On Cup Day, Tuesday 1st November, the Reserve Bank increased the cash rate for the seventh consecutive month. The 0.25% increase took the cash rate up to 2.85%.
Within days most major lenders had passed this on to borrowers which will result in another increase in mortgage repayments for variable rate loans.
In the Reserve Bank’s statement, Phillip Lowe made it clear that further increases are likely.
“The Board has increased interest rates materially since May,” Lowe says in the statement.
“This has been necessary to establish a more sustainable balance of demand and supply in the Australian economy to help return inflation to target.
“The Board expects to increase interest rates further over the period ahead.
“It is closely monitoring the global economy, household spending and wage and price-setting behaviour.
“The size and timing of future interest rate increases will continue to be determined by the incoming data and the Board’s assessment of the outlook for inflation and the labour market. The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that.”
Steps to take:
- Review your loan account to check what your current repayment is
- Be aware of when your repayment will be adjusted following the rate rise
- Contact us if you would like to clarify/check your repayment amount and to check what your loan repayments could be if rates continue to rise.
- Review your household budget to ensure you can manage your higher loan repayment
Please do not hesitate to contact us to discuss your rate and home loan repayment. We’re here to help.
