The Reserve Bank of Australia have increased the cash rate for the 9th consecutive month since May 2022. The increase of 0.25% brings the new cash rate to 3.35%, the highest cash rate in seven years.

For those home owners currently on a variable home loan rate, you can expect the banks to follow with another interest rate increase in the coming weeks. This latest increase will see home owners, with an average loan size of $500,000, paying an extra $908 a month since the start of the hikes last May.

Inflation in Australia is the highest it has been since the early 1990s and is expected to peak later this year and then decline back towards the 2 – 3%. In a statement from the RBA today, Governor Phillip Low said “The Board expects that further increases in interest rates will be needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary. In assessing how much further interest rates need to increase, the Board will be paying close attention to developments in the global economy, trends in household spending and the outlook for inflation and the labour market.”

The announcement also means Australia continues to be on track for a fall in national house prices of up to 10% by the end of the year, a forecast made by PropTrack based on the cash rate increase in December 2022.

Average national home prices are already down by 8.9% from their high in April last year, the biggest and quickest fall over a nine month period recorded by CoreLogic, with data dating back to 1980.

With expectations that the cash rate will continue to increase over the coming months, now is the time to speak to a Mortgage Broker about your home loan options.

Click here to read the full RBA statement

Contact an Assured Lending Mortgage Broker for more information today

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RBA Increase Cash Rate