Homeowners face finding another $50 a month to pay the mortgage, with the Reserve Bank tipped to lift official interest rates again today as it battles to dampen house prices and keep inflation pressures at bay.
A quarter percentage point rise this afternoon would mean official rates would have climbed 1.25 percentage points since October, adding more than $240 to the monthly repayments on a $300,000 mortgage.
It would be the biggest run of increases in a 12-month period since the Reserve took the official cash rate from 5 per cent to 6.25 per cent between November 1999 and August 2000.
But the decision could be a close call, with signs of softness in the retail and building sectors lifting expectations the Reserve may wait at least another month before moving in the week before Treasurer Wayne Swan hands down the Federal Budget.
At least mortgage holders may be saved from a “super-sized” lift to their repayments, with the NAB yesterday saying it would not increase its rates more than any move in the official cash rate. Its recent policy of matching rate rises had led to more customers.
That prompted Mr Swan to challenge other major banks to follow NAB’s lead.
TD Securities senior strategist Annette Beacher expects the Reserve board to hold rates today.
But Macquarie Bank rate strategist Rory Robertson said the chance of a rate rise was about 80 per cent.
“Interest rates here remain unusually low, our jobs market is strengthening, China and bulk-commodity prices are booming, so, too, local home prices, and the world’s biggest economy increasingly is getting back on its feet,” he said.
A new survey from Dun and Bradstreet of business executives out today shows sales, growth, employment and capital investment expectations all rising.
Source : www.thewest.com.au
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