{"id":5244,"date":"2023-05-02T15:25:34","date_gmt":"2023-05-02T05:25:34","guid":{"rendered":"https:\/\/financialplus.com.au\/?p=5244"},"modified":"2023-05-02T15:25:34","modified_gmt":"2023-05-02T05:25:34","slug":"homeowners-brace-as-rba-raises-cash-rate-to-3-85","status":"publish","type":"post","link":"https:\/\/financialplus.com.au\/homeowners-brace-as-rba-raises-cash-rate-to-3-85\/","title":{"rendered":"Homeowners brace as RBA raises cash rate to 3.85%"},"content":{"rendered":"

\"\"The Reserve Bank of Australia (RBA) has increased the official cash rate for the 11th time in the past year, taking it to 3.85%. Have we finally reached the peak of this cycle? And how much will this latest rate hike increase your monthly repayments?<\/strong><\/p>\n

In what will undoubtedly be tough news for many households around the country, this latest rate hike comes despite many pundits predicting the RBA would keep the cash rate on hold for at least another month.<\/p>\n

RBA Governor\u00a0Philip Lowe said<\/a>\u00a0while inflation in Australia had passed its peak, at 7% it was still too high and it would take some time before it was back in the target range of 2-3%.<\/p>\n

\u201cGiven the importance of returning inflation to target within a reasonable timeframe, the Board judged that a further increase in interest rates was warranted today,\u201d he said.<\/p>\n

However, in what may come as welcome news to mortgage holders, Governor Lowe softened his language around the possibility of further rate hikes.<\/p>\n

\u201cSome further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will depend upon how the economy and inflation evolve,\u201d\u00a0he said.<\/p>\n

How much could this latest hike increase your mortgage repayments?<\/h3>\n

Unless you\u2019re on a fixed-rate mortgage, the banks will likely follow the RBA\u2019s lead and increase the interest rate on your variable home loan very shortly.<\/p>\n

Let\u2019s say you\u2019re an owner-occupier with a 25-year loan of $500,000 paying principal and interest.<\/p>\n

This month\u2019s 25 basis point increase means your monthly repayments could increase by almost $75 a month. That\u2019s an extra $1,060 a month on your mortgage compared to 3 May 2022.<\/p>\n

If you have a $750,000 loan, repayments will likely increase by about $112 a month, up $1590 from 3 May 2022.<\/p>\n

Meanwhile, a $1 million loan will increase by about $150 a month, up about $2,130 from 3 May 2022.<\/p>\n

What happens if the cash rate increases further?<\/h3>\n

Economists at the big four banks are forecasting that the cash rate will now either remain at 3.85% or have one more hike to 4.10%.<\/p>\n

Assuming you\u2019re an owner-occupier with a 25-year loan, here\u2019s how much more you could be paying each month if the cash rate reaches 4.10%:<\/p>\n

\u2013 $500,000 loan: approximately $75 more = up $1135 from 3 May 2022, to a total of approximately $3,470 per month.<\/p>\n

\u2013 $750,000 loan: approximately $112 more = up $1702 from 3 May 2022, to a total of $5,200 per month.<\/p>\n

\u2013 $1 million loan: approximately $150 more = up $2280 from 3 May 2022, to a total of $6,950 per month.<\/p>\n

Worried about your mortgage? Get in touch<\/h3>\n

There\u2019s no denying that a lot of households around the country are feeling the pain of these rate rises.<\/p>\n

There are also lots of people on fixed-rate home loans wondering just what options will be available to them once their fixed-rate period ends.<\/p>\n

Some options we can help you explore include refinancing (which could involve increasing the length of your loan and decreasing monthly repayments), debt consolidation, or building up a bit of a buffer in an offset account ahead of more rate hikes.<\/p>\n

So if you\u2019re worried about how you might meet your repayments going forward, give us a call today. The earlier we sit down with you and help you make a plan, the better we can help you manage any further rate hikes.<\/p>\n

Disclaimer:<\/strong>\u00a0The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Reserve Bank of Australia (RBA) has increased the official cash rate for the 11th time in the past year, taking it to 3.85%. Have we finally reached the peak of this cycle? And how much will this latest rate hike increase your monthly repayments? In what will undoubtedly be tough news for many households […]<\/p>\n","protected":false},"author":23,"featured_media":5245,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[110],"tags":[],"class_list":{"0":"post-5244","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-home-loans","8":"entry"},"yoast_head":"\nHomeowners brace as RBA raises cash rate to 3.85% · FinancialPlus Mortgage Broker Gold Coast<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/finance-matters.info\/2023\/05\/02\/homeowners-brace-as-rba-raises-cash-rate-to-3-85\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Homeowners brace as RBA raises cash rate to 3.85% · FinancialPlus Mortgage Broker Gold Coast\" \/>\n<meta property=\"og:description\" content=\"The Reserve Bank of Australia (RBA) has increased the official cash rate for the 11th time in the past year, taking it to 3.85%. 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