RBA Hikes Interest Rate to 4.6% in Bid to Tame Inflation

The Reserve Bank of Australia has raised its official interest rate by 0.25 percentage points to 4.6%, marking the fourth increase since January.

This move aims to curb inflation, with the bank seeking to balance economic growth and price stability.

Mortgage holders with variable rates will feel the impact most quickly, as banks typically pass on the central bank's decision in full.

According to Canstar, a 0.25-percentage-point rate increase raises the monthly payment on a A$600,000 loan by about A$91, adding A$360 per month or approximately A$4,320 per year to repayments.

Borrowers with fixed rates won't feel changes until their fixed-rate term ends, but Canstar estimates that borrowing capacity could fall by more than A$47,000 for a person on an average full-time annual salary of A$108,650.