How high will rates go? Here’s what experts think about the RBA cash rate

After over a decade of cutting the cash rate, the Reserve Bank of Australia (RBA) has been increasing rates almost every month since April 2022. Homeowners and would-be borrowers may be nervously wondering how high their home loan rates will go.

The big four banks have all cast their predictions for the next years of cash rate movements. The cash rate started at 0.10% in April 2022. For the average owner-occupier paying a variable rate, your home loan rate could reach 7.11% in 2023.

Following the August cash rate decision to hold at 4.10%, three of the big four banks now suspect that the cash rate has already peaked and may not be increased again over the next two years. Only NAB has tipped another hike may occur in November 2023. The major banks now expect rate cuts could start happening in 2024.

If you are currently on a variable rate home loan, and your lender passes on these rate hikes in full, you may find your home loan repayments become significantly more expensive. If you are still on a fixed rate home loan from the low-rate era, chances are that when your loan term ends you'll be reverted to a much higher interest rate.

Article source: Rate City

Home Loans
Written by Chloe Boswell
10 August, 2023
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