» RBA increases cash rate by 0.25%

THE Reserve Bank of Australia has increased the official cash rate up another 25 basis points and indicated they have now reached “average” for borrowers.  

The rise of  0.25 per cent means an increase to 4.5 per cent on the cash rate.  This will add about $46 a month to repayments on an average $300,000 home loan if it’s passed on in full by lenders.

This rate increase is the RBA’s sixth since last October.

The RBA says rates have now reached their average level but warns that inflation is likely to further increase by the end of the year.

The RBA will seek to deter inflation and try to take some of the heat out of the housing market, where Melbourne prices lead the nation.

It comes as an overwhelming majority of economists expected a rate rise, with money markets also putting the chances of a rate hike at 70 per cent.