By Karina Barrymore - The Advertiser
- Experts expect the Reserve Bank to hike
- Cash rate would become 4 per cent
- Extra $44 a month on a $300k mortgage
- Taxpayer jackpot: $1bn lottery sale
BATTLING home owners could be paying almost $50 a month extra on the average mortgage if interest rates go up today.
Experts expect the Reserve Bank will raise rates by 0.25 percentage points when it makes its statement in Sydney at 2.30pm today.
They say a rate rise will shut many potential buyers out of the s property market.
With the median price forecast to reach $650,000 by the end of the year, experts say the dream of home ownership has all but ended for most average-income workers.
A rise of 25 basis points will add just under $50 a month in repayments to a $300,000 mortgage.
Some forecasts predict mortgage-holders will be paying 43 per cent of their income to cover repayments by the end of the year.
Economist Saul Eslake said there was no reason to think prices would dip.
And property monitor RP Data expect investors to move into the market and sustain prices as first home buyers retreat.
Research company InfoChoice found 274 out of 338 mortgages that it regularly monitors went up by more than the official 25 basis-point increase, as the majority of banks and lenders added an extra sting for their home-loan customers.
Investors on the Australian futures market say there is a 40 per cent chance of another quarter of a per cent, 25 basis-point rise, taking the official rate to 4 per cent.
Of a survey of 16 economists, 11 put their money on a rise, saying lower-than-expected unemployment figures and increasing private-sector spending are setting the scene for higher inflation – an outcome the RBA board intends to quash by raising rates.
