Sydney’s Mortgage Interest Rates: Impact On Your Profit

Sydney’s Mortgage Interest Rates: Impact On Your Profit – A surprising number of Australians are struggling with their mortgages ahead of Tuesday’s interest rate decision, new research has revealed.

Comparison site Finder showed 40 per cent of Australians – the equivalent of 1.32 million households – could easily miss their mortgage payments in May.

Sydney’s Mortgage Interest Rates: Impact On Your Profit

The data revealed that compared to May 2022, the proportion of people struggling with their mortgage increased by 24 percent, or 792,000 households.

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This comes ahead of the Reserve Bank of Australia’s interest rate decision, with Finder experts predicting a further rise.

“With 11 rate increases in the last 12 months and the possibility of another one or two on the horizon, millions of mortgage borrowers are at the end of their tether,” he said.

“Two-fifths of troubled mortgage holders are at the highest level we have seen in four years and further rate rises are likely.”

According to Finder’s research, mortgage stress was more common among women; While 47 percent of women had difficulty paying their mortgages in May, this rate was 32 percent for men.

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SQM Research CEO Louis Christopher also discussed the worrying impact of another interest rate hike due to rising house prices in Sydney.

The reality for mortgage holders comes a day before the Reserve Bank of Australia’s interest rate decision.

“If the cash rate rises to 4 per cent, we think it will be a real problem for most existing home borrowers and the number of distressed listings is likely to increase,” he told The Daily Telegraph.

“We are very close to the crisis point where a fire sale will occur. Buyers should be careful because the interest rate story is not yet complete.” Interest rates have risen again, but how much higher will they rise? Here are three predictions As Australians continue to battle inflation and rising costs of living, the Reserve Bank of Australia announced its interest rate decision in June.

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Mortgage holders will face higher payments after the central bank increased the official interest rate on Tuesday. Source: AAP / Bianca De Marchi

Mortgage holders across Australia are facing new payment difficulties after the Reserve Bank of Australia (RBA) decided to increase interest rates.

Following its June meeting on Tuesday, the RBA announced that the cash rate would increase by 0.25 percentage points, from 3.85 percent to 4.10 percent.

The RBA is trying to reduce inflation to its target range of 2-3 per cent by raising interest rates.

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Inflation was 7 per cent in the March quarter. RBA Governor Philip Lowe said that although it had passed the peak, it was still too high.

“It will take some time to get back to the target range,” he said Tuesday.

“This further increase in interest rates provides greater confidence that inflation will return to its target within a reasonable time frame.”

Lowe predicts interest rates will rise further, warning that “further tightening of monetary policy may be necessary to ensure that inflation returns to its target within a reasonable timeframe, but this will depend on how the economy and inflation develop.” “.

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NAB projects that this rate will peak at 4.10 percent in July 2024 and then fall to 3.10 in July 2024.

ANZ forecasts a high of 4.35 percent in August then falling to 4.10 percent in November 2024

Deutsche Bank foresees further increases in the coming months and expects rates to reach 4.6 percent in September.

“In the statement released alongside the Central Bank’s decisions, they said monetary policy may need to be tighter to ensure inflation returns to target within a reasonable period of time,” he told the ABC.

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“In their statement today, they (the RBA) stated that the upside risk to inflation has increased, meaning inflation will return to normal levels by mid-2025, but even then there is a risk that inflation will fall. “. too tall. “It has increased compared to the last time they met.”

Last month’s rate hike follows a pause in April when the RBA acknowledged the impact of cash rate rises on the economy.

In April 2022, Australia’s policy rate was at a record low of 0.1 per cent, but in May 2022 the RBA began a series of rate hikes to reduce inflation.

Finance Minister Jim Chalmers said many Australians found the RBA’s latest rate hike “difficult to understand and difficult to cope with”. Source: AAP / LUKAS COCH / AAPIMAGE

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“The Central Bank makes these decisions independently and, as you know, I do my best not to second-guess these decisions,” Chalmers said at a news conference following the RBA decision.

“I expect there will be many Australians who will find it difficult to understand and accept this decision.”

Opposition Treasury spokesman Angus Taylor blamed the Albanian government for the rate hike, even though Lowe told the Senate in May that the latest federal budget “had no impact on our prospects for the economy or interest rates”.

Learn more The RBA raised the cash rate again. Should banks pass this on to their customers?

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“This is the result of a cocktail of Labor policies – fiscal policy, energy policy, industrial relations policy – coming together to fuel the fire of inflation,” Taylor told reporters. saying.

Westpac was the first of the big four banks to react to the RBA’s latest increase, announcing on Tuesday afternoon that it would pass on the full 0.25 per cent increase to new and existing customers with variable rate home loans from 20 December. June.

Westpac chief executive Chris de Bruin said: “The vast majority of our customers are doing well, but we know the situation is getting more difficult with every change in the exchange rate.” saying.

“We are reaching out to some of our customers who may need additional support… We are here to help our customers who are experiencing financial difficulties and encourage them to call us as soon as possible if they are concerned.”

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