% point hike cost the average borrower?
RateCity.com.au analysis shows another 0.25 percentage point rise would mean the average borrower with a $500,000 loan before the hikes started in May last year could soon be paying a total of $908 more a month.
0.25% HIKE IN FEBRUARY: Increase in monthly repayments
| Loan size | February increase | Total increase May-Feb |
| $500,000 | $76 | $908 |
| $750,000 | $114 | $1,362 |
| $1 million | $152 | $1,816 |
Source: RateCity.com.au. Based on an owner-occupier paying principal and interest with 25 years remaining. Starting rate is the RBA av. existing owner-occupier variable rate of 2.86% in April and assumes banks pass the hikes on in full.
How many more RBA rate hikes are ahead?
All four big bank economic teams expect the RBA will hike by 0.25 percentage points at February’s meeting, however, the peak of the cash rate still remains a contentious issue:
| Feb RBA mtg | Cash rate peak | Forecasted cuts | |
| CBA | +0.25% to 3.35% | 3.35%, Feb 23 | 2 x 0.25% cuts, end 2023 |
| Westpac | +0.25% to 3.35% | 3.85% May 23 | 4 x 0.25% cuts in 2024 |
| NAB | +0.25% to 3.35% | 3.60% March 23 | None |
| ANZ | +0.25% to 3.35% | 3.85% May 23 | 1 x 0.25% cut Nov 2024 |
RateCity.com.au research director, Sally Tindall, said: “Australia has a serious inflation problem and it’s not going away without a fight.”
“With annual inflation now sitting at 7.8 per cent the RBA has little choice but to serve Australians with yet another cash rate hike,” she said.
“After a break in January, the RBA is unlikely to leave the cash rate on hold for two months in a row.
“Australians are now looking down the barrel of the ninth rate hike since May of last year.
“If this happens, the average borrower with a $500,000 debt at the start of the hikes could be looking at a total increase in their monthly repayments of almost $1,000. Scraping together that much extra each month will be a real test for many families.
“If you have a home loan, don’t stick your head in the sand. Now is the time to review your budget to make sure you can cover these higher repayments before they hit,” she said
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Product database updated 19 Nov, 2024
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