The big four banks have wasted no time passing on the latest interest rate hike with Gold Coast households set to feel the pinch again.
The Reserve Bank lifted the official cash rate on Tuesday by 25 basis points to 3.85%.
That will add $100 a month to repayments on a $600,000 mortgage.
The Reserve Bank’s hand was forced after a spike in inflation and a drop in unemployment with RBA Governor Michele Bullock warning inflation is expected to remain high for some time.
“Based on the data we have seen and the conditions here and around the world, the board now thinks it will take longer for inflation to return to target and this is not an acceptable outcome,” Bullock said.
“Now, I know this is not the news that Australians with mortgages want to hear, but it is the right thing for the economy.”
Governor Bullock says while she feels for mortgage holders, she warned the consequences of inflation remaining high would be worse for everyone.
“What’s also not great for them or for anyone else is if inflation remains elevated because every time they go to the shop, every time they go to buy their groceries, every time they go to get personal services, medical, if inflation is high, that’s going to keep going up.”
While banks have been slow off the mark to cut rates in the past, there was no such delay in hiking up their rates following yesterday’s announcement.
Commonwealth Bank was first out of the blocks, passing on the full 0.25% increase.
ANZ, NAB and Westpac quickly followed, also passing on the full rate hike.
Economists are divided on whether we can expect more rate rises this year, while markets have factored in an 80% chance of a follow-up hike in May.
But Governor Bullock wouldn’t speculate on future rate movements.
“I don’t dismiss market expectations, but I’m also not driven by them.
“The board will monitor and make its own decisions about what’s appropriate and the market is taking a view on that which is fine, but I won’t basically be driven by the market.”
