Eliza Bavin| 8 April 2022| Yahoo Finance
Economists from the Commonwealth Bank (CBA), ANZ, NAB and Westpac are all predicting rates will rise this year – and it could come sooner than you think.
All four big banks now believe the cash rate will start rising from June 7, with Westpac and NAB the last of the major banks to bring forward their forecasts.
Westpac updated its forecast on the back of the RBA’s monetary policy statement for April.
- The bank’s previous forecast had the rate hikes starting in August and reaching 1.75 per cent in February 2024.
NAB also updated its forecast, with the first cash rate hike starting in June (also previously August), while on Tuesday, ANZ’s economic team updated its cash rate forecast, bringing forward the predicted start date by three months to June.
All four big bank forecasts have the cash rate hikes finishing at different points.
CBA believes the neutral cash rate will be 1.25 per cent, whereas ANZ has said the cash rate will rise above 3 per cent, but not until after 2023.
How high will the cash rate go and when?
- CBA: hikes to start in June. Cash rate to reach 1.25 per cent by February 2023
- Westpac: hikes to start in June. Cash rate to reach 2 per cent by June 2023
- NAB: hikes to start in June. Cash rate to reach 2.25 per cent by August 2024
- ANZ: hikes to start in June. Cash rate to reach 2 per cent by November 2023 and peak above 3 per cent, but not until sometime after 2023
How will it affect mortgage repayments?
If the cash rate reaches 2 per cent by June 2023, as predicted by Westpac, the average owner-occupier with a $500,000 debt and 25 years remaining, could see their monthly repayments rise by $509, according to data from RateCity.