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Our CEO, Stephen Capello, spoke with Kylie and Kev of 1494 2AY on the Reserve Bank of Australia’s anticipated decision to increase the cash rate this month by 0.25%
Our CEO, Stephen Capello, spoke with Kylie and Kev of 1494 2AY on the Reserve Bank of Australia’s anticipated decision to increase the cash rate this month by 0.25%
Stephen comments that the majority of economists expected a .25% rise in the cash rate like last month and that’s exactly what the RBA delivered, taking the cash rate to 2.85%, with the RBA opting against a steeper interest rate hike this month. This makes November the seventh consecutive month that rates have risen.
They chatted about how this increase will undoubtedly harm house holders and homeowners with mortgages, depending on how much they have borrowed. For example, if you have a $500,000 mortgage and that .25% passed on full it would add around $74 a month. When added up collectively since the rate rises began in May it comes to an additional $760 per month and with wages not keeping pace, those with mortgages must scramble to find the necessary funds. With energy prices soaring many mortgage holders are reviewing their sums and many shoppers are going to find that non-discretionary items rise even further, making it very hard to avoid paying more for fuel and food, with latest surveys Indicating that most economists expect it to be worse off this time next year.
Kev asked if their will be any changes to the rise in cash rate or if can we expect this to happen month on month with Stephen responding that there is uncertainty heading into December and next year with their being no indication that this is going to be the last rate rise this year and most banks expecting the cash rate to at least head towards a 3.5% cash rate by mid next year, with expectations of another quarter to half a percent rate rise next month.
Click play below to listen in for more.