Rate Hikes Slap Borrowers with Hundreds in Extra Repayments

Rate hikes are taking a big bite out of borrowers' wallets, with interest rates expected to hit a 15-year high. A typical $600,000 mortgage holder will shoulder an extra $91 per month if the Reserve Bank raises the cash rate by 25 basis points.

Across at least four rate rises this year, that borrower will have to pay an additional $364 more than what they paid at the start of the year. The cumulative impact is significant, with some borrowers facing hundreds of dollars more in monthly repayments.

The cash rate has risen to 4.6 per cent, its highest level since October 2011, and will likely lift the average owner-occupier variable rate to 6.49 per cent. Home loan debt has skyrocketed from $1.05 trillion to $2.51 trillion over this period.

RBA governor Michele Bullock's hawkish comments have sparked debate about the impact of rate hikes on unemployment. Union groups and social service sector representatives are warning that increasing interest rates will create more joblessness, while Treasurer Jim Chalmers counters that low unemployment is not to blame for inflationary pressures.