RBA Governor Phillip Lowe set to raise interest rates further

Interest rates are expected to rise to their highest level since December 2014, when the Reserve Bank of Australia’s board of directors met on Tuesday.

If the RBA raises rates by half a percentage point, as expected, it will be the fifth month in a row that interest rates will rise and take the case rate to 2.35%.

Such a move by the RBA would likely have significant consequences for Australians with mortgages.

The 0.5% increase could push monthly home loan repayments to $144 for the average variable borrower, assuming banks pass on the full amount.

For the average borrower, that would mean an increase of more than $600 in monthly repayments since May.

The likely decision comes as the Greens called on RBA Governor Phillip Lower at the weekend to suspend interest rates, saying Australians had been ‘misled’ by Mr Lowe when he said rates are unlikely to rise until 2024.

“Hundreds of thousands of people have been driven into massive debt on this basis,” said Greens economic spokesman Nick McKim.

But there has been relief in some quarters of the economy, with a major Australian bank unveiling an interest rate move this week that should benefit new customers.

CommBank has cut its interest rate on supplemental home loans for new borrowers, meaning homeowners could save up to 0.1%.

This is the second time CommBank has cut its variable rate for new customers since rate hikes began in May.

In a statement, CommBank said “we continually review our interest rates to ensure they remain competitive and meet customer needs.”

Read related topics:reserve bank

Comments are closed.