RBA Rate Hike Will Tighten Noose Around Australian Borrowers

The Reserve Bank of Australia (RBA) is expected to raise interest rates for the fourth time this year, pushing borrowing costs to their highest level since 2011. This move will make Australia's cash rate the second-highest among advanced economies.

Homeowners now have approximately $2.5 trillion in debt, more than double the amount from 15 years ago. An increase of 25 basis points to 4.6% would add $91 per month to a typical $600,000 mortgage with 25 years remaining.

Canstar's data insights director Sally Tindall said that while the cash rate is returning to its 2011 level, borrowers are carrying significantly more debt than they were then.