In May, a rise of 0.25 percentage points was made, and each month since when the Reserve Bank of Australia’s (RBA) board has met, a further 0.5 percentage point increase has been made, creating a sharp rise in the amount homeowners have to pay on their home loans.
Interest rate increases so far in 2022. Source: SBS News
How much will the cash rate rise in October?
Core inflation is sitting at 4.9 per cent – still well above the RBA’s target range of two to three per cent.
How much more are mortgage holders paying since rates started rising?
Financial product comparison website RateCity estimated those with a $500,000 mortgage were already paying more than $600 a month extra since April for home loan repayments.
If rates go up by 0.25 per cent on Tuesday, the total increase between May and October will be 2.5 percentage points. Source: SBS News
RateCity estimates a 0.5 per cent interest rate increase will mean these people will have to set aside about another $150 a month for their mortgage, an increase of about $760 in total since May.
RateCity estimates the average person’s maximum borrowing capacity has dropped by approximately 20 per cent, or $134,500, as a result of the recent interest rate rises.