RBA Cash Rate Announcement

The Reserve Bank of Australia (RBA) increased the cash rate a further 50 basis points to 2.35 per cent in the steepest pace of increases since 1994.

Read today’s official statement on the RBA’s website.

The RBA’s decision was in line with economists’ expectations, as global inflation remains high due to pressures such as COVID-related disruptions to supply chains, the war in Ukraine and China's COVID containment measures.

In Australia, domestic issues are also playing a part in driving up inflation to its highest levels since the early 1990s, including strong demand, a tight labour market, capacity constraints in some sectors and recent floods.

The RBA expects inflation to peak later this year, before dropping back to the 2–3 per cent range in 2023.

There are likely to be more cash rate increases on the horizon so it’s important to give your home loan a health check, particularly if you are on a variable rate or a fixed loan that’s ending soon.

The futures market forecasts the official cash rate to peak at 3.75 per cent by mid-2023, which would mean a 51 per cent increase in monthly repayments for the average discount variable rate mortgage holder.

Don’t be complacent. Speak to us about how your mortgage compares to others and whether it still suits your financial situation and goals.

Property market snapshot

Need help understanding what this announcement means for you? Contact us today!