Interest rates: How much extra you will pay now after RBA increased official rate to 4.1 per cent
If you’re a homeowner, here’s how much extra you’ll need to find each month after the March interest rate hike.
Borrowers are facing another hit to their hip pockets after the Reserve Bank lifted interest rates by 25 basis points, pushing the official cash rate to 4.1 per cent.
The widely expected move will add between $76 and $91 a month to the average borrower’s repayments.
Combined with February’s increase, households will now need to find an extra $151 to $181 each month, depending on the size of the loan.
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By continuing you agree to our Terms and Privacy Policy.For a family with a $500,000 mortgage on a variable rate of 5.42 per cent, the latest hike will add about $79 a month, or $158 extra when combined with last month’s rise.
Those with larger loans are being hit even harder. A borrower with a $750,000 mortgage will pay an additional $118 a month, bringing the total increase across the two hikes to $237.
At the upper end, a borrower with a $1 million mortgage will now be paying $151 more each month, or $301 extra since February.
The back-to-back rises are forcing many Australians to rethink their budgets as cost-of-living pressures continue to bite.
So where will the extra money come from?
A recent survey by Compare the Market found households are planning to make sacrifices to keep up with repayments, including:
- 22 per cent cutting back on clothing and accessories
- 21 per cent reducing spending on eating out and takeaway
- 19 per cent giving up social activities
- 16 per cent delaying big-ticket purchases
- 15 per cent dipping into savings
Compare the Market’s economic director, David Koch, warned borrowers should brace for more pain ahead.
“That means knowing your rate, and doing some leg work to make sure you’re not paying more than you need to,” he said.
“More than a third of mortgage holders we surveyed don’t even know their rate, which is far too many. If you’re one of them, you could be missing out on better deals without even knowing it.
“Start a conversation with your lender, because there are small steps you can take right now that could make a big difference if rates rise again.”
