Doing the sums as fourth rate hike adds hundreds to repayments

A quarter of a percentage point increase in Australia's cash rate has elevated the rate to 4.6%, marking the highest level in nearly 15 years. This decision, made by the Reserve Bank, has been met with concerns from advocates who warn it could exacerbate financial strain for households already facing difficulties. Natasha Luscri-Miller and her partner, who have experienced multiple relocations in the past five years, including a stint in a caravan, recently purchased a unit through the government's 5% deposit scheme.

They express relief at achieving stability through homeownership but lament the rising costs of their mortgage. With the RBA's latest rate hike, the couple faces an additional $114 monthly on their mortgage, bringing the total increase to $454 since February, when the RBA began raising rates. The RBA's governor, Michele Bullock, acknowledged the tough nature of the measure, stating that while it will impact people hard, the situation may improve as inflation decreases.

Financial Counselling Australia warns that this rate hike will deepen financial stress for vulnerable households. Interim CEO Jane Pires urges banks to provide genuine hardship support, noting that mortgage stress is currently the leading concern for those contacting the National Debt Helpline. Calls to the helpline surged by 11.76% in the June quarter, reaching 187,905 contacts, with a significant rise in the Small Business Debt Helpline as well.

Anglicare Sydney's Rob Stokes expresses concern that the rate rise will disproportionately affect low-income individuals, whose options for relief are limited. Experian Australia and New Zealand report that personal loan hardship increased to 2.14% in June, up from 2.00% a year earlier, while mortgage hardship decreased slightly.

Treasurer Jim Chalmers acknowledged the pressure faced by Australians and announced additional support measures in the upcoming budget to address long-term economic challenges.