The RBA announced a 0.5 percentage point increase in the cash rate this week to bring it to a still low 0.85%.
The move is aimed at regaining control of inflation which economists expect will near 7% by the end of this year.
Inflation is set to rise as the energy crisis continues driving up power on the east coast of Australia and petrol prices continue to climb to beyond $2 a litre.
This week’s rise is the second consecutive increase which has lifted the cash rate from a record low of 0.1%.
Finder’s Graham Cooke says the rise will cost the average Aussie mortgagee about $1,900 a year.
“The average homeowner will see their monthly repayments rise by $159 – equivalent to $1,907 per year from this increase alone,” he says.
Mortgage Choice’s David Zammit says the RBA has sent a clear message it is on a path towards normalising monetary policy and further rate rises may be required.