RBA Increase Cash Rate. The Reserve Bank of Australia has increased the cash rate for the first time in 11 years by 25 basis points bringing the new cash rate to 0.35%.
A statement from the Board of Directors noted that “the board judged that now was the right time to begin withdrawing some of the extraordinary monetary support that was put in place to help the Australian economy during the pandemic.” They also confirmed that further increases will be required in the future to ensure that inflation in Australia returns to normal over time.
The cash rate serves as a benchmark for home loan interest rates and when the cash rate changes, lenders tend to follow suit by adjusting variable interest rates. If the 0.25% increase is passed on in full by the banks, a 30 year home loan of $500,000 would incur a monthly repayment increase of $65.
Assured Lending Mortgage Brokers will advise all home loan interest rate changes as the various lenders respond to todays news and keep this page updated over the coming weeks.