Home loan bills set to rise by $200 per month

Australians will see their mortgage repayments rise by an extra $200 per month by the end of this year or early 2012, it has been predicted.

According to a new report by Access Economics, which was obtained by the Herald Sun, variable mortgage rates will rise by one percentage point within about a year, thereby lifting the average standard variable rate to 8.8 per cent.

It was noted that this shift would see monthly repayments on a typical $300,000 home loan rise from $2,275 to $2,476.

Loan Market chief operating officer Dean Rushton has already urged borrowers to compare home loans and consider refinancing ahead of anticipated home loan interest rate rises this year.

Access Economics commented that while Australia's inflation rate is currently within the Reserve Bank's target band, making a rate hike highly unlikely next month, economic factors will change later in 2011.

"Don't get your hopes too high that the Reserve Bank has already done its dash on interest rates for this cycle – capacity is too tight, income is rising too fast, and underlying inflation is already close to bottom," its report said.

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