The Reserve Bank of Australia (RBA) cautioned homeowners and mortgage holders on Tuesday to begin thinking about a potentially burdensome interest rate hike, as reported by The Daily Mail.
Insinuating that a rate hike is coming, central bank Philip Lowe emphasised that borrowers must prepare since “[they] have never experienced a rise in official interest rates.”
“If we continue on this current improving track, as we expect we will, it is likely that the next move in official interest rates will be up, not down,” he said.
The last increase in interest rate was eight years ago, and Lowe noted that borrowers may have a difficulty in adjusting their finances.
The RBA has kept the rate on hold at 1.5% since August 2016, and according to the Australian Financial Review, the bank is anticipated to increase interest rates in the second half of 2019 provided that inflation rates and the job market upkeep its positive performance
Additionally, Lowe pointed out that home prices are not expected to continue improving in the coming years.
“Most of our cities have seen falls in housing prices at some point over the past decade.
“While I would expect housing prices to trend higher over time as our incomes increase, there is no guarantee that your home will be worth more tomorrow than it is today.
“So plan accordingly.”
Collections: Mortgage News
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