Cost of living continues as Reserve Bank hikes interest rates for the third time this year

ABC NEWS (Australia)

There's more cost-of-living pain on the way. The Reserve Bank has today hiked interest rates for the third time this year. The increase of 25 basis points brings the cash rate to four-point-three-five per cent. As a guide, it means if you have an 800,000 mortgage you'll be paying an extra 125-dollars each month. With all three rate hikes since February combined, that's more than 360 dollars a month out-of-pocket. The big four banks have been quick to move all announcing they'll pass on the increase in full and there could be more to come with financial markets forecasting an additional hike in the months ahead.

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00:04The RBA Governor delivering the news many Australians were dreading.

00:08I understand this is a really difficult time for households who are already facing higher fuel prices and other cost

00:13of living pressures.

00:14But we must get on top of inflation now so that it doesn't get away from us.

00:18But others don't see it the same way.

00:21It's not good news for any homeowner or anyone with a mortgage.

00:25If another rise comes up we will be starting to struggle a bit I think.

00:28Michelle Bullock says there was really no choice but to lift interest rates.

00:33People often say to me you must have a better thing than the interest rate. We don't. It's all we

00:37have.

00:38If lenders pass on the rate hike in full, homeowners with a $600,000 mortgage will see their minimum repayment

00:45rise by about $91 a month.

00:47Which means they're now paying $272 more on their home loan since February.

00:52For a million dollar mortgage monthly repayments will increase by $152 or $453 since the RBA began lifting rates this

01:02year.

01:02Kyle Lockwood's budget is already tight and he spends more than half his income on mortgage repayments.

01:08I think I'm going to get to a point where I'll probably start either renting out the spare room or

01:14just living off what little savings I have left.

01:17The Treasurer says government spending is not to blame.

01:20The Australian economy is getting absolutely pummeled by this war in the Middle East and Australians are paying the price

01:27for that.

01:28With today's interest rate rise the Reserve Bank has effectively erased the three interest rate cuts it announced last year.

01:34Unfortunately for those paying off a big mortgage there's a good chance there will be more rate hikes to come.

01:39But I do expect one more cash rate rise this year and probably in August as well.

01:45I think they're much more likely to stay on hold and if the economy is even worse than I'm expecting

01:51then maybe you'll start to see rate cuts.

01:54That would be ideal for borrowers like Kyle, but they're not banking on it.

01:59They have all the time screen Chemtraum.

01:59So they can't go back during that period of justain, but that'll give up a look.

02:00Next, what's your presumably witness?

02:01You could have said to confirm, on comprend levels in practice,

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