Another 0.25% rate rise just announced today by the RBA, the official rate is now 3.85% and for a mortgage of $500,000 this adds another $78 to the monthly payment.
This has been a call that many had not anticipated due to the falling inflation rate which went from 7.8% to 7%. The RBA Governor has stated the latest rise was to further curb the inflation rate to bring it back to the 2 - 3% preferrred rate sooner rather than later. How will this affect home budgets, what further cuts can households make to help find those extra dollars?
Are the rises actually doing the right job? Australia is still going ahead with the stage 3 tax cuts that are benefiting mostly the more wealthy, meaning that any rate rise in housing interest rates is going to affect the lower income earners much more than those who have handsome income streams. It may perversely further exacerbate the increase in rental rates, so, further impacting housing affordability for lower income families who do not have the funds to match the rises in rentals that may well be experienced.
