Reserve Bank of Australia governor Philip Lowe is unrepentant about the prospect of further interest-rate rises. In fact, he says there’s a risk the bank is not doing enough.
Articles on Mortgage rates
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The cost of borrowing for a home has fallen in recent months, despite repeated increases of the benchmark interest rate. An economist explains the seeming paradox.
While authorities such as the Reserve Bank often see them as risky, interest-only loans can be helpful in some circumstances.
Banks typically do not want their customers to default on property and have processes in place to help reduce the risk of this happening.
Never, in the three decades the Reserve Bank has been targeting inflation, has it been tested by prices rising in unison like this.
Because housing is sensitive to changes in borrowing costs, it can tell policymakers and consumers a lot about whether the Fed’s plan is working.
The extraordinary increase in house prices and debt means mortgage rates of 7% would be as painful to borrowers today as rates of 17% were decades ago.
If financial markets are to be believed, you’ll be paying $1,000 a month more on a $500,000 mortgage by the end of next year. But I don’t think interest rates will go that high – here’s why.
Governor Philip Lowe says it is “not unreasonable” to expect the cash rate to climb to 2.5%. That’s an extra $600 to service a $500,000 mortgage.
The Conversation’s expert panel predicts prices will rise faster than Australians’ pay can keep up in 2022 – and that’s not their only concern about the local economy.
The 55 leading economists surveyed by the Economic Society see few signs of Australia aping the US, where inflation has surged to its highest level in 30 years.
Jobs, economic growth, wages growth and even home price growth are likely to look less threatening by the time we are asked to vote.
Sub-2% mortgages are a thing of the past. The Reserve Bank’s governor has signalled variable rates will rise sooner than previously expected, but says he doesn’t expect it in 2022.
Inflation and wage rises used to shrink the repayment burden. We’re being granted mortgages as if they still will.
Yes, the bank would effectively pay you to borrow money. But negative interest rates won’t please savers, nor will they meet the big challenges of economic recovery.
Investing where you’ve last invested isn’t bright. new research finds that two thirds of property investors do.
Evidence for the prime minister’s contention that the banks are “profiteering” is thin on the ground.
It is thought that it doesn’t help much to cut official interest rates toward or beyond zero, and maybe it doesn’t, but new research suggests the answer has a lot to do with the housing market.
Top contributors
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Visiting Fellow, Crawford School of Public Policy, Australian National University
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Senior lecturer, Canberra School of Government, University of Canberra
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Lecturer in Economics, Monash University
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Head of Department of Economics, Finance & Accounting, Brunel University of London
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Professor of Economics, University of Leeds
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PhD Candidate, Sustainable Urbanisation, University of Lagos
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Professor, Finance, UTS Business School, University of Technology Sydney
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Program Director, Housing and Economic Security, Grattan Institute
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Senior Lecturer in Economics, The Open University
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Professor of Finance, University of Florida
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Professor of Economics, Crawford School of Public Policy, Australian National University
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Senior Lecturer, School of Accounting, Auditing and Taxation, UNSW
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Associate Professor in Finance, University of Sydney
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Associate Professor of Finance, Mississippi State University
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Emeritus Professor of Finance, The University of Melbourne