MORTGAGE holders will be feeling the squeeze this Christmas with the Reserve Bank of Australia (RBA) delivering another 25 basis point interest rate hike.<\/p>\n
The final interest rate lift for 2022 takes the cash rate to 3.1 per cent – the highest level since 2012 – and marks the eighth hike in a row.<\/p>\n
The RBA has been lifting interest rates since May to tackle rising inflation by increasing the cost of borrowing money to cool demand for goods and services.<\/p>\n
The 0.25 percentage point hike was broadly expected, with evidence of a tight labour market and decent wages growth building the case for one more hike before the end of the year.<\/p>\n
The fact the central bank board does not meet in January also added weight to the December hike as it acts as a natural pause.<\/p>\n
For\u00a0mortgage holders with variable rate loans, the 25 basis point lift will ratchet up their monthly repayments.<\/p>\n
Numbers crunched by RateCity show repayments increasing by $1251 since May for the average $750,000 loan with 25 years remaining.<\/p>\n
RateCity research director Sally Tindall said people should prepare for rates to rise further next year.<\/p>\n
“If you can’t afford these higher repayments, put your budget under the microscope to see where you can make cutbacks,” she said.<\/p>\n