Banks Predict Another Rate Hike Before Christmas

Australian homeowners are facing another potential mortgage hit after two major banks predicted the Reserve Bank of Australia will hike interest rates again before Christmas.

The Commonwealth Bank and ANZ have both forecast a 0.25 percentage point cash rate increase in November, lifting the official rate to 4.60 per cent.

This would push the cash rate to its highest level since October 2011 and add around $91 a month to repayments on a $600,000 mortgage with 25 years remaining, according to Canstar analysis.

The forecasts come after new inflation figures showed headline inflation slowed to 3.5 per cent in the year to July, down from 3.8 per cent in June, but still above the Reserve Bank's target of around 2-3 per cent.