Rising Interest Rates in 2023

The RBA (Reserva Bank of Australia) increased the cash rate by another 25 points to a targeted cash rate of 3.10% this month. This marks the 8th consecutive month that the RBA has raised interest rates. 

So what’s to come in 2023? Although we can’t predict the future, we are confident that the RBA will raise the rates at least two times from 0.25 to 0.5%. For context, a rise in 0.25% in interest payments on a $500,000 will roughly increase your repayments by $75 per month. 

The predicted rise in the cash rate by the RBA is due to two main reasons, the high inflation rates and the low unemployment rate. With the current inflation rate at 6.9%, it will take some time before we see inflation fall to target rates of 2 – 3 %.  To read more about the decision to increase the cash rate in dec, click here.

We will continue to see spending within and growth within the Australian economy as the AFR quoted saying, “Student recruitment firms say prospective student leads are at a 12-year high. An unexpected bullish return of students in the first half of 2022, especially since borders did not reopen until last December, is expected to flow on into record enrolments in 2023.” Due to this, it will take a while for inflation to settle down. 

We expect the rates to stay consistent by the middle of 2023 and drop slightly by late 2023. This is, however, dependent on the state of our inflation rate. 

If you need to refinance for lower rates, many lenders currently offer cash back from $2,000 to $6,000. Speak to us early before the next rate rise to put yourself in a better financial position. 
Reach out to us here.