RBA cash rate raised to 3.85%

As was widely predicted, the Reserve Bank of Australia (RBA) has increased the cash rate by 2.5%, taking it from 3.6% to 3.85%.

The RBA’s is based upon the latest data showing that annual inflation has risen to 3.8% in the past 12 months and is still above the 2-3% range set by the RBA.

The purpose of this rate increase is to ease ongoing price pressures and inflation.

What does this mean for home owners?
As most Lenders are expected to pass this on, it could result in an increase to mortgage repayments for variable rate loans.
For example, if you have a $800,000 variable loan, your repayments may increase by approximately $120 per month.

For fixed rate loans, nothing changes until the end of the fixed term.