Mortgage rates in Australia will increase to more than nine percent over the next years, according to a leading property expert.
Frank Gelber, chief economist at BIS Shrapnel, said that strong recovery of Australia from its economic downturn will trigger the home loan interest rates to rise.
“When inflationary pressure comes through and the Reserve Bank gets aggressive we are going to see housing rates above nine percent,” he said at a conference in Melbourne.
“And that means a cash rate of seven to 7.5 per cent.”
If implemented, such increase in interest rates could prompt homeowners to compare mortgage and refinance.
According to The Herald Sun, an increase of interest rates to nine percent would add A$298 per month to an average variable mortgage of A$285,000 and $517 a month to a mortgage loan worth $450,000.