EVERY major bank predicts four or five interest rate hikes over the next six months

The prediction that will chill every Aussie with a home charge: EVERY major bank predicts four or five interest rate hikes over the NEXT SIX MONTHS

  • All major Australian banks plan multiple interest rate hikes this year
  • Those paying off home loans are set to face a meteoric rise in their mortgage
  • Economists say some may be forced to sell their homes due to ‘economic pain’

All of Australia’s major lenders are forecasting a series of interest rate hikes over the next six months, which will leave anyone paying off a mortgage hundreds of dollars out of pocket every month.

The big four banks are now certain that from June 7, after the federal election, the Reserve Bank of Australia will start raising interest rates from a record low of 0.1%.

Westpac and Commonwealth Bank have both planned five rate hikes before the end of the year while NAB and ANZ are planning four hikes.

The unanimous consensus comes after more than a decade of no interest rate hikes, with the last hike occurring in November 2010.

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All of Australia’s major lenders are forecasting a series of interest rate hikes over the next six months, which will leave anyone paying off a mortgage hundreds of dollars out of pocket every month.

The big banks all have tips from June

COMMONWEALTH: Reserve Bank rate increases to start in June. The cash rate will reach 1.25% by February 2023

WESTPAC: increases from June. The cash rate will reach 2% by June 2023

NAB: first move in June. The spot rate will reach 2.25% by August 2024

ANZ: hikes from June. The cash rate will reach 2% by November 2023 and peak above 3%, but not before 2023

Source: RateCity

“There will be a fairly considerable amount of economic hardship, especially if you’ve purchased recently. It will hurt a lot,’ Geoff Kingston of Macquarie University’s Center for Risk Analytics told Daily Mail Australia.

“Property prices in places like Sydney are already falling to some extent and rate hikes will accelerate that process even further.”

The economist said not only will you pay more, but if you try to sell your home, you might find it’s worth less.

“Some may even have to sell. I wouldn’t want to quantify that. But there will definitely be seizures,” he said.

Huge stimulus payments during the Covid crisis, both in Australia and around the world, have driven up the cost of goods and services.

Headline inflation rose last year in Australia by 3.5%, well above the RBA’s 2-3% target, before Russia invaded Ukraine.

Now RBA Governor Philip Lowe expects cost of living pressures to worsen further as European conflict keeps oil prices high during a period of east coast flooding .

“Ongoing supply-side issues, Russia’s invasion of Ukraine, and strong demand as economies recover from the pandemic are all contributing to upward pressure on prices,” he said. he said in the latest monetary policy decision.

The big four banks are now certain that from June 7, after the federal election, the Reserve Bank of Australia will start raising interest rates which are currently at a record low of 0.1%

The big four banks are now certain that from June 7, after the federal election, the Reserve Bank of Australia will start raising interest rates which are currently at a record low of 0.1%

“Rising prices are putting pressure on household budgets and flooding is causing hardship for many communities.

The skyrocketing cost of living means the RBA has no choice but to raise interest rates or the problem will get worse.

Westpac plans five rate hikes in 2022 that would increase typical mortgage payments by $363 by Christmas, followed by three more hikes next year that would add $616 per month to existing servicing costs by mid-2023.

If Westpac’s prediction came true, a borrower with a 20% mortgage deposit buying an Australian home at the median price of $738,975, based on CoreLogic data, would start paying $363 more per month in refunds by Melbourne Cup Day in November.

Under an existing variable rate of 2.29%, this borrower with a mortgage of $591,180 would now be paying $2,272 per month.

If this 1.15 percentage point increase in the RBA were fully passed on, an increase in floating rates to 3.44% would cause monthly repayments to rise to $2,635.

Further rate increases in 2023 would add 1.9 percentage points to the existing cash rate, and if passed through in full, floating rates would rise to 4.19% and monthly repayments to $2,888, an increase of $616 compared to now.

Westpac, Australia's second largest bank, has updated its forecast for the Reserve Bank to raise interest rates in June, instead of August as previously forecast (pictured is a Sydney bank branch )

Westpac, Australia’s second largest bank, has updated its forecast for the Reserve Bank to raise interest rates in June, instead of August as previously forecast (pictured is a Sydney bank branch )

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