After months of speculation the Reserve Bank of Australia has lifted its official cash rate for the first time in more than a decade.
It has increased from a record low 0.1% to 0.35%. The increase follows the announcement last week that inflation increased to 5.1% in the year to June.
Property Investment Professionals of Australia chair Nicola McDougall says the minor increase in the cash rate is unlikely to impact the vast majority of borrowers.
“It’s important to understand that at 0.35%, the cash rate is still below what it was before the pandemic, and well below the 2.0% to 2.5% it was throughout the majority of the Sydney property boom that ended about five years ago,” McDougall says.
She says anyone borrowing to buy a property has been assessed at being able to make repayments 3% above current rates.
Mortgage Choice’s David Zammit says the question now is which lenders will be the first to pass on the rate rise.