10 interest rate increases in a row, but maybe some light at the end of the tunnel
Most days if I said you were getting 10 out of 10, you’d be pretty pleased with your performance.
But yesterday the Reserve Bank board handed down yet another interest rate rise, for the 10th consecutive meeting. And that was not the scorecard that mortgage holders wanted to hear.
What does it mean when your lender passes this on to you?
- If you have a $500k mortgage, the increase to your monthly payments is now at $983 per month since May 2022.
- For a $750k mortgage, your repayments have increased $1474 per month since May 2022.
- Those with a $1 million debt need to find an extra $2000 per month just to meet their interest payments.
However, this morning at the Financial Review Business Summit, RBA Governor Philip Lowe offered a glimpse of a light at the end of the tunnel, saying:
"We are closer to a pause, it's a matter of logic really – as you increase interest rates higher, you get closer to a point where it is appropriate to stop for a while and just assess the flow of data".
Referencing the slew of interest rate rises handed down by the RBA since last May, Lowe agreed a lot has been done in a short period of time.
There's no doubt that we're in interesting economic times, and over the past few weeks I've had some really interesting conversations on Money News that you might find interesting:
- Ian Henschke, Chief Advocate for National Seniors Australia about the changes to the age pension and the financial pressure pensioners are under.
- Shane Oliver, Chief Economist at AMP Capital about the outlook for interest rates and the economy.
- Tim Reardon, Chief Economist at the Housing Industry Association on the outlook for those building or renovating.
Of course you can always tune in to Money News live 7pm Monday-Thursday on the Nine Radio network, or grab the podcast whenever suits you!