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Hike Or Hold: Experts Split Over RBA Rate Decision Today

Nervous wait for mortgage holders as the Reserve Bank meets today for a potential 13th interest rate rise in just 15 months.

The cash rate was lifted to 4.1 per cent in June.

The majority of the big banks expect a further 0.25 per cent to be added to the cash rate.

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For borrowers who own a repayment of $500,000 over a 30-year term, and at a rate of six per cent, this increase will add an extra $81 a month.

Yesterday, AMP Bank released new data indicating that nearly 70% of mortgage holders expressed concerns about their ability to afford mortgage payments if interest rates increased further.

Half of the mortgage holders said they had already reached their limit in terms of cutting down on daily expenses.

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However, experts are split, with some predicting the RBA to keep the cash rate on hold. 

During the last rise, RBA governor Philip Lowe said that inflation in Australia had passed its peak, “but at seven per cent is still too high, and it will be some time before it is back in the target range.”

Based on the low unemployment figure, finance guru Mark Bouris has predicted another rate rise.

The current unemployment rate is 3.5 per cent, which went up by at least another percentage point.

Deputy governor Michelle Bullock said the unemployment rate was still too low, contributing to fuel inflation. However, the number would take “some time” to reach 4.6 per cent.

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