Ratecity, a comparison site, says monthly payments for a $500,000 25-year mortgage are up $834 from May and $1,251 for a $750,000 mortgage.
Corelogic commented that loan applications were down nearly 18 percent and annual property sales were down 13 percent. Consumer sentiment has also deteriorated.
AMP Chef Economist Shane Oliver said: “All in all, we consider the RBA is at or near the highest of the stakes. Our baseline scenario is that we at the moment are at the highest, although there’s a high risk of 1 final rate hike of 0.25% to three.35% early next yr. We expect that early next yr, a mixture of a pointy slowdown in domestic demand, increasing signs that inflation has peaked and sharply weaker global growth, which in turn may also result in lower inflation, will enable the RBA to maintain rates of interest unchanged for an prolonged period. We expect the RBA to begin cutting rates of interest late next yr or early 2024.
“Our view stays below economists’ consensus – which sees the money rate peak at 3.55% next June – and the cash market consensus – which sees it peak at 3.69% next December (which is well below 4.2% a month ago). As noted above, we acknowledge that risks to rates of interest remain up within the short term, with the foremost risk being an additional faster-than-expected acceleration in wage growth, with the chance of a “wage-price” spiral.
Mortgage Choice CEO Anthony Waldron said: “The Reserve Bank ended the yr with one other rate hike. Today’s decision marks the eighth rate of interest hike since May, a trend that has meant significant adjustments for variable-rate home loan borrowers.
Data from the Reserve Bank shows that numerous fixed-rate loans will expire next yr. About two-thirds of outstanding home loans are currently at a set rate, and two-thirds of those will expire by the top of 2023. These borrowers can expect home loan rates to extend by 3-4% when their fixed-term loans end and pass at a variable rate of interest.
“It is vital that borrowers coming down from fixed rates are prepared for the change. Our Mortgage Choice brokers actively check with borrowers who’ve set their rates of interest over the past few years to assist them prepare for the shock of moving to rates that could possibly be twice what they were paying. And it isn’t so simple as redefining the speed, as fixed-rate prices have skyrocketed over the past two years.