Aussies urged to plan for imminent rate rises

Australians have been advised to 'put their houses in order' ahead of expected interest rate hikes by the Reserve Bank (RBA).

Anthony Keane of the Herald Sun noted that the RBA's surprise decision to keep the official cash rate on hold at 4.5 per cent last week could be treated as a chance to bolster household budgets before "big rate rises next year".

Indeed, he referred to forecasts by HSBC's chief economist for Australia and New Zealand, Daniel Pigott, who expects the RBA to implement rate rises totalling 1.25 percentage points by the end of next year.

As Mr Keane observed, such hikes, coupled with the likelihood of banks making their own above-cycle interest rate rises, would see huge sums added to the cost of average mortgages.

Phil Naylor, chief executive of the Mortgage and Finance Association of Australia, commented that the prospect of such impending mortgage pain means it is vital families ensure they have an adequate repayment plan in place.

"Families should take the time now to prepare for rising rates," he said.

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