Reserve Bank of Australia cash rate increases by 4.3%

Reserve Bank of Australia cash rate increases by 4.3%

Reserve Bank of Australia cash rate increases by 4.3%

The Reserve Bank of Australia (RBA) decided to increase the cash rate to 4.35 percent in order to deal with consistently high levels of inflation after four months of stability at 4.10 percent.

RBA has surprised borrowers by raising the cash rate target of Australia by 25 basis points. The interest rate paid on Exchange Settlement amounts rises by 25 basis points to 4.25%.

Thus, Interest rates have reached their highest level since November 2011. RBA has raised the cash rate to 4.35% in the first hike since June 2023.

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The average Australian borrower with a $500,000 mortgage will pay an extra $76 every month and an extra $210 since interest rates began rising in May 2022.

Borrowers with larger loans such as $1 million must now find an extra $2420 per month than they did 18 months ago. In her first rate hike as RBA governor Michele Bullock stated that the bank must do all possible to bring inflation down in a timely manner.

Governor Michele said in her monetary statement that inflation in Australia has passed its peak. But it remains excessive and is proving to be more persistent than expected a few months ago.

Reserve Bank of Australia cash rate increases by 4.3%

Finder’s head of consumer research, Graham Cooke termed today’s raise a “tough pill to swallow” for many families. Whose budgets were already strained to the breaking point.

Graham added mortgage holders are already under stress and the last thing they needed was another slap from the RBA. That’s a lot of money to be spending on your mortgage especially. Since the cost of practically everything else is rising.

Australians with a $590,000 mortgage will now pay approximately $1,345 more per month than they did in April of last year. According to Finder statistics, the minimum income required to comfortably service a mortgage on average Aussie house is now $182,434. While the minimum income to comfortably service the average Australian house is now $129,731.

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