The Reserve Bank of Australia (RBA) is leaving mortgage holders guessing on when interest rates will peak and when they are likely to start coming down. | Analysis by jcollett_money
The Reserve Bank of Australia is leaving mortgage holders guessing on when interest rates will peak and when they are likely to start coming down, with the rate-rising cycle having already added $1618 to the monthly minimum repayment on a $1 million mortgage since May.that the central bank is not on a pre-set path and is not ruling out having to make a further 0.5 percentage point increase in the cash rate as it did in each of June, July, August and September, rather than the more usual 0.
The RBA does not meet in January, and there should be enough evidence early next year that inflation is under control without the need to lift rates further; though, there is still the risk of one more 0.25 percentage rise early next year, says AMP chief economist Shane Oliver. ANZ’s and Westpac’s forecast of a peak in the cash rate next year of 3.85 per cent translates to a variable mortgage rate of 6.33 per cent.
Be prepared to haggle with your lender, she says. There is a refinancing boom going on and lenders are keen to retain their home loan customers, she says.
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