RBA raises official cash rate

The Reserve Bank of Australia (RBA) has raised the official cash rate for the first time this year.

At its meeting today (March 2nd), the RBA decided to raise the rate by 25 basis points, up to four per cent from the previous level of 3.75 per cent.

Research company Canstar Cannex said that the official rate rise would add about $50 a month to a $300,000, 25-year home loan, News.com.au reported.

The news provider noted that the Commonwealth Bank was the first to raise its rate in response to the RBA move. The bank increased its standard variable home loan interest rate by 25 basis points to 6.86 per cent.

ANZ, meanwhile, also followed the RBA by hiking its interest rates by 25 basis ponts to 6.91 per cent.

The news makes now a good time to compare home loans as different lenders implement their own rate rises.

Last week, Lesley Parker, a finance writer for the Sydney Morning Herald, said that mortgage holders can save money by investing their spare cash in a home loan offset or redraw facility.

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