It was no surprise that all major banks jumped at the chance to increase rates in full as the RBA's first rise in over eleven years came to life. The Reserve Bank's cash rate increase of 25 basis points from historic lows of 0.10 per cent to 0.35 per cent is the first-rate rise since November 2010 and the beginning of many more to come.

 

 

Big-bank-variable-mortgage

 

 

On an average $500,000 mortgage and 25 years left, you'll pay around $65 more each month

 

Calculate your payments and plan with a few minutes on MoneySmart.Gov with a few clicks, you can see how much your costs will be. Based on interest rates, length of the loan, payment frequency and a great tool to see how much you can save if you can afford to pay more than the minimum.

 

 

Home Loan Mortgage Calculator

See how much extra you will be paying

 

 

There was the hope of a hold-out till after the election when official wage growth figures are out in June, but as Dr Phillip Lowe (RBA Governor) stated, "Inflation has picked up more quickly, and to a higher level, than was expected. There is also evidence that wages growth is picking up."

 

 

The hope was that the increases would only come through when the wages numbers were out, but "Given this, and the very low level of interest rates, it is appropriate to start the process of normalising monetary conditions." Dr Lowe continued.

 

 

Once before, the RBA upped our rates just before a federal election, and that was Kevin 07 taking out John Howard and his amazing eyebrows

 

Can Albo take Scotty from marketing and send him to a top position at Hillsong. The "Where the bloody hell are ya, Scotty?" memes will be in vast supply. Or can Scotty pull off another miracle while Tanya Plibersek takes over as the new leader of the opposition?

 

Depending on which bank you're with, expect your increase to kick in from the 13th of May (NAB & ANZ) onwards, CBA a week later on the 20th

 

Inbox filled with impending doom? Check with your lender to confirm when payments go up.

 

 

If this is your first time and many have never seen an increase in their mortgage payments, 11 years is a long time and probably something we will never see again.

 

 

Buckle up; it's not fun – Anyone with a mortgage before 2011 will offer a frank assessment that you're in for a bumpy ride

 

 

Add current housing conditions, Covid and flood repairs, almost non-existent rental availability, and then petrol, grocery, and general living costs go up across the board. All we can say is get ready and arm ourselves with as many solutions as possible.

 

 

The PM just mentioned that most mortgagees are ahead by close to two years (Covid is on to year 3), and the banks are profiteering no matter how you look. Financial advisors and advocates are screaming that up to 20 per cent of mortgages are held by financially insecure owners living month to a month already – add in all the current issues atop new raises, and many may go under and fast.

 

 

We won't know what help is available until after the election, so tighten those purse strings – it's going to be tough.

 

 

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 Until next time and thanks for yours!

 

 

Sam Bloch

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Sam Bloch

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