RBA Raises Interest Rates to 15-Year High

The Reserve Bank of Australia (RBA) has increased interest rates by 25 basis points to their highest level since 2011. The cash rate is now at 4.6 per cent, which will result in an average owner-occupier variable rate of 6.49 per cent.

Financial comparison site Canstar estimates that this increase will add $91 a month on a typical $600,000 mortgage. With potentially more rate rises to come, borrowers may face an extra $364 a month compared to the start of the year.

Economists are warning of a rising risk that Australia's economy could tip into recession in coming quarters due to higher interest rates and slower consumer spending. HSBC chief economist Paul Bloxham predicts falling house prices, weaker construction, and reduced consumer spending as contributing factors.