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ANZ predicts four more double RBA hikes by November

Liz Seatter avatar
Liz Seatter
- 4 min read
ANZ predicts four more double RBA hikes by November

ANZ has today revised its cash rate forecast, predicting there will be four more 0.50 percentage point hikes in the next four months, taking the cash rate to 3.35 per cent by November.This is a significant increase from ANZ’s economic team, which previously forecast the cash rate would not get to over 3 per cent until early 2024.

Meanwhile CBA updated its forecast last Friday and is predicting a 2.60 per cent cash rate by November.

In its July minutes released today, the RBA said it’s prepared to do what is needed to bring inflation under control. It noted other central banks are acting on inflation, including the U.S. Federal Reserve, which hiked its target range by 0.75 percentage points in June. The European Central Bank is also expected to hike its policy rate for the first time in 11 years when it meets this Thursday.

Big four banks’ RBA cash rate forecasts:

Forecasts july 19 2022

Analysis from RateCity.com.au shows if the cash rate hits 3.35 per cent by November, as now forecast by ANZ, someone with a $500,000 mortgage in May, before the hikes began, could see their monthly repayments rise by $909 in the space of seven months.

For someone with a $1 million mortgage, monthly repayments could rise by a total of $1,818.

ANZ forecast: Impact of 3.35% cash rate by November

Note: Calculations are based over 25 years.

19.07.22 updated anz forecast

Source: RateCity.com.au. Based on an owner-occupier paying principal and interest with 25 years remaining. Starting rate is the RBA average existing owner-occupier variable rate of 2.86% in May.

How Australia’s inflation and cash rate compares to other countries

World cash rates July 2022

RateCity.com.au research director, Sally Tindall, said: “While the jury is still out on exactly where the cash rate will land by Christmas, borrowers need to brace for significantly more rate pain.”

“ANZ now believes the cash rate could hit 3.35 per cent by November – that would be a rise of 3.25 percentage points in the space of seven months,” she said

“With central banks hiking official rates around the world, it’s difficult to see the RBA doing anything less than a double hike in August.

“Borrowers knew rate hikes were coming but the size and pace of them has shocked households.

“Many families are already under the pump with skyrocketing grocery and petrol costs. Hefty increases to mortgage repayments, on top of this, could tip some into the red.

“If you don’t think you’ll be able to make the monthly mortgage repayments in the coming months, take action now,” she said.

Tips for people worried about rising monthly mortgage repayments:

  • Don’t panic - keep making your repayments: If you are able to, continue to make your monthly mortgage repayments and take time to see how much of a buffer you have.
  • Haggle for a better rate: If your bank is advertising lower rates on their website for new customers, call them and ask them to match it.
  • Shop around: If your mortgage rate isn’t competitive, you could potentially save thousands by shopping around and refinancing with a lower-cost lender.
  • Tighten your belt: If you are struggling with the higher repayments see how you can make lifestyle changes so that you spend less every single week. That might be fewer dinners out and less takeaway coffees.
  • Review your other bills: Put your regular bills under the microscope to see where you might make changes, such as your energy, phone and internet packages.
  • Push for a pay rise: If you haven’t had a decent wage increase recently, now is the time to chat to ask your boss for a pay rise.
  • Ask for help early: Before you miss a mortgage repayment, call your bank to see what options you have. You can also call a financial counsellor for advice. The National Debt Helpline is: 1800 007 007.

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Product database updated 16 Jun, 2024

This article was reviewed by Data Research Specialist Piyush Pillai before it was published as part of RateCity's Fact Check process.