After four months off, the RBA has raised the cash rate again, this time by 0.25%. The cash rate now sits at 4.35%.
Today the Reserve Bank of Australia (RBA) woke up and chose to rock our reasonably-steady boat (or house)…
Instead of obsessing over the Beckham documentary this month like the rest of us, Michele Bullock and her gang decided to be party poopers and lift the cash rate.
This time, the cash rate has gone up by 0.25% from 4.10% to 4.35%.
The four month streak of good luck for mortgage holders has run out.
Take several seats, Michele.
This rate rise comes after inflation picked up for the September quarter to 1.2%, up from 0.8% in the June quarter.
This has spooked the RBA, especially since expert economists were expecting inflation to be around 1.1%
The biggest contributors to inflation in the September quarter were:
Most experts were predicting one final rate rise in 2023, and now that prediction has come true.
The question now is have we really hit the end of cash rate rises?
Especially since the RBA are determined baddies and it looks like they’re still gunning hard to knock inflation down to their goal of 2-3%.
When the RBA increases the cash rate, the banks will almost always follow suit and raise the interest rate on your loan.
Experts say it takes around two or three months for individuals to feel the full impact of a rate rise on their cash flow… so the impact of these successive rises won’t be felt until the new year.
And your interest rate on your savings account should increase too (but often doesn’t increase to the same extent).
Here’s a breakdown of how rate rises could impact your home loan if you’ve got a variable rate:
You’re not imagining it, they are! But it probably feels even higher because as recently as May 2022, interest rates were at a historic low of 0.1%.
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