RBA hikes rate – again
The official cash rate is now at a decade-long high of 3.85% after the RBA hiked rates again today.
After a brief pause in April, the Reserve Bank of Australia (RBA) increased the official cash rate again today.
The cash rate is now 3.85%, the highest it's been in a decade.
Only 55% of the experts in Finder's RBA cash rate survey predicted today's decision.
This reflects growing uncertainty about how fast the RBA has lifted the cash rate, and comes as inflation is finally starting to slow down.
What this means for borrowers
The fact the RBA has started raising rates again means the fight against inflation is far from over.
Mortgage holders already feeling the pinch of previous rises could be in for further pain, while potential first home buyers could see their borrowing power shrink even further.
While higher rates are good news for savers, inflation has seen almost all of us fall behind in real terms.
What should borrowers do about today's rate rise?
Your lender won't increase your interest rate today. Keep an eye out for a letter or email over the next week or two to confirm your rate rise.
Then you have a few options:
- Do nothing. Rate rises are a fact of life, especially at the moment. And after 11 of them in a year, it's hard to keep on top of. But at the very least you should use a repayment calculator and check how much the rate rise will affect your repayments.
- Check your lender's website. Even though your lender is lifting your rate, there's nothing stopping it offering a better deal to new borrowers. Check to see you're getting the best possible rate from your lender. If not, call up and ask your lender to match.
- Consider refinancing. It's also a good idea to compare interest rates from multiple lenders. If your rate is no longer competitive, refinancing to a new loan could save you a lot of money. You might even be able to score cashback for switching – this can be worth thousands of dollars!