It’s one of the hottest questions at the moment for homeowners and potential buyers – how high will interest rates go? If you’re a current homeowner you’re well aware that the home loan market has been rocked by a series of rate hikes thanks to the efforts of the Reserve Bank of Australia (RBA) as they try to stem inflation. The current cash rate sits at 2.35% (as of 6th September 2022) but how high will it go? Whilst there’s no exact way of knowing what the RBA will decide on, we can refer to the predictions from the economists of the big four banks (ANZ, CBA, NAB & WBC) as a guide:
Bank | Prediction |
ANZ | 3.35% ANZ anticipate a 0.5% increase in October, followed by a 0.25% increase in November and another 0.25% in December taking the cash rate to 3.35%. They believe that in late 2024 the rate will be dropped back to 2.85% |
CBA | 2.85% CBA predict a 0.25% increase in October, followed by a 0.25% increase in November. They then anticipate that by November 2023 the rate will be dropped back to 2.35% |
NAB | 3.10% NAB anticipate by December 2022 the cash rate will reach 3.10% but will be steady for the remaining 2 years (December 2024). |
WBC | 3.60% WBC predict by March 2023 the cash rate will hit 3.60% but a year later March 2024 they anticipate that the rate will decrease to 3.35% followed by a further reduction in June 2024 to 3.10%. |
When the cash rate increases, banks and other lenders generally hike their variable home loan interest rates by the same amount. Therefore, if you’re on a variable loan and the RBA put the cash rate up another 1% then your current interest rate will likely increase by 1%. Whilst there’s no guarantee that the above will occur, it appears that in the short-term rates are going to continue to rise.
If you would like to discuss your interest rate, please call me at any time on 0401 225 713.