The best Aussie mortgage minds agree that consumer spending is where the first pain point will be felt after the central bank hoisted interest rates for the 7th straight month on Tuesday, but the key issue –  just how high will rates go – is where the brokers are breaking.

With the Reserve Bank of Australia lifting the cash rate by a further 25 basis points, driving the official cash rate (OCR) to a n ear decade high 2.85%, a survey of top local mortgage brokers has unpacked where and when the pain is likely to begin for Aussie homeowners.

The survey, by the punchy Aussie home loans comparison site Joust, puts the hard word on its bustling community of broker partners to share their frankest thoughts – not only on where interest rate changes will be most keenly felt – but also on how their ow businesses have been impacted, and finally OFC, how high they reckon the OCR could pop over the next 12 months.


Hip pocket pain

Off the back of surging national inflation which struck an unwelcome and unexpected 7.3% last week, (that’s the fastest rise and the highest level since 1990), every single one of Joust’s brokers agreed spending habits will change hard and fast “significantly” over the next months.

Three out of four agreed that mortgage repayments will continue to be significantly impacted.

On the flipside fewer brokers (just one in eight) believe the biggest changes will be seen in personal incomes and property investments, while 25% expect general property costs to ballon as big flow-on impacts get factored in from future rate rises.

Joust CEO Carl Hammerschmidt told Stockhead his team wanted to get a sense check straight away from the platform’s broker partners.

“This month we wanted to tap straight into their expectations for how the rising cash rate would impact the average consumer.

“Perhaps unsurprisingly given the manner in which Aussies are battling against rising living costs, spending habits for consumers was the only area that all our brokers agreed we’d continue to see big changes in the coming months.”


Aiming high

Joust’s survey also asked brokers to predict where the cash rate will be in a year’s time, with respondents split down the middle. Half of brokers predicted that the RBA will take the cash rate to 4% or higher, while one quarter believed it’s more likely to stop at 3.5%.

Brokers were also asked to describe the impact of recent rate changes on their businesses, with the general sentiment unsurprisingly being that customers are more nervous and that brokers have seen a reduced number of home buyer inquiries, in favour of an increase in borrowers looking to refinance.

Hammerschmidt says what’s interesting is there ‘s still a range of opinions on how high rates will go over the next year.

“We found there to be an even split of those who believe rates jump to at least 4% and those who think it won’t go above 3.5%.”

“I wholeheartedly agree with the key sentiment coming out of the survey, with most brokers encouraging borrowers to focus on wise spending and to borrow with a bigger buffer than what a bank servicing calculator may allow. ”


This article was developed in collaboration with Joust, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.