RBA predicted to raise interest rates again

More pain is being predicted for Australians with a mortgage, with rates expected to rise again when RBA meets this week.

Interest rates are expected to rise to their highest point since December 2014 when the Reserve Bank of Australia board meets on Tuesday.

If the RBA increases rates half a percentage point, as expected, it will be the fifth consecutive month interest rates have increased and take the case rate to 2.35 per cent.

Such a decision by the RBA would likely have significant consequences for Australians with a mortgage.

Interest rates are expected to rise to their highest point since December 2014.

The 0.5 per cent increase could see monthly repayments on a home loan jump to $144 for the average variable borrower, assuming the banks pass on the full amount.

For the average borrower, it would mean an increase of more than $600 to monthly repayments since May.

The likely decision comes as the Greens over the weekend called for RBA Governor Phillip Lower to put interest rates on hold, saying Australians had been “misled” by Mr Lowe when he said rates were unlikely to rise until 2024.

If the interest rates rise, it will be the fifth consecutive month interest rates have increased.

“Hundreds of thousands of people were induced into taking massive debts on that basis,” Greens economics spokesman Nick McKim said.

But there was relief in some quarters of the economy, with a major Australian bank unveiling an interest rate move this week set to benefit new customers.

CommBank slashed its extra houses loan interest rate for new borrowers, meaning owner-occupiers could save as much as 0.1 per cent.

It’s the second time CommBank has reduced its variable rate for new customers since rate hikes began in May.

In a statement, CommBank said “we continually review our interest rates to ensure they remain competitive and meet customer needs.”