It’s happened again. This week when I logged on to my bank account – I spent last week in limbo from the daily newspapers, in hospital having a baby (a fact which explains why this blog was quiet!) – that all-too familiar message appeared. Yes, the interest rate on my mortgage account had been raised again, and I am going to have to pay more this month in my repayment.
Last Tuesday the Reserve Bank had its regular monthly meeting and decided to raise interest rates, again, by 25 basis points, putting the official cash rate up to 4.25 per cent. The reasons behind their decision, they say, lie in the general improvement in the global economy, as well as Australia’s trading looking ever more promising, and the continued increase in approvals for mortgages and other home lending despite the fact that during this time some of the incentive schemes like those for first home owners have been phased out. On top of that, inflation is under control and the Board of the Reserve Bank is now reasonably certain that stronger economic stimulus is no longer required to keep the Australian economy on track.
So now, like many of you, I’ll be paying more for my mortgage, and have to say I’m hoping they don’t keep doing this too regularly this year – especially with a new baby to pay for! Today the chief executive officer of Westpac Bank, Gail Kelly, made her prediction: she expects that the Reserve Bank will add another rise to the table “in the near term”, before letting rates pause for a while. One more rise doesn’t sound too bad, but a pause in rate rises sounds even better. Of course, we’ll have to wait until May to find out the next step in the story.