Rba Interest Rate Hike Prediction: RBA Expected to Lift Rates on Tuesday
The rba interest rate hike prediction now centers on Tuesday, when the Reserve Bank of Australia is expected to lift rates again as inflation reaches 4.6 per cent. Homeowners with large mortgages are already looking for certainty as borrowing costs rise and more rate increases are expected this year.
Marcos Meneguzz and mortgage certainty
Marcos Meneguzz, a CommBank executive, said borrowers are seeking certainty in their household budgets in the face of so much global uncertainty and the expectation of more rate rises this year. He also said: “Often it’s not just about where rates are today, but how comfortable borrowers feel navigating what comes next.”
Meneguzz added: “When there’s uncertainty around interest rates, people often take a step back and look at the structure of their home loan – not just the rate itself, but how it works for them day to day.” He said: “In a higher cost-of-living environment, predictability and flexibility can become just as important as the headline number.”
Commonwealth Bank search trends
Commonwealth Bank said online search interest in fixed rate loans was up more than 250 per cent in March compared with the same time last year. The bank also said variable home loans accounted for about 99 per cent of new lending in its most recent half, even as more borrowers tried to understand fixed rate options and how they compare with variable loans.
Shane Oliver from AMP said, “now probably isn’t the best time to be looking at fixing the interest rate on your mortgage.” His view runs against the rush toward fixed rates, even as borrowers search for a way to lock in their payments before another move from the central bank.
Bob Cunneen on spending
Bob Cunneen, MLC senior economist, said: “For those households with mortgages, their pain threshold was already being tested by rising interest rates in February and March.” He added: “The extra 'cost of living' squeeze from both rising consumer prices and mortgage interest rates is likely to weigh heavily on Australian consumer spending over coming months.”
Cunneen also said: “Australia’s economy is at risk of suffering stagflation this year with both inflation and unemployment heading higher.” The Treasurer has warned that the headline inflation figure will get worse before it gets better, leaving borrowers to decide whether to wait for the Tuesday decision or act before lenders adjust again.
