Reserve Bank hikes cash rate to 2.6 per cent, interest rates set to rise
RBA governor Philip Lowe noted on Tuesday that the central bank had increased the cash rate “substantially in a short period of time.”
“Today’s further increase in interest rates will help achieve a more sustainable balance of demand and supply in the Australian economy. This is necessary to bring inflation back down,” he said.
How will mortgage holders be impacted by the rate rise?
Financial product comparison website RateCity estimated those with a $500,000 mortgage were already paying more than $600 a month extra since April for home loan repayments.
Interest rate increases so far in 2022. Source: SBS News
Interest rate rises are also affecting the borrowing capacity of those looking to buy a home.
RateCity estimates the average person’s maximum borrowing capacity has dropped by approximately 20 per cent, or $134,500, as a result of the recent interest rate rises.