Interest Rate Rises | What Does This Mean for Your Mortgage?

11 May 2022

As widely predicted and as many of you would have heard over the last week, the Reserve Bank of Australia lifted the official cash rate from 0.1% to 0.35% following their May board meeting. This is the first increase in the cash rate in more than 11 years and is aimed at curbing higher than expected inflation figures currently sitting at 5.1% for the March quarter.

While we believe that this rate rise, and possible future rises have already been accounted for when it comes to current buyers and those embarking on their property journey, existing mortgage holders can expect an increase in repayments on their variable rate loans in line with the following. Please note this is just a guide, so please talk with your bank to discuss your personal situation.

loan rate increase amount

Thank you to our friends at Smartmove Mortgage Advisors for this informative table.

To give perspective, the following image gives us a look back at the history of interest rates since 1992. We have been in the lowest cash rate period ever recorded, and while some people are predicting a big jump in the cash rate over the coming years, in reality it is likely we will return to a pre-covid level of rates and plateau there, which is likely to be within the 3-4% range.

Interest rates 1991-2022

If you or someone you know needs assistance with borrowing or refinancing, please don’t hesitate to contact Simon Orbell, Team Leader & Director – Smartmove on [email protected] or 0403 403 899.