Australian families and homeowners have been told to expect a 'difficult day' with the RBA's forecasted cash rate rise to increase average mortgage payments by at least $43 a month.
The RBA is widely expected to raise the cash rate by as much as half a per cent at the monthly board meeting to address inflation.
“That’s the average outstanding mortgage at the moment for a lot of people on newer mortgages and obviously bigger mortgages this will be a difficult day,” he told Sky News Australia. “You’ll recall that interest rates went up during the election campaign and when they did the Reserve Bank and the market analysts said that would be the first of a number of interest rate rises.
“There are various bets being placed across financial markets but the last numbers I saw were an 80 per cent chance of an increase of 0.4 per cent of the official cash rate that would take the official rate to 0.75,” he told Sky News Australia. The RBA has indicated neutral rates are between two and three per cent which is more than 2.5 per cent higher than the current cash rate so Mr Phillips believes the RBA will continue to raise interest rates until those levels are reached.
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