Daily London
The maximum amount a person earning the average Australian wage of $104,807 can borrow from the bank will fall by around $12,000 from tomorrow, if the RBA hikes interest rates by 0.25 percentage points, new analysis by Canstar reveals.
The new data has prompted economists at all four major banks to predict a 0.25 percentage point increase in the cash rate to 3.85 per cent.
A second rate hike of 0.25 percentage points is also being forecast by NAB at the next RBA meeting in May.
If that eventuates, an average wage earner’s borrowing power will be reduced by $24,000.
For a couple who both earn the average wage, that figure would be $48,000.
This is based on a person taking out an owner-occupier loan with no other debts, no dependents and minimum expenses.
The forecast rate hike is also casting shadows over mortgage holders’ prospects.
An owner-occupier with a $600,000 mortgage and 25 years remaining on their loan would see their minimum monthly repayments rise by $90, assuming banks pass the hike on to their variable customers.
For those with a $1 million loan, that figure is $150.
“One RBA hike in isolation isn’t going to blow up home buying budgets en masse, but it could push some buyers to the sidelines until they get a clearer idea of just how many hikes might be on the horizon,” Canstar’s insights director Sally Tindall said.
“Growth in property prices could well slow on the back of a return to rate hikes, but it’s unlikely to see prices fall.
“Home buyers should take this as a warning sign that rates could go higher and stay that way for a considerable period of time.”
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