While none of the economists recently surveyed expect a change to interest rates when the RBA meets next Tuesday, the majority are predicting cash rate will rise within next 12 months.
This may mean it’s time for property investors to start planning ahead
Finder.com.au surveyed 18 leading experts including all four major banks and the majority of respondents (11 out of 18, or 61%) are forecasting the cash rate to rise within the next 12 months.
Of these 11, six experts state the cash rate could start increasing by the end of this year including AMP, Commonwealth Bank, Commsec, HSBC, St George Bank and Urbis.
Michelle Hutchison, Money Expert at finder.com.au, said:
“With average home loan sizes among the highest we’ve ever seen, it’s a real concern that many borrowers will struggle with bigger interest rates.
“If the cash rate reaches average levels of the past decade of about 5 percent and home loan interest rates follow to an average of about 7 percent, that would cost the average home loan of $318,000 an extra $345 per month or over $4,000 in a year.”