The looming prospect of an interest rate hike in November has cast a shadow over the eagerly awaited Melbourne Cup Day festivities, leaving some avid punters in a contemplative mood as they strategize their bets.
As the Reserve Bank of Australia (RBA) gears up for its crucial November 7 meeting, set to be the penultimate rates decision for the year 2023, the impact of two key upcoming data releases is set to be profound.
Specifically, the Australian Bureau of Statistics’ imminent unveiling of the latest job statistics this Thursday, closely followed by the release of September’s quarterly Consumer Price Index (CPI) figures on October 25, are expected to play a pivotal role in the RBA’s decision-making process.
Prior to the release of this data, three out of the four major banks anticipate that the RBA will maintain the official cash rate at 4.10 per cent, with only the economic team of NAB predicting a 0.25 per cent increase.
RateCity.com.au, a comparison website, has conducted an analysis indicating that a rise to 4.35 per cent would result in the average borrower with a $500,000 mortgage, taken out at the onset of the recent series of rate hikes, facing an additional monthly repayment of $76.
This implies that, since the RBA initiated the cash rate hikes in May 2022, their repayments would have risen by $1,210, equating to a 52 percent increase.
Using the same analysis, a borrower who had initially secured a $750,000 mortgage would find themselves paying an additional $114 per month with the expected November increase, amounting to $1,815 over the course of 13 rate hikes. For those who had taken out a $1 million mortgage, the extra monthly cost would be $152.
