August 03, 2022 by Marvin Coleman
It hurts when interest rates go up - though it's an important measure to get house prices and inflation to come back down.
Interest Rate Rises expected to continue
As you'll know, the RBA yesterday increased the cash rate by another 0.5% to 1.85%. Their reasoning is here. Lenders will pass this on in full. The RBA remain focussed on lowering inflation, so interest rates will continue to rise until then. The market expects further interest rate increases of 1 - 1.5% by the end of this year...so perhaps we'll end the year with a cash rate around 3%.
Market commentators believe the vast majority of borrowers can absorb these rate increases. Right now, I'm more aware of pain from the impact of inflation on my daily purchases... restaurants, groceries and energy bills are noticeably higher, right?!
More about interest rate rises, what might happen next and the effect on house prices in my monthly vlog.
How can we save you some money?
Meegs, George and Amelia in our Oakleigh Client Review team will continue to reach out to all of our clients, improving your mortgage interest rate where they can and discussing any changes of financial circumstances and possible impact on your repayments.
You can always drop Megan or me an email with any questions.
What can you do?
Keep planning for further interest rate increases in your household budgets. Use my Home Loan Repayment Calculator to calculate what your mortgage repayment would be if your interest rate was say 4 or 5...or even 6%.
You could set a personal goal to start saving the difference between that figure and your current repayment. If we're lucky, rates don't go that high and you've created a nice nest egg in the meantime!
Cheers, Marvin Ph 0431 376 008
