US Interest Rate Hike Puts Pressure on Aussie Mortgage Holders

The US Federal Reserve has increased interest rates for the first time in three years, which could affect Australian mortgage holders. The cash rate has been lifted by 25 basis points to a range of 3.75-4.0 percent.

Australian AMP chief economist Shane Oliver warned that rising global interest rates would impact Australians who want to fix their mortgages. Higher bond yields mean Australians pay more for their mortgage if they want to lock in fixed rates.

Olivier said Australian interest rates could rise when the local Reserve Bank meets at the end of September, which would be the fourth increase this year. The RBA has already lifted the cash rate by a total of 75 basis points in its fight against inflation.