The Reserve Bank increased official interest rates by 0.25% in the first week of February. This is the 9th consecutive official interest rate increase since May last year and once again, lenders passed the increase on to borrowers.
It begs the question, how close are we to rates peaking? It’s the question all borrowers want the answer to. It is difficult to know.
It is expected by many economists that we’ll get another rate rise in March and the Reserve Bank said in its February statement that “further rises rises will be needed over the months ahead to ensure inflation returns to target.”(1) The Reserve Bank says is will be monitoring economic data closely.
However the case also is building for the Reserve Bank to hold off on further rises to allow time for the impact of rate rises to flow through. More economic data is due before the Reserve Bank meets in March. This will shed light on what to expect and whether we are nearing a pause in more rate rises. It’s important to note, forecasts about rate movements change as economic data becomes available.
We suggest it is wise to err on the side of caution, and plan for more than one more rise. It’s better to be prepared and if rates happen to pause, that’s a bonus.
Contact us at the office on 9429 9775 or email kris@courtfs.com.au if you would like to discuss your rate and home loan repayments.
(1) Reserve Bank Australian Media Release https://www.rba.gov.au/media-releases/2023/mr-23-04.html
Published Feb 24 2023
This article is for provides general information purposes only. It has not taken any individual personal circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. You should should seek qualified advice before making decisions. Please talk to your mortgage broker or Court Financial Services about your specific situation.
