Reserve Bank unlikely to lift rates in October despite inflation uptick as more households brace for

#mortgage #mortgagecliff #housing #repayments
The Reserve Bank is not expected to raise interest rates at its October meeting if there is a "slight rise" in inflation, but more than half a million households facing the fixed-rate mortgage cliff are being warned to prepare for higher repayments. Key points The rise in August inflation data is unlikely to see RBA hikes next week but could happen by the end of the year A rise in August inflation data is unlikely to see RBA rises next week, but could happen by end of the year RBA analysis and bank data show around 600,000 fixed-rate mortgages will expire by end of 2024 Analysis of RBA and bank data shows nearly 600,000 fixed-rate mortgages will expire by the end of 2024 CoreLogic data shows higher interest rates are impacting short-term resales and listings as borrowers turn to variable loans August inflation data published on Wednesday showed annual consumer prices rose from 4.9 percent to 5.2 percent in the 12 months to July. It is falling core inflation figure that has economists generally expecting the RBA to keep cash rates steady when it meets next Tuesday, although another rate hike is also possible in coming months. Sally Tindall, research director at RateCity.au, said "Anyone with a mortgage should plan for at least one more rate rise because if inflation doesn't improve we could have another rate hike before Christmas." The RBA has repeatedly said future increases in cash rate may be needed to control inflation and the looming threat will affect more than half a million mortgage holders who are fast approaching mortgage cliff, according to analysis of data by RateCity.au. RBA and the big four banks. RateCity.au predicts around 155,000 mortgage holders will hit edge by the end of year, with another 450,000 fixed loan mortgages due to expire in 2024. RateCity.au said more than 1.3 million fixed-rate mortgages have fallen to date, with 590,000 due in 2022 and around 725,000 estimated to fall this year; This means Australia has passed the “half-way point” of the mortgage cliff. “Before COVID, the proportion of people fixing [their mortgage] was around 13 per cent,” said Sally Tindall, research director at RateCity.au. “At its peak it was 46 cent, but when rate increases started it fell to 12 per cent and fell as low as 4 cent, according to ABS data.” Sally Tindall says 1.3 million households have switched to higher, variable rate mortgages since the rate rises began. Increasing signs of mortgage stress Eliza Owen, head of research at property data and analysis firm CoreLogic, said that despite the "slight rise" in the monthly inflation gauge for August, this was "transitory and inflation continues to ease". "What this means in terms of the fixed interest rate gap in the short term is that monthly inflation figures point rising cost of living pressures and it may be harder for people to afford housing due rising food and fuel prices," he said. “The good news is that the inflation