HOMEOWNERS should brace themselves for a jump in the mortgage repayments of more $5,000 a year over the next 18 months, a mortgage broker has warned.
While economists expect the Reserve Bank of Australia (RBA) to leave the official cash bank unchanged at a 49-year low of 3 per cent at Tuesday’s monthly board meeting, the central bank has warned it will need to raise the rate to “a more normal” level at some stage.
Loan Market Group executive director John Kolenda says homeowners can expect variable mortgage rates to rise by around two per cent over the coming 18 months.
“Don’t get accustomed to such low rates and get prepared for eventual rate increases,” Mr Kolenda said
“Even Reserve Bank Governor Glenn Stevens has warned consumers to allow for a two per cent increase in the future which would see variable rates at around 7.8 per cent.