In good news for mortgage holders, interest rates may have officially peaked, with almost all experts confident the Reserve Bank (RBA) will hold the cash rate steady when it meets next Tuesday..
An overwhelming majority (97 per cent) of economists who weighed in in this month’s Finder Cash Rate Survey believed the RBA would hold the cash rate at 4.10 per cent in September.
Two-thirds of experts (66 per cent) said the cash rate had hit its peak in the current rate-rise cycle.
Finder head of consumer research Graham Cooke said homeowners would likely be let off the hook for the third consecutive month.
“The cost-of-living crisis has put an end to the post-COVID spending splurge, giving the experts reason to believe that the RBA will hold off on increasing the cash rate,” Cooke said.
“This will be music to the ears of mortgage holders still reeling from the last 11 rises.”
However, Cooke said homeowners weren’t out of the woods just yet.
“Despite a growing sentiment that the cash rate has peaked, mortgage holders need to remain on guard,” he said.
“Escalation in Ukraine, continued slowdown in China or a change in inflation could see the RBA lifting in the coming months.”
University of Sydney associate professor of economics Mark Melatos has predicted a hold, but thinks we are likely to see a peak rate of 5.1 per cent.
“Inflation remains significantly above the RBA's target band. While it appears that the labour market might be starting to slacken, the RBA is still in catch-up mode with respect to matching their cash rate settings to the inflation reality,” Melatos said.