Rate rise looming: homeowners urged to act now

WITH THE UFINANCIAL TEAM

With inflation stubbornly above target and global pressures mounting, economists are tipping the Reserve Bank of Australia (RBA) could lift the cash rate again at its 17 March board meeting – and local homeowners are being urged to review their mortgages before it’s too late.

The RBA raised the cash rate to 3.85 per cent in February, and the latest ABS data suggests the pressure isn’t letting up. Headline CPI held at 3.8 per cent in January, while trimmed mean inflation – the RBA’s preferred measure – edged up to 3.4 per cent.

Both remain well above the RBA’s 2–3 per cent target band, with housing costs rising 6.8 per cent annually and electricity surging 32.2 per cent over the year.

The electricity bill sting that hasn’t fully hit yet

Government energy rebates have now expired, meaning the true cost of electricity is only beginning to flow through household budgets – and through the official data.

Commonwealth Bank senior economist Trent Saunders noted electricity was the largest single contributor to January’s inflation spike, warning “significant swings” in volatile categories will keep the RBA’s attention firmly on price pressures.

Future CPI readings are likely to show this impact growing, signalling that inflation could continue rising before it falls.

Global tensions adding fuel to the fire

The US-Iran conflict has sent global oil markets into sharp volatility, with crude prices surging and analysts warning Australian petrol prices could rise by up to 10 per cent.

If the conflict is prolonged, higher fuel costs will flow through to transport, groceries and everyday services, feeding directly into the inflation measures the RBA uses to set rates.

What this means for your mortgage

CBA, NAB and Westpac are all forecasting a further rate rise in May, taking the cash rate to 4.10 per cent.

For a $600,000 mortgage, each 0.25 per cent hike adds roughly $95 per month to repayments – real money for families already stretched by rising bills.

The good news is that competitive refinancing options exist right now.

Many Torquay homeowners are still on rates that haven’t been reviewed in years and lenders are actively offering better deals to new borrowers.

UFinancial mortgage broker Paul Nelson works with homeowners across the Surf Coast and can help you assess whether refinancing makes sense for your situation before the next rate decision hits.

Contact Paul Nelson and the UFinancial team today on 03 9686 9087 for a no-obligation home loan review.

This article is general in nature and does not constitute financial advice.

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