by Rels 
FINANCE
By Jen Melocco| Author
October 27, 2023
After four months of interest rate rises, more mortgage pain could be on its way again.
In the strongest sign yet that a rate hike is on its way, all four of the big banks are now tipping an official cash rate rise when the Reserve Bank meets for its November meeting on Melbourne Cup Day.
ANZ, CBA, NAB and Westpac this week all indicated that they expect the RBA will raise the cash rate to 4.35 per cent.
Their predictions come after two significant events this week.
Firstly, the Consumer Price Index (CPI), came out with higher than expected figures.
Data from the Australian Bureau of Statistics on Wednesday showed the CPI rose 1.2 per cent in the third quarter, up from a 0.8 per cent increase the previous quarter.
For September alone, the CPI rose 5.6 per cent year-on-year, up from 5.2 per cent in August.
The CPI, which measures the change in the prices of a group of goods and services, is the most well-known indicator of inflation.
Amongst the largest price rises for September was the category of housing costs, which rose 7.2 per cent in the 12 months to September.
Within that rent rises are continuing to spiral, rising 7.6 per cent in the 12 months to September.
Secondly comments made by RBA Governor Michele Bullock this week also attracted attention.
In her first public speech since becoming Governor she said that “The Board will not hesitate to raise the cash rate further if there is a material upward revision to the outlook for inflation”.
If rates were to rise in November homeowners need to prepare.
For the average borrower with a $500,000 debt at the start of the hikes, another 0.25 percentage point increase would see their monthly repayments rise by $76 according to modelling by comparison site Ratecity.
“Borrowers need to start getting their head around what a 13th rate hike would look like in their budget because, at this point, the data is starting to point in this direction,” RateCity.com.au research director, Sally Tindall, said
“Governor Bullock has re-confirmed the Board is prepared to hike the cash rate if required.
“A rate hike in November would mean an extra $76 a month towards the mortgage repayment,” she said.
“While not much in isolation, when you add this increase up across what would be 13 hikes, you’re talking about an extra $1,210 a month.
“A rate hike in November is by no means a done deal, but borrowers should start preparing nevertheless.”
That message has already been heeded by some borrowers.
A near-record $20.6 billion in loans were refinanced to a new lender in August according to ABS data.