How much will the RBA interest rate hike cost you

The latest rate hike has set millions of Australian borrowers back to zero.

The Reserve Bank of Australia (RBA) has raised interest rates for the third time in a row, raising the cash interest rate target to 4.35 percent.

Nine Money editor Effie Zahos acknowledged the latest decision was a blow to households

“The RBA hopes that three rate hikes will bring inflation back to normal, but for households this is disastrous at the moment,” she said.

“You’re basically looking, depending on the mortgage size, about $100 more for the month.”

An owner-occupier with a $600,000 mortgage and 25 years left at the start of this year’s rate hikes will have to add $91 to their minimum monthly repayments with a 0.25 percent increase, according to estimates from financial comparison website Canstar.

The total increase over three consecutive increases would be $272 per month.

Australians with a mortgage of $500,000 over 25 years can expect to pay around $76 extra per month, while those who owe $700,000 will have to pay a further $107 per month.

Owners who still have €800,000 on their mortgage can pay an extra €122 every month.

Those with $900,000 will likely have to pay an additional $137 per month.

Those who owe $1 million could pay an extra $152 after today’s rate hike.

Canstar Data Insights director Sally Tindall said Australians who kept their mortgage repayments the same after the 2025 cash rate cuts would essentially erase the repayment cushion they had built up.

“While more than a year of higher repayments will not have been in vain, the strategy will have provided only a limited cushion against rising interest rates,” Tindall said.

Borrowers are also being asked to prepare and calculate how many repayments will be made if there are two more rate hikes in June and August.

Tindall recommends that borrowers contact their lender and request a rate review.

“Haggling should be the first port of call for borrowers, as picking up the phone can potentially provide almost immediate relief,” she said.

‘However, banks no longer hand out discounts as freely as they did a few years ago.

“If your bank won’t budge when you negotiate, don’t take it personally, take your business elsewhere.”

So far, haggling can only determine your rate. Those who want the best rates will likely have to refinance.

Borrowers should ask about hardship assistance if repayments become difficult and they have already negotiated with their lender.

Independent financial advice is available from the National Debt Helpline on 1800 007 007.

The information on this website is of a general nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on the information contained in this website, you should consider the suitability of the information taking into account your objectives, financial situation and needs.