The move was widely expected, as the RBA had previously signalled it intended to make several rate rises in the near future, to combat rising inflation.
‘Core’ inflation, which is currently 3.7%, is forecast to reach 4.6% by the December quarter – well above the RBA’s 2-3% target.
Hence, RBA chose to increase the rate by 0.50% to 1.35%. With most lenders expected to pass on the full increase to its customers. However, there’s no need for panic, if you have a variable mortgage and are expecting the repayments to increase there are actions you can take to minimise the effect of the increase.
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