With official interest rates likely to remain on hold when the Reserve Bank of Australia (RBA) meets on Tuesday, RBA governor Philip Lowe has continued to warn mortgage holders not to be complacent.
In 15 separate speeches and statements this year, the governor has sounded a warning bell that the next move in interest rates will be up, rather than down.
RateCity.com.au director of research Sally Tindall said while the hike to the cash rate was still a way off, now was the perfect time to ensure borrowers are prepared.
She said, “Even the RBA concedes there won’t be any change in the “near-term”, but the governor isn’t delivering these warnings for no reason.
“He wants people to start paying down their mortgages now, to reduce the impact future rate hikes will have on debt-laden households.
“It’s almost been eight years since the RBA last increased the cash rate. That means anyone who took out their mortgage after November 2010 might not fully appreciate the consequences a rising cash rate can have on the family budget.”
Experts are predicting the rate will remain at 1.5% as it has been since August 2016.
However one of Finder.com.au’s resident experts believes there is more and more reason to expect a cut for the next move.
Andrew Wilson from My Housing Market said, “Although recent data remains positive overall with lower jobless rate, declining budget deficit and a steadying dollar, concerns are increasing regarding rising trade barriers imposed particularly by US and China.
“Increased fuel costs will also be concerning the RBA with wages yet to rise as expected.
“Rates will remain on hold and the case for a near-term cut - although clearly an outside chance - is strengthening.”