Monthly mortgage repayments in Australia could surge by as much as A$200, according to a forecast.
Economic consultancy firm Access Economics said this figure could be the result of a one percent increase in variable mortgage rates at the end of this year or early next year.
It said that interest rate increases set by the Reserve Bank of Australia (RBA) last year, including the 0.25 percent increase in November to the current 4.75 percent level, has slowed down underlying inflation.
“The good news will soon pass,” it said, adding that the “capacity is too tight, income is rising too fast and underlying inflation is already close to bottom.”
Earlier this month, Paul Bloxham, an economist at HSBC, forecasted that interest rates could increase as early as Q2 this year. However, when the cash level increased in November, the RBA responded by increasing its rates on mortgages and saving accounts.